Maybe you desire a more modern look or you have simply outgrown your space. Whatever the reasons are, it is undeniable that as our lives change so too our housing needs. The challenge, however, is the difficulty of meeting such demands with our already meagre income. We really do not have the cash to expand or renovate and our other expenses (mortgage, tuition, grocery bills e.t.c) all make it challenging to take on an additional loan for home improvement. After all, we already have a roof over our heads- thank God. So, to avoid the worries, we throw our renovation and expansion dreams on the back-burner hoping they’ll get done before we retire. But, I dare to tell you that with a little restructuring, we may well be able to finance our home expansion and renovation projects and do so debt free. Sounds too good to be true? Let’s take it in small digestible bites. I will not say steps as the suggestions are most effective when applied concurrently.
Consideration # 1: Are you living on a budget?
When I say budget, I don’t mean having an overall idea of what needs to be covered for the month. I mean, does every dollar have a name? Not Nanny or Benjamin or Shearer. Not those kinds of names, I’m talking about electricity bill, water bill, grocery, petrol and the list goes on. Names that dictate the assignment of the money even before it comes into your hand. That way, your cash is focused, it is guided by purpose. It is not idle and as we always say, the devil finds work for what is idle. When you are finished working your budget, you should have a zero balance- everything should be on assignment. Achieving financial goals starts with intense discipline, no one can do that for you. You need to be your own financial controller. The moment you become ‘every dollar conscious’ you will be surprised at how much money you throw away daily. You may realise that you have wasted the total cost of the balcony chairs you have been drooling after even though you so confidently professed that you just can’t afford to buy them.
Consideration # 2: Debt must die!
It is understood that many persons find it difficult to purchase their first home without a mortgage so your mortgage is your excusable debt. We can pardon that and other necessary debts. But on a middle or low income salary, added to your mortgage, do you also need a car loan for a luxury vehicle, a vacation loan, or even a wedding loan for the big production? For those of us who are living in unnecessary debt, doing a thorough budget will reveal that our spending power is way less than our salary. Why? We have borrowed too much! And unnecessary borrowing begets more borrowing so we quickly throw ourselves into an irredeemable cycle of debt. And, who is more frustrated than the hardworking employee who cannot look forward to his or her salary because next year’s income was spent last year on that dream vacation? Another killer is the credit card. 48% interest for 5% cashback is 100% ridiculous especially since the cash back can barely cover the yearly fees for the card. I know many millennials will refute this by saying that credit cards give access to emergency funds but this access is not free! So, how about saving a substantial emergency fund and treat it as a loan to yourself when you run into difficulties. You may even add a 15% interest charge which will be additional savings towards your project.
Fortunately, however, even if you started on a bad foot as it relates to money management, there is a glimmer of hope for those who are serious about their renovation and expansion project and are crippled by debt. You may apply the debt snowballing process and free yourself of the unnecessary burdens so you can have more cash in hand.
Consideration # 3- Get additional sources of income
One of the most disappointing things about getting out of debt and living on a budget is that your financial freedom is controlled by your salary which, in many situations, is hardly enough to get real business done. Well, that’s why many of us ended up in debt from day one. It’s certainly unfair to work tirelessness, exercise discipline but still can’t even patch our leaking roofs. For this reason, we need to tap into our creativity and get some additional streams of income, if you are already an entrepreneur, diversify your product, intensify the marketing efforts. Awaken the go-getter in you, in other words, “tek yuh hand mek fashion”.
Consideration # 4- Control your lifestyle
A funny meme crossed the internet lately, well, one of many. “Hairstyle on fleek, nails on fleek and the rats in your house on squeak.” This pointed to a heart-breaking truth. Many persons invest more in fun and entertainment than they do in creating a comfortable space to rest their heads. YOLO, that’s the expression we use to mask the guilt. You only live once or we sometimes say, enjoy today because we may die tomorrow. But what if we do not die tomorrow? Hmm…that is something to think about.
With a controlled lifestyle, limited debt, additional sources of income and a thorough budget, we may find ourselves more financially able to run our renovation/expansion projects debt free. Improving your staircase design, adding the baby’s room or redoing your kitchen counter may not be a mere fantasy. To help you to financially govern the project, these are four easy steps.
Step 1: Even if your cousin can do the job, get a number of quotations, search far and wide and compare prices.
Step 2: Schedule the work as per cash availability. You may not have a lot of money to run the whole renovation/expansion project all at once so let your budget be the dictator. A word of caution, never put people on a job without first securing and confirming their pay. They know where you live. Never start the job without securing adequate materials, you really don’t want to run short.
Step 3: Keep your workers motivated, pay them on time, reasonably and treat them with respect. Giving a Christmas cake, bottle of wine or even a simple gift is never too much. Encouragement does strengthen labour.
Step 4: Even when the project seem to be going within budget, be sure to monitor your spending. It is very easy for construction projects to go over budget. Also, beware of your overzealous workers who may want to force you to take on additional work you did not previously plan. Remember, debt free is key.
With these considerations and tips, your renovation or expansion project should be an exciting journey.
You may secure the service of a quantity surveyor, project manager or consultant by contacting QS’timates at 1(876) 825-3657 or emailing qstimates@gmail.com. Happy Expansion!