First Person: Financially Preparing for an Expensive Home Renovation

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After purchasing our first home in early 2012, my husband and I were eager to start updating our new place. However, we decided to wait until our finances fully recovered from the closing costs, loan fees, and moving expenses. Now that we've recovered, we've begun our first large home renovation project.

The first major project we plan to tackle is our kitchen. We aren't doing a full remodel; it's more of a face lift, but even that is expected to cost us around $2,500.

Here are three ways we've prepared ourselves financially for an expensive home renovation.

Determine our spending limit

Our finances have rebounded from buying our house, but that doesn't mean we have endless money to toss around. I knew the first thing we needed to do was sit down and go over our plans, budget, and the materials list to see how much the renovation was going to cost and what our spending limit was. Then, we needed to figure out where the money for this project was going to come from.

Gathering the money

As of February 2013 my husband and I no longer carried balances on our credit cards, so we couldn't put any part of this renovation on a credit card. That left us with one option; save the money. Shortly after we purchased the house we started contributing small amounts of money into a savings account for home renovations. Then, once we were ready to begin the process, we started tweaking our budget to free up additional money for the project.

Shop for bargains

While tweaking the budget and saving money helps pay for the items needed, it doesn't hurt to keep an eye out for great bargains. Something as simple as buying painting drop cloths on sale truly does add up to a decent savings over time. I bought all of our painting supplies (minus the paint itself) on sale over the last year. Our paintbrushes were $5 each, and I bought them during a buy one get one free sale. I also bought our paint trays on sale. They retailed for $7, and I got them for $2 each.

My biggest savings will be on our new dishwasher. The model we plan to purchase retails for $699, but with discounts it will cost us $500. The $200 we save on the dishwasher will go toward replacing the kitchen sink.

Tackling a major renovation isn't easy, and it gets even harder when you plan to do the labor yourself. Doing everything you can to prepare yourself financially before beginning the project means you will have one less thing to worry about.

*Note: This was written by a Yahoo! contributor. Do you have a personal finance story that you'd like to share? Sign up with the Yahoo! Contributor Network to start publishing your own finance articles.

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