Does Your Renovation Need a Contingency Fund?
Many people have set aside a good chunk of money for their renovation project budget, even setting aside a 10 per cent buffer for things they might have overlooked. So why is it that some renovation consultants are recommending setting aside an additional 20 per cent of your budget as a contingency fund for other less necessary aspects of your renovation that might arise along the way.
Actually, the cost of a renovation project is not quite easy to determine. For sure, there will be some unforeseen expenses that you have not thought of during the beginning of your renovation project. Remember that it is important to know which costs you should accommodate and which ones are absolutely unnecessary.
The most common complaint from many Singaporeans is that they went over their set budget, even with the 10 per cent buffer. Therefore, balancing your budget is one of the many skills you have to learn during your home renovation process. You can scale back on some of the items which are not deemed to be absolutely necessary. For example, instead of paying for the best, latest tiles, you can get slightly older designs which cost a lot less. Instead of buying that very expensive antique row of cabinets, you can have built-in ones which might cost more.
The contingency fund is something that you use only when you badly need it. If your renovation fell within your initially set budget, you do not tell yourself that you can get a fountain or a snazzy chandelier just because you still have a contingency fund that you can make use of. If your renovation fell within your budget and you did not even touch your contingency fund, you should be proud of yourself for having managed your renovation costs very well.