Step 2 – Your budget

Woody Allen said once: “Money talks. All mine says: goodbye!” Funny it is for sure, but believe me, you don’t want to tell things like this.
After you’ve spent hours paging through design magazines, imagining every aspect of your dream kitchen, it’s time for a reality check: the budget. Sure, it’s not as fun as contemplating countertop choices, but giving careful consideration to budgeting can keep a project from turning into a nightmare.


While the national average cost for an upscale kitchen remodel is roughly $107,000, according to Remodeling Magazine‘s 2006 Cost vs. Value report, you may spend more or less depending on a number of factors. First, conduct a thorough and honest examination of your finances to reveal how much you can afford to spend. The National Association of the Remodeling Industry (NARI) offers a worksheet that makes this easy to do. With that number in hand ask yourelf, “How long do I plan to stay in my home?”

“I have a rule of thumb,” says Everett Collier, president of NARI “If you are going to stay in a home for five years or less then the improvements should be viewed as improvements on investment. If you’re going to be there for a longer period of time, you want to look at what’s going to make you and your family the most comfortable.”

Depending on how you answer that question, your budget might need to cover a kitchen facelift (like a new countertop and a fresh hue for the walls) or a complete kitchen overhaul.


Spending money is easy. Spending it well is not so. Make sure the things you spend on are the ones you don’t want to replace again. At least not very soon. (say at least a few years)

To keep costs down, think twice how important “goodies,” such as interior fittings on cabinets and intricate crown moldings are to the overall look and function of your kitchen. In a big kitchen they add up. A portion of the budget may also be allocated for flooring such as concrete floors or whichever flooring material you intend to use such as laminate flooring. If your budget doesn’t permit new floors, you can also opt for carpet cleaning.
Also, when budgeting, don’t forget a line item for labor costs, which usually end up around a third of a project’s total budget, says Jeff Cannata, president of Designer’s Showcase Kitchens & Baths Inc. in Carol Stream, Ill.


Always leave a little wiggle room in the budget for the unexpected. If you calculate with 8-10%, you’ll be fine. There are all sorts of budget-busting surprises lurking behind the walls and floors of homes (especially if it’s an older house). Last minute changes, known as change orders, cost time and bust budgets, too. You might elect to upgrade your choice of countertop halfway through the project, whether you’re leaning towards installing granite or quartz countertops. Though you can’t predict the unknown, you can prepare for it financially. As a cushion, Cannata recommends leaving 10 percent of whatever number has been budgeted for labor costs.


There are many ways to foot the bill for a kitchen remodel, but a home equity loan may be the most popular because it’s tax deductible. Other options include refinancing, no-equity loans, FHA loans, personal loans, loans from retirement plans or borrowing against a life insurance policy. Whatever type of financing you choose, make sure to shop around for the best rate. Even if you have cash in hand, oftentimes borrowing at a low-interest rate makes more financial sense than pulling your money out of an investment account or online broker yielding a higher rate of return.


Once the project begins, track actual spending on a spreadsheet or a simple piece of paper, and compare it often to budgeted amounts.

  • A New Kitchen Step-by-Step
  • Step 1 – The plan
  • Step 5 – Kitchen lighting
  • Blue Kitchen
  • Step 6 – Kitchen Floor Basics
  • 1 comment so far ↓

    #1 eva on 07.23.09 at 9:49 am

    how much is the unit?

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