Five | Dollars and Sense - the budget series

If there is one constant in renovating - it is that plans will constantly change! Some changes are big, some are small, some might save you money, some you might choose yourself, but the end result may mean you need to review and adapt your budget.

We all react differently to budget pressure - it may be ignoring the issue, walking away and leaving it with your contractors to deal with, or accepting that there is no option but to spend more. So let’s talk about what happens when your budget isn’t on track and what you can do to take control of the situation.

Key Reasons for a Budget Blow Out

Your budget is a tool, and used well will help you make informed decisions and understand if you’re on track. Understanding why a budget could change will allow you the chance to remove or minimise these risks, and be prepared should they occur. Below are our top reasons for budget changes.

1. Unforeseen work or unknowns with your house 

Surprises, they will happen, and this is what makes renovations challenging and stressful. The difficulty comes from never completely knowing what you are dealing with compared with a new build, where you are starting from scratch. If you are opening up walls, pulling up flooring, moving services, it may not be possible to check beforehand the condition or if it has been done properly, and it is only when you start renovating that will you know. Even the most experienced of us can’t predict everything. 

2. Changes 

We often make changes as we renovate. It can be hard to visualise plans or ideas for many of us - when you see your project take shape it may look different to what you expected. You might have a better idea which will make living in the space better, or there is just something you like and want to include. While these will no doubt produce a better result, be aware of any cost impacts. It may be reworking completed areas, returning already purchased materials, delays while you make decisions, or selecting cheaper products. These are changes to your budget that are in your control and you choose to make as you go. 

3. Incorrect scope of works 

This occurs when you or your tradespeople are not fully aware of the scope or details of the project when estimating or pricing. Knowing where to start and stop, what is included and what is excluded, even small items you have forgotten to add in to the project can tally up. You firstly need to be clear yourself on what you are wanting to achieve, and then make sure your tradespeople are also clear on this, otherwise they may allow for too much, or not include everything you wanted them to. 

4. Underestimated budget allowances 

Renovating and tradespeople are not cheap. It may be you’re optimistic about costs, making guesses, or just mistakes - but in many situations we simply have not allowed enough budget to complete a task. 

This blog was sponsored by Kiwibank. Whether you're taking your first step or next step on your property journey, Kiwibank's home loan experts are available to help you through the process.

Their Mobile Mortgage Managers can come to your choice of location and their Banking Consultants are available at your local Kiwibank branch. Call 0800 000 654 or visit for more information.

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