How To Plan and Create A Budget For Kitchen Remodeling

You’ve been thinking about updating or renovating your kitchen for a while now. But where do you begin? And how do you budget for kitchen remodeling?

Make a Priorities list

The first thing you should do is make a list of your priorities. 

• What is the most important thing you want to accomplish?
• Do you want to refresh your space or are you hoping to gut your space and completely start over?
• Do you want all new high-end appliances? Or is your most important wish to have new cabinetry, a statement counter top, or a whole new kitchen layout?

Figuring out your priorities will help you when the quotes start coming in. It is not uncommon for people to get sticker shock at the costs associated with a remodel. If that’s the case for you, then having your priority list will help you to decide what you must have and what you can live without.  It’s important to write down your priorities, so if you have to cut back your budget, you can still focus on your top priorities.

Are you planning on doing this project with an interior designer? Or are you going to oversee the design details on your own?  If you’ve decided to hire an interior designer, make sure you add that to your list. And make sure to bring in the interior designer at this phase of the project as they can assist you in the planning and bring to your attention things that you probably wouldn’t think of on your own.

Create a Scope Of Work Document

If you do not have an interior designer, you need to itemize what you want, so that you can start creating your Scope of Work document. This is a document that literally lists all of the items/things you want to do in your new space. This is different from your Priorities list, as you can use the Scope of Work as a reference for contractors when they are creating proposals for your project.  The Scope should include details such as “demolish existing cabinetry,” and “remove wall between the kitchen and dining room.” It should also include items like “the contractor will need to supply and install the flooring material,” or “the client will supply all of the fixtures and the contractor will only install the new fixtures.”

Getting as detailed as possible will help your vendors to give you more accurate quotes. It will also be helpful because those vendors can then break down their bids so you can more easily see the cost breakdown.

Decide how much you want to spend

Setting a budget for your kitchen remodel and staying within it sounds so obvious and simple, but it's harder than you think and that is where an interior designer can be a big help to you.

The average cost of an upscale kitchen remodel is over $80,000.  You need to determine how much you can afford and also take into account the neighborhood that you live in. Make sure your remodel is in-line with the neighborhood so you don’t create a kitchen that is overdone, but rather an improvement on your real estate investment.

You should also consider how long you plan to stay in your house. If you plan on living in your home longer than five years, you should do a remodel that will make you and your family the most comfortable.  If you are planning on selling the home within five years, then only spend what you think you will get back when you sell the house.

Create a Budget Spreadsheet

Create a spreadsheet that outlines your budget and how much you’re actually spending so you can keep tabs on how much you are actually spending. If you see a cost overrun starting to happen, you can make adjustments accordingly.

Set aside 20 percent of your budget to handle the unexpected. It is almost guaranteed that you are going to encounter surprises in your kitchen remodel, especially in an older home. So make sure that you leave some money in your budget to cover the unexpected.  Leave some wiggle room in your budget to cover these surprises.

Know how the costs will break down.It is helpful to know how your kitchen remodel budget should break down.

• Labor will consume anywhere from 20 to 35 percent of your project costs.
• Cabinets can also take up about 25-35 percent of the budget. 
• Appliances can often take up to 20 percent of your budget.

Following is a list of items that will need to be included in your budget and should have a line item.

• Construction/contractor
• Appliances
• Plumbing fixtures
• Cabinetry
• Counter tops
• Flooring material
• Backsplash material
• Cabinetry knobs/handles
• Accent lighting (pendant lights), task lighting (recessed lights, under-cabinet lights)

Decide whether you’re going to stay in your home while renovations are taking place.

Living someplace else while the work is being done is a good idea and will lessen your stress. Take into account the cost of an apartment or hotel, storage fees, and moving fees.

If you stay, there will be a cost to your sanity as the project will take time. You could also set up a temporary kitchen in an adjacent room, and you should add in the cost of doing this. And you should factor in the cost of eating out. While your kitchen is torn up, you may be bringing home a lot of take-out food, and going to restaurants. So make sure to fit this added expense into your initial budget.