Spring is kickoff season for many kitchen remodels, bathroom updates and deck repairs, but recent economic turmoil may have homeowners questioning their home improvement plans.
Spending on home renovations is expected to slow this year because of factors such as declining home sales and values, rising interest rates , continuing inflation and rumblings of a coming recession, says Abbe Will, senior research associate with Harvard University’s Joint Center for Housing Studies.
As economic growth slows, planning and prioritizing will be key to remodeling confidently. Here are five tips to help you remodel in an uncertain economy.
1. Start with an emergency fund
Even when the economy is doing well, it’s ideal to have an emergency fund before starting a remodel, says Eric Maldonado, a certified financial planner based in San Luis Obispo, California.
“What you’re trying to avoid is starting with nothing saved, taking out debt to afford these things and not really providing yourself with a smart foundation to start from,” he says.
A six-month fund is a good goal, he says, especially if you’re concerned about losing your job.
2. Narrow your financial goals
After your emergency fund is set, put remodeling on a short list of your financial priorities for the year and distribute your budget accordingly, Maldonado says.
For example, if your main goals are to pay off debt, contribute to your kids’ college funds and begin home improvement projects, determine how much each goal costs and how much you can afford to spend on them every month, he says.
“It’s kind of like putting the big rocks into the jar first,” he says.
This may mean slowing progress toward other financial goals, like early retirement or purchasing a new car.
3. Prioritize repairs and small updates
If high gas and grocery bills have left you