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Week 149 - How do you set the budget and pay for your remodel?

6 years ago

As a finance person, it's been fascinating to me that people are dictated to about how much they should spend on their kitchen remodel and they go along willingly.

How did you set your budget? Based on what you can afford? Did you just pick a number? Did you check out displays and made a list of wants that dictated the cost?

How did you decide to pay for the remodel? Here in my area, people maxed out their equity via loans and spent it on remodels. I've yelled at many clients for doing so when it's unnecessary.

My remodel was forced so I had no preparation or research.

When my flood occurred, the insurance company gave me a payout of $14k for my entire kitchen. Being clueless, I decided to bump it to $25k with savings so we can get some new appliances that my brother wanted. We went out, looked at displays, I made a list of wants and whittled it down to the budget with a 15% reserve.

I started getting a couple of quotes with KDs. I was informed that based on my house, I should be spending $250-500k. It didn't matter that $25k was my budget. No one was willing to discuss why that dollar amount or what my options are other than shell out the money.

After the rude awakening, I headed back to the insurance company and they told me the payout was absolutely in line with what it takes to put my kitchen back based on nationwide and regional costs. The only extra was the countertop they forgot to allot for.

We had 8 floods within 3 months on our street and everyone was negative in their cost vs. payout. Why did the insurance companies have such a discrepancy even allowing for volume discount by using their contractors.

This blew my mind as I had planned to be out of pocket for an extra $11k and it still wasn't enough. I started doing research and found that for residential remodeling, it's a Wild West. Costs and budgets were made up numbers based on looks, perception, flattery, and thin air.

For example, repiping cost for 4 different houses with identical SF on the same street in a three months period ranged from $7k (neighbor who shopped until the lowest bid), $14k (mine referred by neighbor), $25k (long time plumber of owner) and $30k (referred by realtor neighbor).

I spent the $25k then set a hard budget based on value for everything else. I was now out of budget and paying slowly as I go along. My constant question is "what is a fair price?". If one category cost more, it reduces something else. I made umpteenth compromises along the way to stay within budget. I paid out of savings with the understanding that every penny spent means less earnings and no future investments.

Let's be frank, my kitchen remodel is not an investment. It won't earn dividends or grow in value. In fact, it will be devalued by next year if it doesn't meet trends. People may like the kitchen but they will never pay over the fair market value for what my remodel cost. That FMV is based on market, location and scarcity. A simple paint and door update at a fraction of the cost would accomplish the same exact thing as my remodel.

Comments (42)

  • aprilneverends
    6 years ago

    We bought a smaller house (older neighborhood, walkable distance to amenities, no HOA) with an intention to add to it.

    So we bought it approximately 130 K under what we could afford while not selling our other place.

    And much cheaper than what we could afford were we to sell our other place first.

    So best laid plans lol

    But since we found disturbed asbestos..addition turned to be addition plus gut remodel plus obviously kitchen.

    So no, it appears the plans could be better:)

    the money for remodel came all from selling different properties overseas. My DH's ones(and his mother's- who was the reason for our move in the first place)

    (I also sold my place overseas, and my part(I owned a half of it) went to cover the 20% downpayment for the new house. Got many phone calls from the bank-am I about to come into some future happy amounts of money? Had to dissappoint them lol)

    So no, we didn't do any loans for the remodel. When things became really tight my DH had to borrow some from his savings. But it took a year and a half until we got to that sad part.

    We had a cost plus type of contract so we had a lot of control actually..for better for worse:) All the finishes were on us. Excluding a few that GC made a part of addition payment, like a topping on a cake-a vanity(only the woodwork), windows, and shower door.

    We paid our GC upon completion of stages. We did find lots of stuff we'd no idea we'd find, before we opened the walls

    We did add several things as we went.

    We didn't look at it all as an investment even though in our case yes, it will make a difference, even plainly adding square footage (I must say that the most impressive thing is probably our addition-they made it so seamless people who know our remodel story still can't find it afterwards lol)

    We just wanted the house to work well for us, and to enhance its character..since the inside didn't match the outside that much..:) It had some very nice elements, but the previous owners were very much into landscaping, exterior, etc, and not so much into what's inside and whether it works with the house at all.

    The GC agreed to outsourse quite a few things if we were able to get a better bid on them than his subs. Things he felt OK sharing so to say..insulation, HVAC, stuff like that

    Kitchen, he was quite adamant we use his cabinetmaker. We could object anyway but I talked my DH into going with his guy because I could predict logistical nightmare otherwise. We were able to get this custom(rather small) kitchen for less because of the friendly long relationship between the GC and the cabinetmaker

    The cabinetmaker and his installer turned out to be very impressive professionals by the way, so in the end it was a good decision.

    So, back to initial question-what we planned and what happened turned to be two different things. With, like, an abyss between the two.

    We did pay mostly how we planned to pay in the first place

    (half a condo, two apartments and the

    beachem thanked aprilneverends
  • Newarre
    6 years ago

    We bought around 60K under our Max budget knowing we'd want to remodel. This is likely our forever home. We priced everything we wanted out, we're generally reasonable people that want good quality but don't need top of the line. We added it all up (doing a decent amount ourselves, demo, cabinet install, etc) our kitchen and first floor floors will end up being ~38k plus whatever comes up. We still want to gut two of the three bathrooms but none are in terrible shape so we'll probably wait a bit to do them.

    My father has a construction company that does mostly kitchen and bath updates. I worked with him most summers from about age 10 to when I got out of college so I knew about what things would cost going in. I also had gutted an old home that's now a rental of ours a few years ago. I was only about 2K off what my ballpark was when we first saw the home.

    Bottom line. Price out your options before even setting a budgets so you have an idea of what's reasonable and what you should cut back on vs splurge on.

    beachem thanked Newarre
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    Everyone has given really good suggestions and the best one I think you should look at is walking through your kitchen and deciding 2 things: 1) What do I need to change and 2) What would I like to change. Take a full week and write down your routine. Decide what irritates you. What would you like to have. What do you need to have. Do this before you start pulling Houzz pictures or get inspiration. This process will help you with locking in the basics before it gets corrupted by the pretty pictures. I was forced into remodeling from full gut because of a kitchen leak/flood. I had no money and no budget planned for it. From my experience, so far, you can do a remodeling with much lower than what people/KD tells you if you use creativity and are willing to compromise and stick to a budget religiously. Knowing that insurance will not pay enough to repair my house, I set aside $25K in savings for the extraneous and some upgrades. This is a hard budget with no wiggle room. This amount was also meant to cover shortfall in the insurance, my deductible of $5K and any contingencies. That contingency is critical and ate up most of my entire budget. So far, I've had to repipe my entire house. It costs my neighbors $25K for their repiping. Mine will be $10K because I did a lot of research, interviewed neighbors out of the neighborhood, got recommendations and then got quotes. I only asked for 2 quotes but from the top specialists. My contractor is the company that most of the GCs in the areas use but I don't have to pay the upcharge and the GC percentage that other people paid. I had compromises such as getting a BS rangetop instead of full range. So far, I've been able to squeak out most of my wants list by a lot of research and negotiations. Even without planning time, I'm still able to buy the replacement appliances at up to 50% off retail while getting brand new items. I would recommend a spreadsheet and construction chart to plan your remodel. It helped me to account for every single item that needed to be done and plugged in costs. Every time something extra came up, I plugged it in and then cut from other areas so that my bottom line does not change. The forced budgeting actually made my remodel plan much better than if I had had unlimited funds. I also saved money by acting as my own GC for the cabinets, flooring and big jobs and using a GC only for the electrical and plumbing. In fact, two KDs that I interviewed was trying to sell me on using their cabinet source and had bad mouthed my chosen custom cabinet maker. They finally admitted using that cabinet maker for their own house and luxury clients. Since I was considered a budget or middle of the road client, they were trying to sell a standard line. Their quote was 75% more than my direct quote and had inferior products. The one thing that you don't want to compromise on is quality. Use fully licensed, experienced people and make sure that you are fully permitted and in code. This may mean that you have to wait to get things done. I had to wait almost 2 months for my repipe because the contractor was that busy.
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  • DIY2Much2Do
    6 years ago

    Interesting question. Unlike you, I had time on my side. I’d been planning what a remodel might look like for a decade in my head, followed by a year or so of actually planning and design. And by nature, I over-research everything. So by the time we started, I had a pretty good idea of what things would cost. The internet has helped immensely for determining the pricing of many, but not all aspects of remodeling.

    And our project was mostly DIY, so labor, that huge variable, did not factor in as much as it would for many. I did hire a plumber, and I think I got five or six estimates, which varied by about 400%, even though the scope of work was very specifically defined.

    Design choices and materials (and thus budget) were decided by several factors… what would be appropriate for the house and neighborhood, not “over-improving”, and also just getting what we wanted. We’re probably only going to remodel once, and are generally frugal in most other aspects. So some splurges were made. The biggest upcharge from my original estimates was flooring. We decided to do 3/4” hardwood on the entire floor of the house, plus two staircases, and it wasn’t cheap.

    We paid cash as we went. We’ve lived here over 20 years with basic builder-grade everything, so it was time.

    Like beachem said, it’s not an investment. I don’t expect to get all of what we paid back. I do think the house would sell fast when the time comes.

    beachem thanked DIY2Much2Do
  • PRO
    6 years ago

    I decided a couple of years ago that I wanted to redo the kitchen in the house we had then owned 31 years. I talked about this with a few friends and they assured me that the MINIMUM I would have to pay for a new kitchen was $50,000-60,000. Well THAT wasn't happening! I decided to get a few bids and that proved to be a challenge.

    First was an Amish company. Met with them, showed them pictures on my iPad, had dimensions etc. They were to contact me with a "ballpark" figure. I never heard from them again and they never returned my calls.

    Second, was with a local custom cabinet company who does a lot of work in my neighborhood. I told the person with whom I spoke that my budget was between $25,000-30,000. An app't was made for the owner to come take a look - no show. Made a 2nd app't - he called and cancelled but said he'd call me the first of the next week to reschedule. Never heard from him again.

    So, I pretty much gave up. This is far too nice a neighborhood and my house is too nice to put in a junky kitchen when I already had one that was quite attractive and worked pretty well. The nearest IKEA is 2 hrs away and new to the area so I was concerned about installers. I came to the conclusion that I couldn't afford a new kitchen.

    Then a few months later, while in a small gourmet deli, I decided to go across the street to a kitchen/bath shop. It had a reputation for being very pricey. I went in and spoke with a very nice man (later learned he was the owner), and he showed me three frames on the wall. Each had itemized costs for three different grades of kitchen. Brilliant! I could see what a Ford Focus cost vs a Range Rover! We talked further and I made an app't for the following week.

    I went with measurements and my iPad again. We sat and talked about what was possible and he did an estimate as we talked. It came in below budget so I had him come out and do specific measurements. After many conversations and many changes, it was time to either stop the entire process or pay him $1000 for drawings and a firm bid on the kitchen. I bit the bullet and did so. The drawing were mine if I didn't go ahead - $1000 would be applied to kitchen if I did.

    We did go ahead (made multiple changes but nothing huge) and I signed a contract and we did the kitchen. With demotion of existing soffit, new ceiling, all the painting and some minor electrical, I stayed on budget. It ended up just about $28,000. BUT...and this is a HUGE "BUT", I reused all my existing appliances except for a new garbage disposal, I already had put in hardwood floor 10 years earlier, at that same time we put pot lights in the ceiling (added one more) and undercounter lighting. We also at that time put an integrated Corian sink into the existing Corian countertops. I reused both, plus the expensive faucet.

    Clearly, I would not have possibly been able to do this on my budget if I'd had to do new lighting, new countertops, new sink and faucet, new flooring and new appliances. Add a minimum of $20,000 to that figure. I have good appliances but no SubZero - just a counter depth KA and a KA dishwasher. My stove is a vintage 1948 O'Keefe and Merritt.

    I'm amazed that your insurance company was a cheap as you have found them to be. What all was damaged? Did you lose ALL your appliances? What grade were they? Did you have replacement value or did they depreciate the value?

    $20,000-25,000 doesn't get one much of a kitchen unless quality and size are unimportant. My kitchen is 11x15 and NOT "open concept" which means I have countertops on 4 walls, and cabinets on 3. I have a LOT of cabinets and a lot of countertop space!

    On your budget, I'd look at Ikea. Financing? I refinanced my house (15 yr fixed rate) and took out cash. Interest rate was lower than before so I kept my monthly payment pretty close to the same as before. No way I could have afforded this any other way.

    beachem thanked Anglophilia
  • caligirl5
    6 years ago

    When I first started thinking of remodeling, I though $20K seemed like a generous budget. After getting quotes and wow sticker shock! I realized that fixing the poor layout in my 1915 home, with a permit, I was looking at $50K at the bare minimum. Homes have rapidly appreciated in my area, updated or not, and it was clear that I wouldn't get the money out at resell so I decided not to move forward.

    Fast forward a year, I was getting fed up with the condition of the house, and it was clear that some level of remodel would be needed for maintenance. Also planning to stay here indefinitely. New budget for full gut, re-pipe, re-wire kitchen plus bath remodel: $125K, yikes!

    Back to the question: ultimately I decided the scope of work then budgeted from there--go big or go home! My finish selections are value-oriented but not the lowest cost. With labor and raw materials being 75% of the budget, it's not worth it to go too cheap on materials when I'm paying so much to install them.

    I'm aware that this isn't a positive financial move--it's an expenditure not investment, and I don't expect to make most of it back from resell. However I had the money (though decided refi was more advantageous than selling investments), debt-free except mortgage, emergency fund, and fully fund my retirement accounts.

    beachem thanked caligirl5
  • cyc2001
    6 years ago

    I'm glad you posted this question, as I'm going back and forth on this now. Should I spend the small fortune I've been quoted to redo my not-huge kitchen, or do a minor update (paint boxes and get new doors) and call it a day. I'm conflicted about spending money on the house that could be saved for college or retirement. The kitchen has nice quality, custom oak cabinets that are 30 years old, but I dream of a white kitchen with a different layout. So it's a want vs a need. We refinanced into a 15 year mortgage last year and pulled out some money... but it is way too little apparently, based on the quotes we've gotten from contractors.

    beachem thanked cyc2001
  • sherri1058
    6 years ago

    Having done a couple of renovations over the last decade, I had a pretty good idea what it would cost me for a new kitchen. I learned the value of a dollar at a very early age, have always been a saver and lived well within my means, which meant that I could afford to pay cash for whatever I wanted for a new kitchen. We have no intention of selling, but even if we did, In terms of resale, I'll never recoup.... in our neighbourhood people are buying for the location, not the house.

    beachem thanked sherri1058
  • jhmarie
    6 years ago

    I did a refresh rather than a remodel. We had thought of moving after our youngest graduated from high school, but my husbands salary has been going down rather than up. We had made many improvements over the years which still worked well - site finished wood floors, and subway tile bathrooms.

    I decided to refresh rather than move - and came up with a list of small and larger projects. I budgeted to put away $300 a month since the other children had finished college and we could reduce the amount we put in the college fund.

    Many projects were not that expensive - painted nearly every room, and while refinishing the stairway and kitchen cabinets was a lot of work, they were not expensive projects. The kitchen was done over a few years - new hood, counters, backsplash and sink. ($7000)

    I am pretty happy with how things have turned out. I prefer an "old house" style and cottage style, so I don't feel that pulled by trends. That doesn't mean I don't appreciate a new kitchen surface that's pretty. I put in a farm sink and quartz counters - the only new things I saw at Parade Homes that made me say, "Oh, pretty!"

    I'm old enough to have seen several trends come and go. I would rather be financially secure than have a new kitchen, but that is also because I have a nice working kitchen. Some people have kitchens with broken doors, a horrible layout and / or worn out appliances. They need to manage a good solid working kitchen without getting carried away by trends and keeping in mind the value of their home and neighborhood.

    We are a strange society - worried about the environment and materialism, but many buying every new hot decor item (seen enough big clocks?) and then deeming them dated in a few years and throwing them out - or donating. Perhaps people of less means want last years hot trend? - probably not.

    My master bath needs a small amount of work. The countertop is worn and the faucet is leaking and I've repaired it already a few times. I got to thinking the whole space could use changes - a nicer shower, a claw foot tub, but that is out of the question. I find the antidote when I start thinking that way is gratitude. I have a pretty master bath with warm water and all just a few yards from my bed - why am I complaining.

    beachem thanked jhmarie
  • FeatherBee
    6 years ago
    last modified: 6 years ago

    I told myself I couldn't remodel my kitchen until my savings exceeded 1 year worth of expenses and I paid down 50k on the mortgage. I'm sticking to the first part/savings, but I may not wait until 50k comes off the balance... .

    I wouldn't even consider borrowing against the equity in my home. I want a paid off home, not a maxed out home with new kitchen.

    beachem thanked FeatherBee
  • nosoccermom
    6 years ago
    last modified: 6 years ago

    Very interesting question.

    Unfortunately, "Costs and budgets were made up numbers based on looks, perception, flattery, and thin air" seems to apply where I live, too. Or more accurately, based on my zip code, house price, and, related, presumed income. There is this assumption that people spend as much as they can afford rather than that they set a budget of what they are willing to spend for what they want. Plus, the assumption that they are suckers????

    Just this morning, I had a short encounter with a contractor (non-kitchen related). I asked for a slight modification, was told 800.00, "because the job would take half a day", I balked at the price, then was told, "400.00", DH agreed but I still hesitated, so this was followed by "250.00".

    This is a highly recommended contractor, not a fly-by-night outfit. Needless to say, I would not hire him because he's obviously not trustworthy, pulling numbers out of his hat. Oh, and the "job" took all of about 1 hour.

    beachem thanked nosoccermom
  • Chessie
    6 years ago
    last modified: 6 years ago

    My 'remodel" is really nothing more than an update. Painted all cabinets, trim and doors , stripped wallpaper, painted walls. New dishwasher and range are in. The real $$ will be spent on counters and the floors. So everything so far has simply been my own work or writing a check. Now that I have a better idea of the cost of the next 2 items, I am taking out a HELOC for it. I have the cash, but I don't want to spend it on this stuff. :-) My costs are tiny compared to some of you folks!!

    beachem thanked Chessie
  • aprilneverends
    6 years ago

    (I'm calculating in my head, and arriving to the conclusion that out of 40 plus years of my life, minimum thirty of them I spent living very very frugally..)) not because it's my character I must say. circumstancial frugality..)

    as for the bids..some were more some were less but I can't say there was some huge discrepancy..except that one guy totally sounded like a hack..other GC s actually gave a pretty good impression. they had different modes of work, and some wouldn't even put a quote together without us paying first, and some wanted 7K for the blueprints first, before anything else..but otherwise the ballpark figures made general sense

    what was especially similar in these numbers-they were all NOT what our then-realtor told us they'd probably be..:)

    so lesson number one that I took from all this story, bring a builder if you want to estimate things. your realtor doesn't know. she might think she knows. don't rely on what she/he might think. it's pretty obvious, right? but was still a lesson for us to learn

  • Erin
    6 years ago

    I had a hard limit of $25k for my kitchen remodel budget because that is what I had in the bank earmarked for home improvements. In determining the budget for our kitchen remodel I looked into the prices of some of the major components (appliances, cabinets, countertops) and determined the scope of our remodel. Because cabinets are so expensive, I initially planned to reuse our existing cabinets, just move them around and paint them. My initial budget was $8k. Then I decided that I had more money than time and it would be much easier and faster to just buy all new cabinets, so my budget doubled.

    Here is the rough breakdown of my costs for my 11'x17' kitchen:

    Cabinets (Schrock from Menards): $7,000

    Countertops (40sf quartz with install): $2,500

    New induction range and microwave: $1,750

    Lighting and electrical: $ 600

    Plumbing, faucet and garbage disposal: $ 400

    Framing, drywall, and insulation: $ 250

    Tile: $ 200

    Total: $12,700

    With the exception of the countertops, we did all labor ourselves. So, our kitchen remodel should end up costing about 7% of our home value.

    I don't know how long we'll be in our house, it could be one more year or 50 more years. I doubt we will see any increase in the market value of our house as a result of our remodeling, but it is likely that it might sell a little faster if we were to move. In the meanwhile it should help make me happier when I'm home.

    beachem thanked Erin
  • MaWizz
    6 years ago
    last modified: 6 years ago

    I think i just picked a number I thought it would cost and felt comfortable spending. after several sticker shock moments of getting estimates I realized I had watched way too much HGTV lol. After reality set in we decided on the middle range kitchen cost group because they came highly recommended, work is great and can be seen in several local homes, they are local, they had what we wanted, they spelled everything out in the contract, they are a one stop shop (huge!), they seemed the most in to making the end result what we wanted and most reasonable even though just above the number we picked :) so no i did not go along willingly in fact with some of the the high estimates we received I left kicking and screaming and felt even more determined to not go along willingly because I felt like they were a rip off. More power to 'em if someone wants to pay that tho.

    We are paying cash for our reno. We are of the mindset of if you can't afford it you shouldn't get it. loans scare me. We watched several people struggle through the economic downturn years ago having to short sale and foreclose on their McMansions in our neighborhood. I couldn't figure out why until my dh said "they bought what the bank said they could afford not what they could really afford".

    Beachem that sounds like a terrible payout! Aren't you in Cali too? That seems low for that area? I don't know what the insurance terms were but I ask same as Anglo was this amount based on what value (current market, depreciation)? if anyone can make that money go far seems like as resourceful as you are you can! I'm like you always wanting to know the fair price. Sometimes it seems by doing our own research it's what the individual thinks is fair and can vary greatly between people.

    We are still working on our reno and I think we are at 30% more than that number I originally picked mainly due a few bigger items such as repairing a small roof leak discovered, scope creep, and an unrealistic estimate for quartz on KD part. All which I am fine to pay for and all still affordable. It needed to be done and at the same time it is an investment. Looks like we would get 2 1/2 times what we put in if not more on the investment now which we are thrilled about!

    beachem thanked MaWizz
  • Sue 430
    6 years ago
    last modified: 6 years ago

    I had an idea from reading and talking to people approximately what it would cost. Then I added 20K to the amount and told my husband it was going to cost about 70k. This was so he wouldn't have sticker shock. We know that we ALWAYS tend to go way over when we're selecting things, so I told the contractor to do the estimate with the most expensive for everything. (all possible accessories for cupboards, most expensive quartz, etc) In the end, we were only about 8k over the budget that the contractor gave us, which I thought was pretty good for us on a big project. That was mostly due to the bay window and the Glass backsplash, and the fact that we added some extra things while they were at it like new pocket door, new door between kitchen and basement and new screen door on back porch. Sadly, now that they're done, I have to start working to pay it off :-) We put it on our home equity line.

    beachem thanked Sue 430
  • Kate
    6 years ago
    last modified: 6 years ago

    We have lived in our house for 13 years, and don't plan on leaving until we're too old to take care of it (so, 30 more years or so??). We have 6 children, ages 1 to 18. Until last fall, we've only done relatively minor work to our home over the years. Now, we've finally decided that it's time to really make it how we want it, and make it work better for our family.

    We do not have a budget for our kitchen remodel yet. I have a general idea of what things will cost. I've been researching, but we haven't really been able to go and decide what we want yet. (Apparently, our taste in cabinets/countertops is quite different.)

    Last fall we refinanced our mortgage back to a 10-year (we had about 4 yrs left on our old one), with 50k cash out. With that, we have converted a covered deck to a 4 seasons room, built a new deck, and built a 2+ detached garage. The garage was the most recent. For that, we had to make the decision of whether to have my husband build it all, or hire someone else build it. The cost difference was about $7k. We decided to have someone build it, so that we can hopefully move on to our kitchen project soon. We are happy with that decision.

    Our upcoming kitchen project will include building a mudroom into our attached garage, removing soffits, taking down some walls (not load bearing), opening up the stairwell wall to our basement, lighting, all new cabinets and countertops, as well as flooring throughout most of the main living areas. My husband will do most of the work, including electrical - no plumbing changes. I would love to keep it under 30k, with cabinets being the majority of that, but it will all depend on our choices. We will pay for all we have left with cash and selling some investments. We've been savers our whole marriage. We have six kids, private school and one income. Even with these expenses, we still have plenty of investments to draw on when needed, college funds well taken care of, and retirement funds on track.

    beachem thanked Kate
  • mintcar123
    6 years ago

    I priced out all the appliances and materials needed for the job and we started saving for all of it. I also looked up what standard cabinet sizes are (so we wouldn't have to pay extra for custom) and then I drew up a new layout for our kitchen. My husband is pretty handy so him and I demoed the kitchen over the course of a month, leaving the sink and dishwasher connected as long as possible. My husband rebuilt the kitchen and we had the cabinets installed. Two and a half months later, our kitchen is almost finished. We're just waiting for our quartz countertops to be installed and then he will work on installing the backsplash.

    beachem thanked mintcar123
  • Caroline Hamilton
    6 years ago

    Our kitchen ended up costing in the low six figures. It's a fairly large kitchen, custom home and the neighborhood warrants it. We paid for it in cash.

    beachem thanked Caroline Hamilton
  • Chessie
    6 years ago

    Holy crap. Must be nice.

  • jml248
    6 years ago
    last modified: 6 years ago

    I'm slightly aghast as I total the amount we've spend on our DIY remodel. We didn't really budget per say, although we had a rough idea of what it would cost (30k). We've been paying cash as we go and from our home improvement savings fund.

    Our house has been a total gut job so half of our expenses have actually been on fixing/building/improving structure and I guess the budget technically expanded to include our mudroom as well since we are doing both at the time time.

    Our kitchen was pretty bad, it involved rebuilding the entire sub floor along with floor joists and foundation repair. Apparently there was a couple of 20 year leaks which rotted out good portions of main structural beams.

    I'd say it was about. 60:40 split for finishes vs building materials in our budget, and we are right around 35k. I think we could have probably done better wiTh cabinet pricing in retrospect but we went with a designer we trusted which was worth every penny.

    Basically cabs 13k, super scratch and dent appliances 6k, soapstone counters 3.5k and rest building materials.

    Side note: We went way over what would be recommended vAlue for our house but the kitchen is my thing and my husband likes to eat sooooooo, yeah. : )

    Also my thoughts are since we are DIYing everything that justifies the upgrades in final finish choices since we are not contending with labor costs.

  • Julie B
    6 years ago

    We looked at our finances, our needs in a remodel, and the neighborhood in setting a budget. We have about $600k in equity in a $1.1m home. We decided to max our renovation budget at $400k (for a two story addition, new kitchen, new master suite, partially finished basement, landscaping). We will be in the top third of the value of our neighborhood when we are complete. The kitchen was the most important room for us, and we looked at average costs of a kitchen remodel, the recommended percentage of a remodel to spend on a kitchen, and came up with a budget of $60k for the kitchen. This is higher than we originally intended because we decided to get high end appliances. It's also lower than the "average" for a kitchen in our area and home value. I don't really care what people say we are supposed to spend, but we wanted to get a general idea of where we would get the most value if we ever sold the house (which we don't intend to do; this is our forever home).

  • beachem
    Original Author
    6 years ago

    @Mawizz I am in Southern CA. The payout was without countertop and door fronts. The insurance company planned to reuse my door fronts.

    The problem is that matching is tough. One neighbor use the insurance contractors but they had only damage at the island. Even so, it took them 6 tries to match the cabinets.

    What the adjuster told me is that you have to negotiate for your labor costs. We pay out for a fair price on labor and anything else over is on you if you don't use our contractors.

    Since Yelp reviews on their contractors were one star with comments like "if I could give negative stars, I would", I chose to use my own contractors.

    @Kate my hat is off to you. Yowser, 6 kids and private school. Amazing.

    @caligirl my previous full kitchen remodel was $10K so I thought $25K was a generous sum. I'm in your boat. The old house was in the next city about 2-3 miles away so I didn't have as much of a contractor inflation.

  • salex
    6 years ago

    Confession time: My name is Salex, and I haven't set a budget. (Hangs head.)

    However, I am an OCD expense-tracker. We have estimated all the expenses, based on previous remodeling experiences, and then waited until we had the time, energy, and - most importantly - cash to pay for our choices. We started talking about the kitchen remodel before we bought the house 8 years ago. We started seriously planning the layout 2 years ago. We start demo next week.

    So rather than set a budget and then make choices to stay within that budget, we made choices and continue to monitor the total cost, paying cash as we go. This has worked for us in the past, only because (a) we are both frugal with *most* things (and choosy about where we splurge), (b) I plan obsessively, and (c) we save a high proportion of our incomes.

  • 2ManyDiversions
    6 years ago

    I’m semi-retiring from finance and investments, though I will never stop. Family background ranges from finance/investments and economists to artists in multiple disciplines/media … such a contrast! I tend toward both extremes, which makes many choices difficult – I strive to be (often ridiculously) frugal, which is often in contrast to wanting beauty and ‘the finer things’, as well as creating it ourselves through artistic pursuits and DIY. At the same time, it also makes for a wonderful life of pursuing ‘wants’ in adventurous and unique ways to have what we often cannot, or should not afford… and it has also taught us discipline.

    How did you set your budget? I keep track of all savings and expenditures on spreadsheets, and I mean ALL. For our renovation budget, I looked at our retirement savings thus accumulated; calculated average annual savings toward retirement over past years and how much we might continue to save minus several negative variables. I spent quite a bit of time running numbers and attempting to make educated guesses on the future of the national and world economy, minus at least 2 personal catastrophic events; how much we might require based on our current lifestyle and monthly/yearly expenses, adding inflation and cost of living into age 90’s+. There are always variables that are unforeseen. Frankly, I will never think we have enough saved… no one should no matter their bracket.

    The dollar figure we had to spare from those calculations were used in comparison to:

    Calculations of reno costs using HomeWyse as a rough calculation for the list of things we wanted to do with the entire house, priced everything I could find locally and online and added % of inflation to those items we won’t get done in a year’s time. Calculated % of each room (to see if it was in line); adding to areas more important to us, cutting back on areas less important. Compared upkeep/repair costs, longevity and replacement costs.

    And that’s how we came upon our budget. Money we can afford to spend now which won’t affect our future, and altering renovation plans to fit that budget.

    We are spending above what we could recoup selling our home as we intend to retire here rather than move (which I also investigated thoroughly). I agree with the comment that fresh paint and a few inexpensive upgrades can sell a home just as easily and quickly – been there, done that, and did so in the down market.

    I hope we are smart about our reno and will make long-life purchases, taking into consideration life-span, replacement costs, upkeep costs. If I find we are overspending in real life above our budget, we will cut back to meet our budget.

    The cautionary tale: Bought my first home in my teens, made improvements yearly and built equity. Started saving at age 19. Experienced a catastrophic health event a decade later, wiping out all savings and preventing future savings for several years. It can happen to anyone at any time.

    I know the difference between a ‘want’ and a ‘need’. I know what a ‘justification’ is. I don’t think I am ‘owed’ anything or ‘deserve’ anything. A dear friend and her DH have spent their lives justifying expenditures. They never talk finances with one another. They now owe money in high-interest accounts, have no savings, have let their home go into disrepair, and even minus a catastrophic financial event, their future is dire. Both have depression/anxiety over their financial situation… and they continue to spend… I suppose the attitude of ‘we are already in trouble, what difference does it make’ is their mantra. It makes a difference.

    My pulpit speech: Anyone can lose a job, have an accident, become devastatingly ill, lose their savings due to unforeseen events. Expensive repairs happen all the time.

    Granite/quartz won’t keep you warm if you can’t pay your electric bills. A (insert high-end) dishwasher doesn’t care if there was enough food on the dirty plates it cleans. A (insert high-end) fridge won’t keep fresh produce fresher and longer if there is none in it. The perfect flooring doesn’t concern itself if you are in bed, sick, when you should be in the hospital but can’t afford proper healthcare. And no amount of home improvement will matter if your home is foreclosed. Take proper care of what you have now, you may have to sell it. Don’t spend above your means. Save for the future. Save for your future. Save.

    Any kitchen and home is livable ‘as is’. Ok, I’ll get off my pulpit now : )

  • Cheryl Hewitt
    6 years ago

    Budget: my partner had a figure in mind that was based on what a previous kitchen remodel had run in a former home a number of years back. This time he wanted a higher-end kitchen and it was a bigger space, so he inflated the costs of the previous remodel.


    • Sold stock/mutual funds, $80K
    • $20K pulled out when refinancing
    • Appliances - took advantage of 12 month 0% financing and paying off with cash

    This still left us with investments, college funds, and more than 70% equity in the house.

    We watched our costs on things like our sinks, backsplash tile/brick, light fixture, light switches, outlets, and flooring, and purchased them ourselves. In the end our GC refunded us $3K, because we came in under budget.

    It was an expensive remodel, but the house and neighborhood warrant it. We have plans to age-in-place in this home, so it wasn't done with resale in mind.

  • MaWizz
    6 years ago
    last modified: 6 years ago

    Amen 2manydiversions we've had the same financial planner giving the same sound advice as you since dh and I got our first jobs out of college. We were DINKS (Duel Income No Kids) and needed help getting started saving and planning. I truly hope others will here your message. A good one! Most people don't expect the unexpected and certainly don't plan for it and live beyond their means. We've both lost our jobs at the same time and because of saving and financial planning we didn't have to change our way of living for an entire year til employment and is also a reason we can pay cash for a kitchen reno now. Echoing you save for your future, save, save!

  • powermuffin
    6 years ago

    Our budget was $15,000 including new appliances; we came in about a thousand over. It was a gut reno, including taking out a wall. We did all of the work ourselves, which is why our budget was so low. We agreed before starting that it was an all cash project. We used recycled materials as much as possible. We are frugal accountants, and serious DIYers.

  • aprilneverends
    6 years ago

    2ManyDiversions, it's like I'm reading my husband! lol

    (he doesn't share his calculations with me I'm too dumb anyway for anything mathematically complicated, especially these days..but I know he's on top of it. Very much so))

    "Anyone can lose a job, have an accident, become devastatingly ill, lose their savings due to unforeseen events" -can't agree more.

  • beachem
    Original Author
    6 years ago

    @2manydiversions totally agree with you. I grew up with the experience of losing everything except the clothes you wear 4x.

    We went overnight from multiple houses and a staff of 10 to homeless and $20 in total asset. We've had three medical situations that zeroed me out and I had to start over each time.

    When you look at the trade off of giving up every penny to pay medical bills to save the life of someone you love, it's simple.

    You can never save enough when it comes to catastrophic health issues.

    This is why my neighbors drive Range Rovers and their kids drive Porsches while I drive Huyndai and remodel my house with Craigslist, Restore and clearances.

    I want to be prepared for the next unexpected problem. By the way, I am doing spreadsheets for the remodel too. I'm documenting every penny spent so far and it's painful.

    @April you're never too dumb to understand finance. It's simply about how it's communicated to you. If you can drive a car, finance is a whizz.

  • aprilneverends
    6 years ago

    Well I can't drive a not the best example in my case.:).but I agree with you, Beachem, most people can learn most a certain degree, until they reach their own level of (in)competence. mine is quite low

    I'm just worse in it than in other things. I'd manage something simple and straightforward. I can easily be frugal when I need to be-but in a simple way..when you just don't have any funds to manage lol

    while my husband not only deeply understands it, he enjoys it. he does taxes himself, but it's not the fact he does taxes himself-he actually likes it..)))

    (no, he's not in finances)

    I also agree a lot depends on how things are communicated to you. That's why one of the best gifts life can give you- great teachers..

  • 2ManyDiversions
    6 years ago
    last modified: 6 years ago

    MaWizz, thank you for your kind words – started to post that 3 times prior but felt it bossy and preachy, then finally decided to go for it in hopes it might inspire a few to start saving (never too late!), and cut back on reno expenses if needed. Learn something new all the time: DINKS! DH and I were and remain DINKS as well!

    GW is an amazing source of inspiration and learning, sharing of ideas, advice, and guidance. I have benefited from this, and will continue to. At the same time, I’ve also found GW to be a place where I can become caught up in the belief that nothing is beyond my budget so long as it’s ‘quality’ or ‘just perfect and I have to have it’. I must reign myself in on occasion.

    aprilneverends: I’m quoting you here… just a few of your posts: “houses are capricious creatures and they want this and that, and I tend to listen.” “I function the best when things are tidy. my chaos is inside. the outside should balance it out.” “say working mothers..they're strongly expected to be both exemplary mothers, and exemplary're bound to feel like a failure up to several times a week:)” and my favorite: “I daresay I was never "cool"..I was strangely loved though. By both cool and unpopular. I didn't appreciate it much then, being a teenager with angst and all, but now I can see I had something precious, right on the palm of my hand, without really knowing its value”. aprilneverends, you express yourself quite beautifully, poetically. Do you write for a living? No, you may not say: “I'm too dumb anyway for anything mathematically complicated” or “most people can learn most a certain degree, until they reach their own level of (in)competence. mine is quite low”. I simply won’t allow it : ) “That's why one of the best gifts life can give you- great teachers..”. There are some wonderful ‘teachers’ here on GW… you are one from whom I’ve learned and benefited.

    beacham: When I read your initial post on this thread, I knew we were like-minded, at the very least on this topic (well, we are also cheese lovers! “Glorious cheese!”, and I loved the evolution of your pulls! That’s so ‘me’ also). I feel some of the hardships (though not all) we go through in our lives teach us our most valuable lessons… “This is why my neighbors drive Range Rovers and their kids drive Porsches while I drive Huyndai and remodel my house with Craigslist, Restore and clearances.” Clearly, you and I are related ; )

  • Kate
    6 years ago
    last modified: 6 years ago

    Yes to so much of this. My husband loves spreadsheets (I prefer paper and pencil), and tracks every penny spent with our projects. He'll also estimate costs when we get to that point, to help us set a budget and decide where we want to spend our money.

    As I stated previously, we are generally savers. Even though I know that is the right path, it can sometimes be frustrating. It can seem that other people spend foolishly, and then continue to get bailed out. When we did FAFSA this year for our oldest going off to college, they expected us to be able to spend all of our college savings on her, nevermind that she has 5 younger siblings that we're saving for as well. (Thankfully, she'll only use a small portion of her college fund.) If we had saved nothing, we probably would have only had to spend a few thousand out of pocket. I try not to think about it too much though. :(

    On the topic of cheese...I gave our daughter some Sartori Montamore cheese when we moved her into her dorm. She's a generation removed from WI, but it's in her blood! ;)

  • Rita / Bring Back Sophie 4 Real
    6 years ago

    Money is such a taboo subject and yet it sheds such a bright light on the things we value in ourselves, for ourselves and for others. But somehow, because the subject is not discussed in the open, I find people make huge financial decisions without as much thought as best because they can't bear to discuss the issue even with themselves. It's a shame we cannot be more open around this topic. It would probably save many people much anguish.

  • aprilneverends
    6 years ago

    2ManyDiversions I'll need to some time to recover since you're too kind..really..I'm deeply moved

    no, I don't write for a living:) poor mankind has enough of my ramblings to read even when I do not write for a living..

  • Rita / Bring Back Sophie 4 Real
    6 years ago

    April, Sometimes there should be a dislike button:

    "no, I don't write for a living:) poor mankind has enough of my ramblings to read even when I do not write for a living."

  • townlakecakes
    6 years ago

    We bought our house 7 years ago. We walked in and fell in love, then saw the backyard and fell more in love, just like you aren't supposed to do. It wasn't until we moved in that I realized just how small the kitchen was. The original 1975 cabinets that had been painted for listing started falling apart about 2 years ago. We had really bad subsidence issues and they started pulling away from the ceiling too.

    Were paying for our remodel with a portion of the settlement of my FIL's estate. Our budget is $30-35k, which is the 15% of the value of the house that "they" recommend staying within. It also happens to be the max percent of the estate we could spend, so there you go. We completely updated the plumbing and electrical and reframed 3 load bearing walls, so doing most of the work ourselves was the only way we could stay within our budget, even with a lot of really economical design choices.

    All that said, I have no idea where we are in our budget. I only know that we still have money left :-)

  • aprilneverends
    6 years ago

    "we walked in and fell in love, then saw the backyard and fell more in love, just like you aren't supposed to do."-LOL!!! rings so familiar!

    (Rita you've reminded me..I've been a member of a Russan-speaking forum, for a long time(which I left since then) some stage, when upgradng, they introduced two buttons: the " like" and "dislike" one...after several years they decided to take the dislike button away, as far as I remember...)) the experience proved to be too painful..))

    or they didn't, but a new, smaller forum(where I did stay) decided right from the beginning to leave only "like" button? I forget. but very very helpful decision lol

  • Rita / Bring Back Sophie 4 Real
    6 years ago
    last modified: 6 years ago

    April, I was not being serious. I appreciate the lack of dislike button. I was trying to be playful about the self deprecating comment you made, since you know I am a fan of your writing.

    ETA I thought I was very clearly providing a compliment. I apologize if I failed to convey my meaning properly the first time.

  • aprilneverends
    6 years ago

    Oh Rita I know of course!! I'm not that dense..:) I was just trying to awkwardly say "thank you"..:)

    (you really prompt me to open some rhetorical thread..but I need to come up with a name for it..))

  • Rita / Bring Back Sophie 4 Real
    6 years ago
    last modified: 6 years ago

    I'm sorry for my reaction, April!! I'm sorry I was the one being dense. I'm not having a very good day which makes me overly sensitive.

  • aprilneverends
    6 years ago

    you don't have to be anything sorry about least not about here! I heard some not very good news myself today, so it seems to be that kind of a day..

    lets hope tomorrow will bring better news with it, for us and others