5 Steps to Home Remodeling on a Budget

After home remodeling on a budget two times now, I want to share a few of the things I’ve learned along the way and created a home renovation budget template for you. Whether you’re using a home renovation loan or cash, it’s a major project.  Years ago, we refreshed our Lincoln Park condo and after a few floods, it felt like we went through a full home renovation there!  Then, of course, there is my favorite.  Our Roscoe Village home, albeit short, was a labor of love that I would 1000% do again.

home remodeling budget template home renovation fixer upper

I created the ultimate home renovation budget template for our Roscoe Village renovation that kept us on budget. It might be one of my greatest accomplishments to date. In my humble opinion, buying a home that needs work is often a super smart investment. If you buy something turnkey, your only upside is market performance.  However, if you buy a home that needs a home renovation, you’re infusing value into the property right if you invest wisely.  Here are my five steps to tackle for home remodeling on a budget.

1. Know your baseline costs and your max house value

home remodeling-home renovation

Let me nerd out here for a minute… In my corporate days, we would call this the topdown and bottoms-up forecast. First and foremost, it’s super important to understand the potential maximum house value of the property so that you do not over-invest. Matt and I have been borderline obsessive about this in the past, but it’s always worked out.  It’s easy to spend money, but what happens when you want to leave? You’d like your investment back, right? Don’t over-invest.

On the flip side, it’s also important to understand your total costs to live and your savings goals.  Whether you’re pulling a home renovation loan (more on that later!) or dipping into your savings, you need to have money in the bank for a rainy day and be able to pull your bills.

My home renovation budget template (here) will help you easily figure that out.

No matter the template you use, be sure to keep track of costs because things can go crazy.  It reminds me of wedding planning!

2. Set an overall budget for the home renovation

valspar paint home renovation loan

Once you’ve set your budget, it’s time to decide how you’ll pay for it.  Will you get a home renovation loan or will you pay for it with savings?  If you haven’t heard of it yet, there are home renovation loans or home construction loans, which you can get in addition to your mortage.  It’s a separate loan used purely to pay for renovation projects.  This is a loan calculator that I really like.

You may also love How I Designed My Kitchen

Otherwise, you can use your liquid savings to pay for everything in cash.  Typically, you’ll need a 10% downpayment with a contractor and then there will be payment terms going forward. If you’re paying in cash, ensure that you keep a 10-20% contingency budget and extra money in the bank just in case!

3. Create a high-level design plan

home remodeling

If you like this post, you’ll love: A kitchen remodel cost with greige kitchen cabinets

Here is my best trick.  Make a design plan for your home renovation!  Pull together mood boards and specifics that you love.  Create your ideal designs, but then also create a backup plan.  I personally love Pinterest for this reason, and I have a board dedicated to it here.

4. Price out your designs and prioritize

home renovation loan fixer upper

This part is not as fun, but it might be the most important.  When you’re home remodeling on a budget, you have to price out the designs you like.  I highly recommend my home renovation budget template for this, which you can get here, and to create line items by room of what the design entails.  My guess is you’ll land over budget and it’s time to start prioritizing.

One of the ways I prioritized during our City home renovation (here) was I picked one splurge item per room.  I focused on that item and then designed around it as inexpensively as I could while still finding quality items.

5. Create a master budget, timeline and get to work!home renovation

Work with your contractor to understand the overall timeline as well as when he or she needs specific items for install.  If products are delayed, it can then delay your contractor, which delays the overall timeline. Home remodeling on a budget can be tricky, which is why I made a template for you to make it easier!! You can track your financials and timing in it.

Download the Home Renovation Budget Template HERE

A huge thank you to Belen Aquino for these photos. 

Meet Jen

I’ve always had a love affair with creation. Since I was a child, I handmade my gifts or combined toys to design something new. Fast forward twenty years, and I’m still making my gifts every holiday and designing new ways to do things.


Let's be friends!


sign up for our newsletter to stay in touch


Where I Shop


In order to grow my small business, I earn revenue in a few different ways. I publish sponsored posts from time to time, which are always labeled. Sometimes I earn an affiliate commission on the sales of products or business resources I link to. I only feature items I genuinely love and want to share. Thank you for reading and supporting my small business!

%d bloggers like this: