The Best Way to Avoid Home Improvement Project Budget Creep

The Best Way to Avoid Home Improvement Project  Budget Creep.

If you’ve ever watched a home-renovation show, you’ve probably witnessed the moment a contractor discovers a hidden problem that halts the project. Homeowners are forced to either fork over extra cash or change one of their ideas to cover the cost. The contractors can’t just leave it either, as it’s usually a serious issue like dry rot or bad plumbing. 

This situation happens in real life too... it'll put a damper on your DIY plans and send your stress levels through the roof.

With any home renovation project, you might experience unexpected costs and delays outside of your initial plan. Still, no one wants to spend more than needed on upgrading their home. 

Common Causes for Budget Creep

  • Poor management
  • Little to no budgeting
  • Undefined project
  • Unexpected expenses

Although budget creep is common, it’s preventable.

You can get the home of your dreams without going over budget and grappling for cash to pay for surprises.

The best way to avoid budget creep is pre-planning. It takes a little effort upfront but pays off in spades later. Through pre-planning, you can prevent ballooning, out-of-control costs, and sleepless nights full of stress. 


Step 1: Create a Scope of Work

A Scope of Work is a detailed list of steps your contractor or tradespeople should take when doing your project. This roadmap stops all that ‘he said/she said’ business and keeps everyone accountable. It’s a point form, written record of responsibilities, that may also have a space for cost estimates beside each task.

Keep in mind that the contractors and tradespeople are the professionals. So while it’s great to come up with a list by yourself, it’s important to double-check with them to make sure you’re not assuming what work they are responsible for.

Create a section for each trade and title each section appropriately (ex. Demolition, Electrical, Plumbing, Carpentry, Cabinetry, Misc. Installations etc.). Under each section add a list of tasks that need to be implemented.

If you’re unfamiliar with the specific tasks a trade might need to do to accomplish your desired outcome, don’t worry. I’ve created a FREE scope of work with all the basics, and you can customize it to suit your projects.

For example: under the Demolition heading, you might have the following points:

  • Remove and dispose of baseboards and trim
  • Remove and dispose of the drywall 
  • Remove and dispose of linoleum flooring
  • and so on...

Your scope of work should include a step-by-step instruction of everything that needs to be removed, disposed of, relocated, supplied and installed.

The specifics and order of these tasks depend entirely on your project. Having a general scope of work is never a bad idea. Pre-planning in this way keeps everyone on the same page and aligned.

After you've drafted your scope of work either photocopy or print it. Give (or email) a copy to each contractor/tradesperson that you meet with. You will want to review the scope of work with each tradesperson during your initial walk-through of the space. Ensure you update the scope of work if a trade mentions additional tasks you may have overlooked. Your contractor/trades should reference the scope of work when quoting your project, so the more thorough you are the more accurate the quotes will be.

During construction, a tradesperson will likely have questions like: "Do you want me to do xyz while we are here?". Request a quote for that add-on before you say yes. Everything comes at a price and you will be charged accordingly. If you approve the add-on then add it to the scope of work and provide the trade with a copy of the revised (and dated) document. Being systematic and organized helps you track costs and tasks, so there are no surprises. 


Step 2: Choose your Finishes and Fixtures 

Before ordering or purchasing individual items, you should have an idea of all of the finishes and fixtures you need. Indecisiveness can lead to cost over-runs later on. 

Look at your Pinterest boards and inspiration images to narrow down what you do and don't like. Choose finishes and fixtures that realistically fit your budget. 


Step 3: Create a Budget

This is an essential step! Before construction begins, you need to budget for everything. Here’s where the quotes come in. Once you’ve priced out the products, the cost of work by trade, finishes, and fixtures, add it up (don't forget to include shipping & taxes). Hopefully you'll be pleasantly surprised.

If you get sticker shock at this point, one option is to choose alternate finishes & fixtures with lower price points. Small costs here and there add up quickly, and may end up saving a larger chunk of change. Another option is to approach your contractor/trades and ask what tasks can be eliminated to save costs. For example: consider leaving that bulkhead in the kitchen and working with it, instead of removing it. Don't ask your trades to reduce their hourly rates, as it sends the message that you don't value their expertise and is a poor way to start a working relationship.

Be very aware of your numbers from the get go. Your established scope of work allows you to plug numbers in as you receive quotes, and keep an eye on your running subtotal. Then, add 20% to the final subtotal. I'm serious, hear me out...

It’s a wise rule of thumb to allow a 20% contingency. This will allow for upgrades and add-ons along the way (I’ve never EVER had a client that didn’t add or upgrade something along the way) and will allow a little room for unexpected surprises (ex. finding rot when replacing a window). Best case scenario, your contingency remains unspent after completing your project! 


We hope this helps you feel prepared as you tackle your DIY projects at home. If you're still feeling stuck make sure you grab our free scope of work here to get started!

Don’t hesitate to contact us with any questions about our services! Our team of Designers are ready to assist you in getting un-stuck so you can make your house your dream home.


xo Leanne