The importance of savings is now common knowledge, we all try to put some money aside for emergencies or the like. For example, the average Australian keeps as much as $28,426 in the bank. Yet, while we’re evidently great at saving, a general lack of advice and a belief that having less in the bank could cost in the long-term, mean that we’re far less skilled in spending that money when the time comes.
This spending inability is especially problematic for homeowners who most often save for the sake of home improvements in the first place. In reality, though, the only thing worse than making the wrong home spending decision is altogether failing to invest in your property. So, instead of sitting back and letting money go to waste in the bank, ask yourself, are these home improvements worth dipping into the savings pot?
Renovation
Whether creating new living spaces with attic renovation etc. or simply making more of the kitchen/bathroom that you’ve got, the need to knock down walls, strip out appliances, and generally start from scratch makes renovation a daunting expense. Yet, with even kitchen and bathroom renovations adding as much as 10% or more to overall home value (depending on area, specifics, etc.), this is more often than not an expense worth embarking on. Higher returns here are especially possible if you also make sure to take into account value-determinants before investment, including the condition of your property now, the prices of any renovated properties nearby, the right builders for the job, and the time it’ll take you to see returns from your efforts here.
Windows
With double glazing installation for even a four-bed house ranging upwards of $10,000, this could easily clear out your savings if you aren’t careful. That said, as many homeowners quickly come to realise, double glazing installation can also improve property value by 10% (despite typically costing a fraction of sometimes less lucrative renovations) while also significantly reducing your electricity bills. As such, a large portion of this money could come back to you even before the sale of your property down the line. Obviously, shopping around is again crucial here for getting a good deal, with prices between installers differing by as much as a few grand. It’s also worth making sure that your savings are in a position to cover windows for your entire house before you go ahead, with most window companies offering significant discounts for entire installations as well as one-off project installation costs, etc.
P.S: Apart from windows, you must also consider the fact that your doors need adequate attention as well. If ignored, broken or crack doors may also act as an open invitation for critters such as rats and roaches. The chances get elevated if it’s your garage door that’s broken.
Solar installation
Despite being a relatively new contender in the home improvement stakes, solar panel installation has quickly earned a reputation for being a lucrative option for individuals who undertake it in the right way. Regardless, a general lack of understanding about both the returns possible and the funding options to help bring this project to reality means that many of us are sceptical to spend savings here. In reality, though, as well as significantly reducing or even removing the cost of traditional bills, the potential to sell any excess energy that you produce here can quickly see costs coming back around. This is especially the case considering that many government grants will cover as much as 50% of installation in the first place. Determining your energy bills and usage as they stand can especially help to ensure that you install the right number of solar panels to quickly increase the money you spend here and put it right back into the savings that you’ve depleted to make this possible.
Decoration
With decorating materials or professionals often costing a few grand, complete home redecorations can also leave us chipping into the saving’s pot, if at a lower expense than the other projects mentioned. In reality, though, with decoration in itself not actively adding anything to home value, many homeowners are especially sceptical of spending a lot here. That said, a lack of direct returns doesn’t mean that decoration isn’t still worthwhile from a monetary standpoint, with a refresh most definitely cheaper than a home move, and with new decoration significantly helping to sell a property for more if you are embarking on a move. To make this worthwhile then, consider why you’re decorating, the immediate impact of doing so, and whether or not all of that adds up to justification for the money you’ve spent here in the first place.
Understanding the returns and worthiness of home renovation can be confusing. So ask yourself, could you benefit from dipping into your savings from any of these pursuits?
