Saving Up for Apartment Renovations
28 Jul 2021
Big city living can be restrictive at times — especially when it comes to your living space. Apartment choices can be limited, particularly in the housing bubble created by the wake of the coronavirus.
If you find yourself living in a fixer-upper apartment, there’s a good chance that you have quite a few things that you want to renovate. The problem is coming up with the cash to tackle those nagging home improvement projects.
If you’re an apartment owner living in a big city, here are some tips to help you save up cash to invest in your living space.
Calculate and Budget
Proper money management is the first step in saving money for renovations. If you don’t have good financial discipline, it’s difficult to tackle larger home improvement projects. Here are a few critical ways that you can set the financial stage to start saving for renovations:
• Grasp your current situation: It’s difficult to do anything, financially speaking, without a clear view of your current financial state. Don’t hide from your finances. Face them head-on and figure out where you currently stand.
• Create a good budget: As you gather info on debt, income, expenses, and so on, work to create a solid budget that helps you live within or even under your means. If you already have a budget, make sure that it’s up to date.
• Address debt: Consider what debts you have and how you can continue to pay them off. Also, think through how much your home improvement projects could impact your debt if you choose to take out any loans.
• Set up an emergency fund: Before you save for something long-term, like a renovation, make sure you have a healthy rainy day fund in place.
Once you’ve addressed a budget, debt management, and an emergency fund, figure out how much you can begin to save regularly to put toward improving your home.
Strategize, Build Your Timeline, and Set Goals
Getting your current finances in order is a critical first step. It ensures that you dive into the home renovation process with a healthy monetary foundation in place. This can help you avoid adding unnecessary financial stress or tackling more than you can afford.
Once your finances are organized and you’re beginning to save, you can work on building a financial strategy for your apartment renovation. This starts with considering your options.
For instance, do you want to renovate slowly as you save up enough money for each project? Or do you want to take out a personal loan, do the work now, and then pay it off slowly in the future?
If you want to borrow the funds, can you do so with a home equity loan taken out with your apartment as collateral? You typically need a credit score of around 620 or higher to get a home equity loan, especially if your credit history is spotty, at best. Consider if your credit is ready to handle a financial obligation of that size or if you need to work on improving it first.
As you assess your various options, cobble together a timeline of how you see your renovations playing out. You can also start to set goals, such as:
• How much you want to save by a certain point.
• When you want to be able to apply for a loan.
• What projects you’d like to tackle first and when.
As you work on the timing and end goals, you’ll begin to see a solid picture of what you can reasonably accomplish.
Responsibly Improving Your Apartment
There’s nothing wrong with improving your living space — it’s a great way to invest your hard-earned cash. However, you want to make sure that you smartly modify for the future, and this starts with your finances.
So, start by getting a solid understanding of your current financial situation. From there, work to set goals and create a solid apartment renovation strategy that will be a boon rather than a drain to your overall net worth as you move forward.