Sunday, March 22, 2015

Keep Your Mind On Your Money

From the beginning of your home renovation project you need to be tuned into the money you're spending on the mission.  As I mentioned before (see Attention First-Timers) your budget and your schedule will drive your project.  However, I'll be straight-up and say that I've never kept track of my time.  For one thing, resurrecting one of my Pig's Ears is something I really enjoy and keeping a log of the time I put in hasn't ever felt right to me.  On top of that, it's always seemed impractical.  I can easily be bouncing between six or eight tasks before lunch; inside, out, under the house, or up on the roof.  I'm waiting for things to set, dry, or cure and it's all mixed up with family and personal stuff.   So... I don't maintain a record of my time, but the money is different and I keep track of every cent.

Every dollar you spend will come with an opportunity to receive a receipt.  Sometimes you have to remember to get it and save it, but that's on you.  Take the proof of purchase from each sales clerk and make some notes right away (before you forget).  Some things on the receipt will come with a description that's helpful, words that will jog your memory later on.  Paint from a small, local hardware store may simply read Paint.  Perfect.  However, that same can described on a big box store receipt may show up as a coded description comparable to ABC123XYZ.  You're going to have countless receipts and a month down the road you'll have a hard time remembering what you bought.  The high tech code will give you limited clues, so make notes on the receipts immediately.  If you buy shingles, some sand paper for prepping the front door before you paint it, make a note like: Roofing and Painting.  And if you buy a few 2x4s while you're there, make notes about that with something like Framing.   

Also, separate your personal expenses from renovation costs.  For example, you may buy supplies for Plumbing, Landscaping, and Roofing in the same trip to the store and a check-out you grab a drink or a candy bar.  Break out the snacks when you total things up.  You'll want to have an accurate accounting at the end of your project so be committed to leaving anything not related to the job out of your expenditure figures.  This may seem obvious, but it's an easy/bad habit to fall into.  Keep in mind that buying a tool for a scope of work you're doing yourself is a legitimate project expense as well as special clothing and/or other personal protective equipment.  Create a budget category for these or absorb them into an established budget item, but don't leave them out.  These are renovation expenses and need to be accounted for in your expenses.
I always want to know what I spend on each project down to the final penny.  If I spend a quarter for a bolt to fix the mailbox, I keep a receipt and add that to the figures.  If I spend several thousand at the attorneys office on closing costs before I start, that's part of the cost too and I'm mindful of that from the beginning.  Now, I have to make adjustments for project homes that I live in and sometimes that takes some extra thought, but I make the effort because I want (and need) to know how much I'm spending, and at the end, how much I actually spent.  

Figure out a system early on and be accurate and consistent.  It doesn't have to be elaborate or sophisticated, just come up with something that works for you and keep at it faithfully.  You'll be glad you did this, during the renovation and at the end.  Sometimes you'll be surprised at how much more you spent, and sometimes it'll be the other way and you'll have extra money to spend in an area where you went over.  You have to keep tabs on the expenses from the start and throughout or otherwise you be months into your project and you'll have to play catch up. 
Stay tuned into your budget from day one and keep the money details in focus until your project is complete.  It will take a little time at first, but in the end it will save you time and make it easier to manage your project, big or small.

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