How to update your home without going into debt

We’d all like to avoid living in a dated home, but home improvement projects can be expensive and daunting. These eight steps can help you keep your home up to date without taking on a lot of debt.

Orange shag carpet. Peeling, faded wallpaper. Kitchen cabinets older than you. We’ve all seen it: homes that were modern and well decorated in some distant past – but which we now charitably refer to as dated. How do they get like this? And more importantly, how can we keep our home from becoming dated?

Most of us would prefer to live in a home that’s modern and up to date, but two powerful forces are working against us: time and money.

Change is slow. We’ve all had that experience where we run into a friend from our youth and are shocked at how different they look. At the same time, we feel like we’ve changed very little. Everyone is constantly changing, but since we see ourselves every day, we don’t notice it. The same is true of our homes; every day they get a little more dated, a little more worn down. But, because each day’s change is so small, what’s obvious to a first-time visitor to our home may be invisible to us.

Home improvement is expensive. Home improvement projects often have a big price-tag attached to them – sometimes in the tens of thousands of dollars. And the bigger the project, the higher the cost. The problem is, we often don’t feel a pressing need to update our homes until a LOT of things need updating (see force 1). When that happens, the scale and cost of getting from dated to updated can feel overwhelming. Often, it’s easier to do nothing.

One thing to keep in mind about home renovations is that you don’t have to do it all at once. I’ll repeat this, because this is where many people either back away or blow their budgets: Don’t. Do. It. All. At. Once. Whether your home is already dated or you’re just trying to prevent that from happening, your best approach is to do a little every year.

Here are a few simple steps to get - or keep - your home up-to-date:

1. Make a list: start by listing all the improvements you’re considering within the next 10 years. Write down things that must happen (do you worry about leaks every time it rains?) and things you’d like to happen (granite countertops anyone?) It may be a long list, but don’t get overwhelmed. This is just your wish list for now.
2. Price out each item: there are lots of websites that can help you estimate the cost of different home improvements, such as Home Advisor and The Canadian Home Builders’ Association. When looking at costs, consider whether you’re able to do some of the work yourself. If you’re handy, this could save you a lot of money.
3. Determine how much you can afford to spend each year: for many of us, this is the tough part. Before you can build home improvement into your budget, you need to know how much you earn and spend each month. If you’ve never crunched the numbers before, this will take some work. But trust me – it’s worth the effort. This will help you understand how much you can afford for home improvement each year.
4. Break your list into bite-sized pieces: look at your list and ask: can any of these be broken into smaller chunks? For example, a kitchen renovation can be broken into at least three smaller, less-expensive projects - floors, countertops and cabinets. Can any small items be grouped together? Your goal should be for each “bite” – each yearly project - to be relatively similar in cost. If many of your items are more expensive than the budget you defined in step 3, go back and see if you can make the bites even smaller or if you can free up more money by cutting back on something else in your budget.
5. Prioritize your list: this step may require a family meeting. I recommend bringing treats. It’s more of an art than a science, but in general you should consider at least two factors:
   • Urgency: is your roof leaking? Furnace on its last legs? Any improvements related to safety should be at the top of your list.
   • Quality of life: would an extra bedroom in the basement make a bigger difference for your family than an updated bathroom? What changes are going to have the biggest impact on your lives?
6. Set aside the money: once you’ve determined your budget, set up a separate account dedicated to home-renovations. This can be a high-interest savings account – if you want to have the money in-hand before you begin. Or it can be a low-cost line of credit, if you want to start now and pay it off over the course of the next year. Either way – make sure you’ve got a plan to pay for it.
7. Make it happen: this is the fun part. You’ve created a list, prioritized it and found the money. Now you get to make it happen and enjoy that newly updated part of your home. If you’re doing it yourself, check out online resources such as YouTube to fill any gaps in your knowledge and skills. If you’re hiring someone, ask your friends, family and co-workers for recommendations.
8. Wash, rinse, repeat: once a year, review your list. Have your priorities changed? Do you need to update your budget? It’s time to start planning next year’s project.

By creating a home improvement plan you can keep your home up to date, always have something to look forward to and, most importantly, avoid the cost and stress that comes with trying to do it all at once.