7 Savvy Ways To Budget for Home Remodeling Projects in 2025
Home remodeling costs in the U.S. are expected to hit $569 billion in 2025 after a slight dip in expenditures in 2024, according to Statistica. The average cost of a home remodel ranges from $20,000 to $300,000 depending on several factors, including the type of project, home size, location, labor and materials cost, and the availability of supplies.
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A home remodel can transform your space into a beautiful and functional dream home that suits your lifestyle and increases your property value. But along the journey, there are bound to be twists and turns, especially in relation to budget.
GOBankingRates tapped the advice of the pros for cost-saving strategies bringing you seven savvy ways to budget for a remodel in 2025. From strategic planning to establishing a budget and financing options, here’s what you need to know.
1. Establish a Home Remodel Budget
Chances are you won’t be able to tackle every project on your wish list at once, especially if you’re financing your home remodel in cash. Dave Ramsey recommended prioritizing projects.
Function always comes first, as do spaces you envision clearly and those that increase your home’s value, said Ramsey.
Think of projects as an investment, always recoup more than what you put into the project, he said on the Ramsey Solutions website.
Fourth-generation contractor & CEO of The Contractor Consultants, Matthew DiBara advised living within your means by setting clear financial boundaries from the outset.
“To begin with, you need to have a clear budget; this will enable you to make appropriate decisions in the event of unforeseen expenses,” Dibara said.
“[You can use] an Excel spreadsheet to record all expenditures in real time [and provide you] with an overview of where your money is going.”
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2. Research Cost Estimates on Home Improvement Websites
After choosing your remodeling projects, it’s time for research. Home improvement websites such as Fixr, Angi, Forbes Home and others have cost calculators that estimate project costs by square footage, types of materials and several other factors.
Cost calculators can provide ballpark estimates until you obtain more accurate bids when contractors visit your home.
3. Get Bids From Several Contractors
As a rule of thumb, meet with at least three professionals to find a competitive price. To vet contractors, Dibara recommends looking for them on review websites like Yelp, Angie’s List, or the Better Business Bureau to “see what others have to say about them.”
“Check with your county or city website to determine if they have permits and credentials on record and if their contractor license and insurance are current,” added DiBara.
“A good contractor will also be upfront with their communication, including timelines and cost estimates up-front.”
Homeowners can also save money by booking projects during the off-season when business is slower. Peak season rates are higher in spring and summer, especially for outdoor projects and backyard remodels.
4. Adjust the Budget If Necessary
After you get remodeling bids, you might need to adjust your budget. You can cut costs in these ways.
Swap high-end materials out for mid-grade products: Marble can cost between $40 and $200 per square foot. If you’re over budget, moderately priced marble slabs will save money on a kitchen or bathroom remodel.
DIY simple projects: To cut costs, DIY-enthusiasts can do simple tasks such as painting, demolition, hanging shelves or even refinishing a deck.
Shop for materials in salvage yards: Recycling centers and salvage yards sell quality materials left over from larger jobs at a big discount. Also, your contractor might have materials from other projects.
Repurpose old materials: You’ve likely seen Ben and Erin Napier on HGTV’s Home Town transform an old door they found in a garage into a beautiful table. By recycling or repurposing old wood, you can save up to $5 or more per square foot on the price of lumber.
5. Pay in Cash When You Can
Suzy Orman recommended paying for renovations with cash rather than using a Home Equity Line of Credit (HELOC), which can lead to deeper debt — especially if you’re a retiree on a fixed income.
Orman emphasizes carefully considering investing in home projects you can “actually afford” and focusing on the “must-haves” rather than the “nice-to-haves.”
6. Tap Into a Healthy Emergency Fund
Do you have a padded emergency fund of more than six months in your savings? You can use the extra funds to finance your remodel without having to pay any penalties or accruing interest from a loan.
Orman recommends keeping a minimum of six months of savings in your emergency fund. So if you have 12 months of savings, you have six months to play with but try not to spend it all.
7. Know Your Costs Before Financing
If you don’t have enough savings to finance a remodel in cash, you can use the equity in your home to secure financing. However, it’s critical not to go into the project blind.
Jennifer Beeston, SVP of Mortgage Lending at Guaranteed Rate Mortgage in Coral Springs, FL, said it’s vital to “map out everything you want to do and the cost associated with it when considering a remodel.”
“Do not just open a home equity line without a game plan,” Beeston said.
“It may make sense to do a cash-out refinance, but you’re going to need that target number; one of the biggest mistakes people make is they start a remodel without truly understanding what everything is going to cost.”
Taking equity out of your home may be an affordable way to accomplish your remodeling goals without breaking the bank,” said Beeston.
“The key is [knowing the total remodel costs] so that when you speak with your mortgage lender, you can discuss the pros and cons and possibilities.
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This article originally appeared on GOBankingRates.com: 7 Savvy Ways To Budget for Home Remodeling Projects in 2025
