How We Budget For Renovations

March 15, 2016

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I know that talking about money is a little taboo and can be kind of uncomfortable, but renovating a home actually costs money (what?!) so we’re going to make today’s post a safe place to have a conversation about how our finances and budget have evolved to a place where we can afford to make major updates in our home. I hope you’ll chime in with your favorite budget tips!

First, I think it’s worth mentioning, however obvious it may be, that everyone prioritizes their finances differently. Some people prioritize vacations, dining out, clothes, home decor, etc.. But no matter where you like to spend your money after the bills are paid, a budget should allow you to do that. We make projects a high priority in our budget. It won’t be like this forever (that’s the goal, anyway), but we work project funds into our budget every month using YNAB (You Need A Budget), a personal budgeting web app (with companion apps for Android and iOS!).

I’ve been money conscious from a very young age, always earning, saving and tracking, thanks to my parents. They made a chart for all of my siblings and me that we had to fill out every time we got money from any source. It actually used to bring us a lot of tears to see that we would get $10 from babysitting, but after 10% to tithing and then putting half of the net in our savings account, we only had $4.50 to spend. I dug up this old photo as proof! Haha!

How We Budget For Renovations | Chris Loves Julia

In college, I started using Quicken to track my expenses, but now that we’re older and our finances seem to be going 100 different ways, it’s YNAB or bust! It automatically syncs our bank account and credit card spending to our phones and computer. The futuurrreee.

Budgeting isn’t synonymous with restriction. Being “on a budget” doesn’t imply that you are poor, or frugal, or cheap, or anything like that. It simply means you have decided to tell your money where to go, like a boss. If you care about spending money, whether you have a lot or a little to work with, you should have a budget. It’s how we are able to allot money to projects, guilt free.

How We Budget For Renovations | Chris Loves Julia

When we set out project goals at the beginning of the year (we always share those), we also set our project budgets, too. We then take those budgets and make them financial goals in YNAB. If projects aren’t one of your goals, substitute “paying off student loans” or “taking that big family vacation” in there. Our budget=our goals. So if we know that the back deck is probably going to cost us around $5k in May (EEeee!!!), that could break down to just $208 every pay period. And anytime YNAB tells us we have $30 left in our dining out budget or we didn’t use the $20 clothing budget (am I the only one that would rather by a throw pillow than a shirt?), we have the option of just moving that money over to the renovation budget that we add to every pay period.

On the flip side, if there’s $400 in the medical emergency fund, and Greta broke her arm (she didn’t, this is just hypothetical) and it costs us $500, we can assess which budget we want to move that from. Budgeting with YNAB is FLEXIBLE! Your plans change, life changes, you change your mind, and your budget can and should change, too. No guilt, just adjust and move on.

There’s four rules that we have learned through YNAB that we financially live by.

1.  Give every dollar a job. This way you never waste a penny. YNAB encourages you to budget to zero, which means not leaving any dollars unaccounted for. Just ask yourself, “What does this money need to do before I get paid again?” And assign every dollar accordingly. We love throwing extra dollars at our mortgage principle!

2. Embrace your true expenses. Don’t lie to yourself when you’re putting together your budget. If you always seem to spend $60 on gas a month, don’t budget for $50. And at the same time, if you need fresh flowers on your dining table, add them in if you can swing it! It’s the only way to budget correctly. Be honest about what you spend money on and how much it actually costs. We like to look ahead to larger, less frequent expenses and break them up into monthly amounts, so when you have that $1200 landscaping project coming up this summer (or Christmas in December!), then you would say, “OK, landscaping is a $100/month bill.” And really, it all flows back to #1, you are giving every dollar a job. It’s just that some of the jobs will be done today, and some won’t be done until far into the future.

3. Roll with the punches. People change, seasons change, budgets change. It’s a fact of life. If your insurance goes up, your salary goes down, or anything in between, be flexible and save a little for a rainy day so that small changes won’t affect you in a big way. You can create any category in YNAB, but there’s a default category, “Things I forgot to budget for” that always makes me smile and reminds me to just roll with it. And then we put $5 in there.

4. Age your money. This one might take a little bit of time to build up to, but once you are living on money that you earned last month (or the month before!) your stress will plummet, you will sleep better at night and it will feel awesome. Old gets a bad rap, but old money is good. In fact, I think the secret to getting ahead with our finances has been accounting for money we’re going to spend as far in advance as possible. As we save money for large projects, the age of our money naturally goes up (The program tells you how old your money is at all times, it’s truly fun to watch and I don’t even care how nerdy that sounds). And when you’ve been saving up for something big, and you spend that money, it will go down. That isn’t necessarily a bad thing, the goal is just that it never drops below 30 days, even when we spend a big amount at once.

How We Budget For Renovations | Chris Loves Julia

While we don’t often do a budget-breakdown of projects here (would you guys like to see more of that?), now you know that we definitely do behind the scenes. :) We are also in a fortunate situation after doing this for 7 years, that companies are eager to be a part of our projects, which helps us stretch our budget even farther–always a plus!

Ready to take a new look at budgeting? YNAB is offering our readers a 34-day free trial (no credit card required) when you click this link. 





Special thanks to YNAB (You Need A Budget) for sponsoring this project and, really, providing the most important tool we use.  





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What do you think?

  1. Greta Broke her arm!! Just read this old post and saw you foreshadowed to present day ???? Love reading your blog! Thanks for keeping it real always

  2. Jason says:

    Budgeting is really important! Thanks for talking about this topic, it was a great read. I also found some helpful tips for other readers and a free estimator here: what has saved me a lot is always adding 20% to the budget, just in case something goes wrong (which in my case happened most of the times).

  3. Alyce says:

    To follow up on the length of the trial, YNAB did not automatically correct my account to give me the 3-month trial promised. However, they sent an email a week before my 34 days was set to expire asking if I had any questions. I responded saying that I signed up through this blog post, and was supposed to get a 3 month trial, and they responded pretty much right away and added the two months to my trial.

  4. Nicole says:

    Thank you for this post, I found it so interesting and really enjoyed reading it :)

  5. MV says:

    Julia – how much is the monthly or annual cost for YNAB after the 3-month period? I can’t find anything listed on the website. Before I get all excited and link all my accounts, I wanted to find out what the cost is. Since we’re talking about budgets…. :-)

    • MV says:

      One other thing – can you suggest how to figure out budgeting for stores like Costco or Target where you could be buying clothes, groceries, toys, etc.? I think I always get stuck with budgets because of stores like this that carry everything. And by the time I’m actually logging it in, I have no idea which trip included what items. Thanks in advance!

      • Julia says:

        I’ll separate my transactions, grouping together all the food and then paying for clothes in a different transaction. It is barely any extra work. Another option is holding onto your receipts and sitting down once a week to reconcile. :)

      • Kathi says:

        In YNAB you can also split your transactions – I’ll take a quick look at my receipt and if I have 2 or 3 categories I’ll split the transaction accordingly. I’m not super strict about it either – I’ll round up to the nearest dollar etc to make is quicker.

      • Julia says:

        Yes! I love that feature.

    • Julia says:

      $5 a month or $50 for the whole year

      • MV says:

        Thanks for your answers!!! I’ve emailed YNAB and they have been so responsive and helpful as well. I so appreciate your feedback and input. :-)

  6. Tara Carlson says:

    Thank you so much for delving into the taboo issue of budgeting and how to afford renovations like these. I’ve always wondered how you made it possible! I think that budgeting is so, so important and I would love to know more about how much projects cost. If it’s not too personal, I’m also curious about what percentage of your budget you allocate to home renovation. I just have no frame of reference for how much those kinds of things cost (of course I know it depends on many factors like location, etc.). Thank you either way! This has been wonderful.

    • Julia says:

      We use Chris’s income to live on. Pay bills. Groceries. Go out, etc.. We use my income for renovations. After taxes and charitable contributions, we probably put 60-75% of it back into the house. Like I mentioned in the article, it won’t be like this forever, but that’s our priority for right now.

  7. kellie says:

    Hi Julia….

    I signed up to YNAB yesterday through your affiliate link… like others, when I signed up it still said it was for a “free 34 day trial”. I saw you followup comments addressing this issue, so shrugged it off.

    However, when I checked my YNAB account today (in the settings) , it tells me I only have 33 days left on my free trial and NOT 3 months as noted on your link or in your comments.

    I’d post a screenshot of the notice if I could to show you.

    I’d advise others to check as well as this seems like it’s not working as it’s supposed to.


  8. Michelle says:

    Julia, I want to give YNAB a try but don’t want my three months to start just yet. Do you know when this offer expires?

  9. I almost always prefer buying the throw pillow over the shirt!

  10. Liz says:

    I needed this post so bad. I’ve had “create a budget” on my to do list literally for months, but I always seem to find a new blog post I would rather go read. #worldscollide

  11. Pamela says:

    I would love to see a breakdown for projects! I don’t mind that you have so many sponsored posts and gifted items, but it would be nice to see the cost breakdown for projects since I would need to cover the full cost. I’ve spent a substantial amount of time going through posts adding up costs for projects I was considering doing in my home. Some were within my budget, others were not. I find myself skipping over more and more ideas when I have to spend 20 minutes clicking and adding just to find out it’s not in our price range.

  12. Zara says:

    I love YNAB! I just started using it a month ago (right before we bought a crazy expensive house :P) and I already feel like I have a much much better idea where my money is going and what money I have to spend on “fun” stuff. Fun to see others are as nerdy about it as I have become!

  13. Thanks for sharing! I think we tried YNAB a few years ago and it wasn’t syncing with our banks etc. Glad to know they’ve improved! I sent your post to my hubs :)

  14. Leah Prevost says:

    It’s still saying 34 day trial? Any word on if it is 3 months or 34 days?

    • Leah Prevost says:

      Nevermind!!! Just saw you replied to someone else who asked. Can’t wait to start using this :) thanks!

  15. Julia Laine says:

    My only advice (as an older DYI’er – I’m almost 54), is to stay away from equity lines to finance home improvements – unless you’ve bought a fixer upper and considered that as part of the total home price. I’m hopefully only 13 years to retirement and many how I wish I’d taken my own advice now. I’d be that much closer to paying off my home and putting more money into retirement savings if I hadn’t used equity lines to redo my bathroom and kitchen. Anyway, they say hindsight is 20/20, and I’ll definitely be sharing that advice with my own daughters. Home improvement is all the more satisfying when you can enjoy your “newness” without the weight of new bills.

  16. BeccaS says:

    Can’t wait to check it out! We currently do the envelope system but I love the idea of electronic “envelopes”.

  17. Kristen says:

    Great post! We prioritize traveling and people have often asked us about affording it (which always make me feel a little uncomfortable) but it’s just like you said…budgeting! We always set aside money towards our “trip fund”.

    I would love to hear more budget breakdowns about your projects!

  18. Jessica says:

    Thanks for the info! I have been using Mint as my budget tracker, but they seem to have many glitches and trouble keeping connected with all of my linked accounts so I have been looking for an alternative. I would also love to read about your budget break downs for each project since we plan on renovating as well when we purchase a home. Love, love, love everything you guys do!

  19. Hira says:

    I’d love to see a cost breakdown of renovations in your home. Definitely provides perspective and helps assess whether our budgets are totally out of whack or are at least a little bit realistic!

  20. kristin says:

    i just signed up by following the link, however it says only 34 days instead of 3 months. i am excited to give this program a try. Thank you for the opportunity.

  21. mrsprov says:

    I agree budgeting is important but it is a little misleading to title this post “How We Budget for Renovations” when an otherwise costly renovation – like your kitchen – seems to use mostly comped materials.

    • Julia says:

      It may seem that way, but that’s not entirely true. We have a post coming up on our kitchen renovation budget breakdown due to so many questions about it recently.

  22. Melissa says:

    Spot on with the idea that budget doesn’t mean poor, it means you track where you’re money goes (like a boss – haha! Might somehow put that on my wallet to remind myself). We’re working on that, but it does make me feel way less stressed and I see the difference between us and my friends (who all make way more than we do). Thanks for sharing!

  23. Hannah says:

    Great post! I’ve been putting off using YNAB for awhile but I think it’s time.

    I’m curious about whether you’re thinking about building equity (or not) when you plan for projects. We’re looking at buying our first home in a very expensive market, and every house we look at is one that I would want to renovate. But I also think there’s a lot to be said for making a home your own, regardless of building value.

    • Julia says:

      Good question! We bought this home because it was priced $130K less than the one for sale across the street and $100K less than the one that sold on our street a month prior. We knew it needed updating (our specialty!) and had a lot of equity potential. But we also love the neighborhood and plan on being here for a long time–my parents just moved in next door last year! As we are making updates, we’re aware we can go all out if we want to, but we’re mostly trying to choose finishes and updates that make sense for our family. Choosing the worst house in a great neighborhood is definitely the way to go to build equity.

  24. Corine says:

    I love how you say that budgeting is simply telling your money where to go. Like a boss! Yes! And it’s not easy for me! But this app seems SO easy! We’ve been putting off our basement for a year because of cost and truly I have no idea how much it will even cost! But thinking that I can just pay for it in advance every month by telling my money where to go, then pull the trigger takes so much pressure off. I usually just wait until we get a big check or some extra cash before we do a project. This post is gold. It’s simple and duh and why haven’t I been living my life like this? Also that picture you dug up!!! Sooo amazing.

  25. Gina says:

    This is so good. Thanks for sharing!! We sort of bit off a massive house renovation all at once, which makes budgeting hard, but I know we need to do better for the plenty of future projects there will be (as well as vacations!)

  26. Kari says:

    What a great post. I really would love to see more breakdowns of budgets in future posts. Your readers are people who (presumably) want to renovate their homes, but many of us get held back by money. How easy is it to dismiss bloggers as having everything paid for? When we know you don’t and we see what everything really costs, it removes barriers and helps us to take steps.

    • Julia says:

      Totally understandable. We’ve been getting a lot of questions recently about our kitchen renovation costs and we just tallied up how much everything was. Look for that post soon!

    • Sam says:

      Agreed. While your money is your business and I understand not sharing the details with people, it does lend some transparency and reality to some posts when we know what you really spent or what was gifted by sponsors. I understand that sponsored posts are part of the blog world but it does skew reality for readers, in my opinion.

      • Julia says:

        We do always note when a project or post was sponsored or when a product was given to us. I’ve avoided budget breakdowns in the past because a lot of our readers assume “budget breakdown” might equate to a cheaper way to do something, so that’s something I wanted to get across in this post. DIY, in general, has that vibe about it doesn’t it? But we are documenting our renovation and it’s not always the cheapest way with the least expensive finishes. Although we 100% stick to our budget regardless if an item is comped in exchange for publicity or not. We work with a lighting company in the past and he said, “You have a way of choosing really good moderately priced lights.” It made me laugh, but it also made me feel good to know he realized we wouldn’t take advantage of a partnership by choosing a light (or material or sofa!) that was out of our budget. We do plan on sharing project costs in the future, including costs of items that were donated. Look for a post on the kitchen budget breakdown soon!

  27. Heidi says:

    When you click the link, it only gives you 34 days free trial.

    • Julia says:

      Oh no! I’ll see if I can get that corrected. Thanks, Heidi! :)

    • Alyce says:

      Shoot, I just signed up and my account says I only got a 34-day trial!

      I would also love to see budget breakdowns! We just bought our first home, and we want to re-do the kitchen. Since we believe in paying for stuff in cash, we have to save up for it – but of course we have no idea how much we’ll need to save. I don’t even know what’s reasonable.

      • Julia says:

        Just heard back from YNAB, they are updating it now but assured me all of our readers who went through the link will get 3 months!

  28. Very important part of project planning, thanks for talking about it! We’re currently saving money for bigger projects down the road, but the one home/DIY project we are doing this year is a raised garden bed. I’m keeping close track of the expenses with buying wood, soil amendments, etc. The idea is to invest wisely up front and then have the garden pay for itself within a year or two. We are using a Google spreadsheet but I’ve heard good things about YNAB.

  29. GREAT post, thanks so much for sharing! ? Our bank has an app that tracks our expenses plus a “web bill pay” function that has really saved us – our first year as a married couple went more smoothly because of it! But I know a lot of people don’t have that option with their bank, so this is such a great alternative.

  30. Lizzie says:

    We use YNAB too and love it – it’s so handy having it on both mine and hubby’s phones, and on the computer too – so easy for us both to keep on top of our finances.

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