How Much Should You Budget for a Renovation?

The Question

Before we spoke to builders, before we requested quotations and before we had a budget written down, I kept coming back to one question.

How far will our money take us?

Looking back, I don’t think I was really asking what our budget should be.

I was asking what we could realistically achieve with the money we had and the money we could comfortably afford to spend.

At the time, I thought budgeting was about numbers.

Looking back, I think it’s much more about decisions.

My Experience

When we first started planning our renovation, I spent a lot of time trying to make our budget work on paper.

We lived in a three-bedroom bungalow with two bathrooms, a utility room, a sitting room and a very small kitchen. Like many homeowners, our first instinct was to make better use of the space we already had.

We explored knocking internal walls, removing the chimney breast and creating one large open-plan kitchen and living area. If that worked, we thought we might avoid the cost of building an extension altogether.

On paper, it seemed like the perfect solution.

Then we asked a builder to take a look.

Because it was a bungalow, removing the chimney would compromise the structure of the house. By the time we added the steelwork and structural alterations needed to make everything safe again, we’d spend a considerable amount of money without gaining much additional space.

That conversation changed everything.

Instead of trying to do everything at once, we decided to split the project into phases.

Phase One would focus on putting the existing house right.

The extension would only happen if, once Phase One was complete, we were comfortable with the money we had left.

That also meant accepting a compromise.

I agreed to keep our small kitchen for longer than we’d hoped.

At the time it felt like we were putting our plans on hold.

Looking back, it was one of the best decisions we made.

What I Learned

Looking back, I don’t think our project began with a budget.

It began with understanding what the house needed.

Only then could we decide what we’d like to do if the budget allowed.

That way of thinking completely changed how we approached every decision.

Rather than asking, “Can we afford everything on our wish list?” we started asking, “What’s the best use of the money we have today?”

For us, that meant repairing the existing house first and waiting until we knew exactly where we stood financially before committing to the extension.

Someone planning a self-build will face different decisions, but I suspect the underlying question is very similar.

What project can we realistically afford without putting unnecessary pressure on our finances?

Common Mistakes

One mistake I often see homeowners make is starting with a budget before they’ve properly understood the project.

Others do the opposite.

They design the perfect home without any realistic idea of what it might cost.

Both approaches can lead to disappointment.

Having a high-level understanding of both the project and the likely costs allows you to make informed decisions before you become emotionally attached to ideas that may simply not fit your budget.

Projects rarely go exactly as planned, but understanding your priorities before you begin makes it much easier to adapt when circumstances change.

Practical Advice

Before you focus on your budget, spend some time defining your project.

Ask yourself:

• What work is essential?
• What improvements would we like if the budget allows?
• What standard of finish are we aiming for?
• If we had to compromise, what could wait until later?
• Are we planning around what we hope we can afford, or what we know we can comfortably afford?

These conversations won’t produce exact numbers.

But they will give you something just as valuable.

Clarity.

And clarity makes every decision that follows much easier.

Looking Back

Looking back, I’m glad we made those compromises.

We now have a home that works beautifully for our family. The extension gave us the space we needed, and Phase One transformed the original house in ways we hadn’t imagined when we started.

Is it perfect?

No.

If someone handed me another €100,000 tomorrow, I could probably spend it without much difficulty.

There are still things I’d improve, rooms I’d update and ideas I’d love to explore.

But I’ve realised that’s true of almost every home.

At some point, the question stops being, “What else could we do to the house?” and becomes, “What else do we want to do with our lives?”

For us, that meant choosing holidays, family experiences and the peace of mind that comes from knowing we weren’t continually directing our savings towards the next home improvement.

Looking back, I don’t think the goal was ever to create the perfect house.

It was to create a home that worked for us, within what we could comfortably afford, and then enjoy living in it.

Perhaps that’s the real challenge of every renovation or self-build.

The challenge isn’t deciding where you could spend more money. There will always be somewhere.

The challenge is deciding when you’ve done enough.