Everyone’s dream home looks a little different, but it almost always requires some form of renovations to achieve that magazine-worthy look you want. Whether you are moving into your new BTO, or seeking to revamp your current home, renovation fees can look enormously daunting.

However, don’t let that discourage you too much! There are ways you can plan and fund your renovation project to keep it affordable while still giving you a fresh new look in your home. Below are some important things to keep in mind.

Start with a budget

Realistically speaking, we all have limits on how much we can spend on our home renovation project. Some people may approach this by listing out all the things they need, and then tabulating the total cost they need. But doing so often presents you with a sky-high figure that’s almost too difficult to stomach.

Instead, you could try a reverse method, of starting out with an amount that you are willing and able to spend. If you plan on taking out a loan (more on that later), you should factor in this amount as well.

It’s a good idea to allocate 10-20% of this budget as ‘emergency fund’, so you shouldn’t touch this until you have unexpected costs popping up. Then, with the remaining 80-90%, you should pitch this to your shortlisted interior designers or contractors to see what’s feasible for you.

Be as detailed as possible

The key to minimising surprise costs is to plan in detail. It’s easy to leave out some details in your budget, only to realise you forgot to set aside funds for it. For ease of reference, here are some things you should remember to consider when setting your budget:

• Professional fees for your contractor or interior designer

Should you hire a contractor or an interior designer? They might sound similar, but their jobs are quite different – and interior designers cost more. If you already have a plan for your home, going with a contractor might be a more cost-saving choice for you.

• The size & type of home

Most contractors and interior designers base their pricing on the size of the home. Make sure to communicate this clearly so that you get an accurate quote. If you are only remodelling part of the house, let them know beforehand as well.

• Materials

A significant part of renovation costs go into the materials you choose. Vinyl flooring can keep your costs down, but if you are going for marble or parquet floors, this will blow up your expenditure by a mile.

• Furniture and appliances

Don’t forget that you need to furnish your home with furniture and appliances after the renovations. These will be things you interact with daily, like your bed, fridge, and washing machine, so make sure you allocate enough funds to get suitable ones for your needs.

• Transportation costs

It will be a good idea to consider the costs you will need for employing movers, especially for new furniture or if you are moving into a new home. Check with your contractor to see if they provide such services or have included such fees.

• Electrical wiring & pipes

For new homes and some remodelling projects, you might need to settle the electrical wiring and pipe fittings as well. Being transparent about these costs when talking to your contractor will avoid any nasty surprises later on.

• An emergency fund for extra or unplanned changes

Create a contingency fund for an additional 10-20% of your total cost to cover for unpredicted expenses.

Use alternative funding sources wisely

Renovation is expensive business. Yet, it doesn’t mean that you can’t do it at all if you can’t afford it right now. Many moneylenders offer renovation loans that you can use to offset some of the costs of renovation.

Even if you can afford the renovation costs, taking up a loan might still be a wise choice in your financial plans. It can leave you with a comfortable buffer for your daily life, investments, and savings, while allowing you to pay for the renovation.

Definitely, taking up a loan has its share of risks as well, so it still pays to be prudent about how much you borrow. If possible, go for a dedicated renovation loan, as it typically has more favourable rates than the generic personal loan at moneylenders in Singapore.

When you budget carefully, you can make your dream home come true! Talk to the staff at a legal moneylender in Singapore to find out more about home and renovation loans you can use.