If you have the necessary expenses, it can be tempting to go on a home-improvement binge. You could take your frustration out on every pet peeve you have about your home, from the light fixtures to the countertops to that fireplace you always wanted. But sometimes, as the saying goes, less is more.
Making renovations is an important part of owning a home, though. When you add, remove, or improve parts of your home, you're adding value to it that (hopefully) will return to your wallet once you sell. But there is such a thing as doing too much, or biting off more than you can chew financially. So, here are a few guidelines to make sure your next home project is truly an improvement:
• Is it an emergency?
A washing machine that is starting to make your clothes dirtier might be seen as an emergency, but unsightly wallpaper is not. Similarly, a water heater making noises like it could explode at any moment is certainly an emergency, and countertops that aren't your preferred shade of tan are not. When you want to do home improvements, you first need to prioritize everything you want done. That way, you'll be able to accurately look at your finances and see what makes the most fiscal sense. And speaking of which...
• Save, save, save
Every homeowner should have an emergency fund, but that is the only thing it should be used for: emergencies. Dipping into these saving so you can get a new ceiling fan for the den isn't a good idea. So, you need to make sure you have a secondary savings fund for smaller, less important projects of home improvement. This way, you'll know that you can complete multiple projects around your home, and still have cash saved over for when the car breaks down.
• Will it affect your home's value?
This is an important question to ask for certain projects, but not for all of them. Sometimes, you make improvements to your home not because it will add numbers to a bank account a long time down the road, but because it will simply make living there more enjoyable. These two sentiments often overlap, but not always. If you can be sure that a project will add value to your home, and you can afford it as well, then you have the green light. If you really want to take on the project, but you doubt it would add value to your home (such as upgrading possessions that you'll just take with you when you sell), make sure you can afford it with some breathing room before making your final decision.