So you’ve been saving those picture-perfect home renovations and decoration ideas on your Pinterest. But before you start day-dreaming about the perfect house you want, you need to come back down to earth to think about how best you can approach it with a realistic budget in mind.

Buying an apartment in Singapore is not the cheapest in the world, but most people get caught up with how much financing they need to buy it and forget completely about the renovation part. This is why you need to start thinking about your renovation budget even before you start. We’ve listed some renovation financing tips below and some budget hacks to help you get that dream home designed within your designated budget.

Average Cost of Home Renovations in Singapore

The cost of home renovations can be far and wide, depending on a number of factors such as the type of property, age of property, scale of project and type of material chosen.  For build-to-order HDB, the average spend on renovations is between S$30,000 to S50,000, whereas the spend for resale flat is around 50% more.  With such a huge amount of money required(on top of paying for your new home), this is why the following points will be helpful to prepare you for the upcoming financial cost.

Set a budget

Setting a budget for how much you are ready to spend on your home renovations is the first step. Using the average price range, look at your finances and think about how much you can afford.

There are also renovation loans available if you need one. Most renovation loans in Singapore allow you to borrow up to S$50,000. This means that you might want to already start saving a sum of money for this even before you start house-hunting.

The fact is most people may not foresee that renovation costs can come up to this much. Beyond the $50,000, you can however, consider personal loans instead. Do note that renovation loans come at a lower interest as compared to personal loans. Comparatively, your renovation loans might cost about 6 to 7%, compared to a personal loan with an effective rate of around 12% to 15%. Thus, always take the renovation loan option first.

Be very cautious about taking too many loans though, since you will presumably already be servicing your mortgage loan, a renovation loan and the additional personal loan.

Be Realistic About Needs And Wants

Once you’ve set your budget, you need to now fit your “wants” into that guideline. Differentiate between what is a need and a want – the former being something that is required to make your home functional, whereas the latter is something belonging to the vanity category.  Even within your needs, like a kitchen counter, you can also choose between a range of materials and designs to suit your budget. Doing this will help you rein in your spending.

Compare Quotations

Now, you can use your Pinterest boards to help you decide which interior design firms suit your theme and budget. It can be tempting to choose someone based on price, but remember, aloppy work will cost more in the long run. It is thus helpful to visit forums and read up on reviews of these firms.

Shortlist about 3 to 5 of them and set aside time to meet the firms. Communicate your requirements clearly and ask for a quotation. This is when you compare quotes to ensure they fit within your budget. If you like the design of a certain firm but they are out of your budget, looks for ways to negotiate – changing a certain material or reducing the “vanity” part of things can help fit them into your budget.

Consider D.I.Y

While we are definitely not experts when it comes to home renovations, there might be certain tasks you can do on your own to reduce the total cost. For instance, you might want to paint the walls yourself, choose wall-shelves from IKEA instead of having them custom-made or buy some of the items like bathroom fixtures on your own.

Be Prepared To Exceed Your Budget

Well, this is more a precaution than a tip. Most people find that they exceed their initial budget! So instead of frantically looking for extra funds to complete your renovations, keep this in mind when you look through the quotations.

What this means is that If your initial budget was S$50,000, it doesn’t mean that you have to spend all that $50,000. Be more conservative about your spending, and try to cut as much cost as possible so that you’ve got some extra buffer if you need to pay more later.

You can also use the following steps to reduce the chances of busting your budget:

  • Not making last minute changes
  • Taking the right measurements and specs before you make any purchases
  • Be flexible about choosing the materials since the ones you want may be out of stock
  • Always check the renovation work thoroughly so that any defects can be rectified soon

Since money can be tight during this period, you might want to fund your purchases with credit cards so that you can use the cash you have for an emergency. Just remember to pay the bills on time to avoid any interest charges.

Also, if you find that you are just short of a small amount, such as a few hundred or thousand dollars, you could ask to pay the shortfall with your credit card. Credit card interest comes up to just about 3% per month, so if you can settle the charges within 1 or 2 months, it can be a more cost-efficient solution compared to taking up an extra personal loan.

Some credit cards may also offer cash rewards and rebates, so make good use of these, especially if you are going to be spending quite a large amount in the next few months.

Written by Lynette Tan

This article originally appeared on ValuePenguin

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ValuePenguin is personal finance company based in New York. DJ is responsible for building ValuePenguin’s presence in Asia, from researching personal finance topics in the region to building relationships with financial and media institutions. He previously worked as an investment analyst at leading hedge funds in New York including Cadian Capital and Tiger Asia. His expertise is in the global technology, consumer and financial industries. He graduated from Yale University with a degree in Economics, and speaks Korean, English and Mandarin Chinese.

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