Saving for Home Improvement
Plan ahead to save and finance home improvement costs
If you are looking to get more out of your home without incurring the costs of selling and moving, you should consider transforming your current space with home improvements that you'll enjoy. Home improvements can be minor and cosmetic or include a complete renovation, but all require planning and some level of investment.
Decide how you want to pay for home improvement costs
Before you begin any home improvement plans, you should always take the time to prepare a financial strategy. Decide how much you can spend versus how much you can stretch your available credit to finance home improvement costs. Then, decide if you are going to save and pay up front or finance the home improvements with loans. If saving for home improvement costs in advance is an option, you can reap extra financial rewards. There are several ways you can approach saving for home repairs. Choose the plan that works best for you.
Saving for home improvement in advance
You may not always have the luxury of defining your home improvements in advance, but when you do it is a good idea to get estimates and put a personal savings plan in place. There are two methods for saving for home repairs.
- Savings Driven: With this method, decide how much you can reasonably save per pay period and then divide the total cost by that amount. You can set the date to complete your project by knowing how many pay periods it will take you to save the amount you need.
- Date driven: If you have a bit of flexibility in the amount you are able to save each pay period, you can more easily work towards a concrete completion date. Choose the date you want the project completed and then divide the estimated cost of the project by the number of pay periods between now and then.If you can commit to putting aside the money required each pay period, you will be prepared when the date comes around. If you cannot, adjust the date accordingly or consider other options to finance the home improvement.
Using extra money to help finance your home repairs
Occasionally you may get money that was not expected or is on top of your normal yearly earnings. Whether this extra cash is from a tax refund, a bonus at work, or some other resource, add it to the other money you are saving for home improvement projects. This way you are prepared. And, you might earn interest on the balance while it sits in your account waiting to be used.
Create a mixed savings portfolio to get the most while saving for home improvement
If you are taking the time to plan for home improvements in advance, you can maximize your money by creating a mixed portfolio of savings products. Savings accounts will give you the most flexibility to regularly access your money. If you are looking to earn a bit more interest on your money, you could choose to put a designated dollar amount into a money market account or certificates of deposit. (Remember, if you are going to utilize CDs to earn interest, check the term of the account. You want to be sure you can draw on the money within your planned project period.) Look at the options available and choose the one that is best for you.
Creating a plan to spread home improvement costs out over time
If there are multiple repairs you are looking to make and don't have the means to finance your home improvements all at once, consider mapping out a long-term home improvement plan. One suggestion might be to plan one small project each year, one medium project every two to three years, and one larger project each decade. This creates the perfect scenario for utilizing a mixed savings portfolio or any of the other tactics detailed above.
Citizens Bank helps you finance home improvement projects
At a time when millions of homeowners are improving their current home rather than buying a new one, Citizens Bank can help you save. Our certificates of deposit are safe and secure, while our money market accounts offer greater liquidity. You can open a savings account online today. Or, for more information, you can speak with a Citizens Bank representative, at 1-877-360-2472.