A house is
not a home until you’ve lived in it comfortably. It provides you shelter from
the elements and a bed to rest your weary head upon. You look forward to every
waking day – opening the curtains to greet the sunshine – then head off to the
kitchen for your first mug of coffee.
It is no
wonder that people love to do home improvement. They love their homes and want
to make sure it looks and feels brand new every time. However, home improvement
can be quite expensive.
it is on the rise.
to a study by Houzz & Home, of its 107,000 registered homeowners, 56,000 conducted home improvements in 2017. The average
expenditure per homeowner was listed at $60,400!
The need to
improve their homes may encourage homeowners to use debt to finance the
renovations. This can lead to a serious miscalculation as studies have also
shown that homeowners end up spending more than they anticipated
when it came to home improvement.
You may end
up borrowing more money than you originally planned for. If this happens, your
monthly cash flow will be thrown off course. It may affect how you balance your
budget and pay off your important obligations.
people use debt to finance their home improvement project? Here are the top
choices of debt:
- Credit Card
- Home Equity/ Home Improvement Loans
- Personal Loans
facilities charge you exorbitant interest rates in addition to giving you false
hopes. Credit card and lending companies paint a rosy picture of your dream
home without telling you the other side of the story – the harsh realities of a
you take out a loan, you should always factor in contingencies or the “What
- What if you get laid off from work?
- What if a medical emergency arises and you have
to take care of it?
- What if business takes a nose dive?
situations will have an adverse effect on how you can keep up with the monthly
payments for the loan.
happen is that the home improvement project gets put on hold. Sections of your
home will be left unfinished. Every morning you wake up to walls that are not
completely plastered or painted. Fixtures are not properly installed. The
undertaking was much more expensive than initially thought of.
matters worse, you have to wrestle with the reality of paying more debt every
no longer feels like a home. You feel trapped. It is not your home until you
pay off your debts and the work is completed. You are confined. It does not
feel like a home.
like you are holed up in prison – a debt prison where the only way out is to
settle the obligation.
using debt to finance your home improvement, save up for it.
out, ask an architect or an interior designer to give you an estimate for home
improvement. Set aside money for it every month – put it in the “Home
Improvement Savings Account”. Remember to factor in an increase in the cost of
the home renovation project.
year, you should be ready to carry out your home improvement project without
the extra burden of having debt on your back.