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5 Financial Questions to Ask Yourself Before Renovating Your Home

Home renovations can be exciting, but they can also be pretty expensive. If you are looking to improve your kitchen or revamp your basement, make sure you know what you are getting yourself into. Yes, you will need to prepare for a period of mayhem inside your house, but you will also need to financially prepare for the costs of the project. Before you decide on your new floors, make sure to ask yourself these 5 questions.

1. Does it make sense for your family?

Thinking about why you want to renovate your home should be the first step. Are you doing it because your neighbors just got a new kitchen and you want one too? Or are you thinking about selling your house in the future and want to improve your capital value? Either way, your answer to this question will affect your answers to the rest of the questions so it is important to get this one out of the way first.

2. What is your budget?

This will differ for every family, depending on what part of your home you want to renovate. Planning out how much money you have to spend on this project will help make your decisions on what can be fixed up. To ensure your budget is as accurate as possible, make sure to take advantage of personal financial management tools available to our customers.

3. Who can help with planning and making decisions?

At first you might think this is a project you can handle yourself, but a lot of times the plumbing or the electricity needs to be handled by an outside party. The last thing you want is to have to abandon the project half-way through because you realize it is more work than you bargained for. Take the time to plan out who you will need extra help from whether it’s an interior designer or a contractor.

4. How can I avoid paying too much?

To avoid paying too much on your home renovation, take advantage of areas where you can cut costs. Keeping an eye out for sales on materials you know you will need can help save and buying them with your rewards debit card can help you save even more. Receiving 1.00% cash back on your purchases can add up throughout your project.1

5. What is the potential ROI?

If you are planning on staying in your newly renovated home for a long time, make sure these improvements are changing your quality of life for the better. If you are planning on selling your home in the future, it will be profitable if you are able to factor in the improvement costs into the final sale. It is financially beneficial to look into cost effective renovations that will maximize your ROI before you begin the process.

Let’s say a home renovation isn’t quite in the budget this year, but you are hoping to upgrade your home in the future. Goalkeeper can help you plan for your dream renovation – check out how you can start a budget and set up your goal here.

1 The Debit Card Rewards Program (Cash Back Rewards) will provide 1.00% cash-back on all Qualified Purchases made by eligible Rewards Checking account holders if the account holder does any of the following; meet the requirements, is grandfathered in, or keeps an average balance of $2,500 or greater within the calendar month in their Rewards Checking Account, or receives total deposits of $2,500 or more in their Rewards Checking account via qualifying Direct Deposit within the month. Qualifying Direct Deposits are Automated Clearing House (ACH) credits, which may include payroll, pension or government payments (such as Social Security) by your employer, or an outside agency. LendingClub Bank may require documentation to verify that credits are Qualifying Direct Deposits. The value of this reward may constitute taxable income to you. You may be issued an Internal Revenue Service Form 1099 (or other appropriate form) to you that reflects the value of such reward. Please consult your tax adviser, as LendingClub Bank does not provide tax advice. Qualified Purchases include signature-based purchases made with a LendingClub Bank issued Debit Card tied to a Rewards Checking account enrolled in the Debit Card Rewards program. These are “credit” purchases that can be made in stores and online. To make a signature-based purchase, select “credit” rather than debit at point-of-sale kiosks. The “credit” option is most often pre-selected when making purchases online using a debit card. Online subscription payments may not be considered signature-based purchases. The payment transaction type (signature-based or other) is ultimately decided by the merchant and how the transaction is transmitted to LendingClub Bank at the time of processing. We reserve the right to determine if a transaction was a Qualified Purchase, and to establish additional types of Qualified Purchases that could be made available in a variety of ways. Any goods or services purchased with the LendingClub Bank issued Debit Card that are returned or otherwise credited to your Account are not qualified purchases. Unlawful purchases and purchases of currency, cash or cash equivalents (including, without limitation, currency from the U.S. Mint, Travelers Cheques, gift cards, Cryptocurrency, Casino Chips, Peer to Peer Payments, prepaid debit cards, account openings, loan payments, or other cash equivalents) made with your LendingClub Bank issued Bank Debit Card are not Qualified Purchases. We may require you to provide documentation to validate that certain purchases are Qualified Purchases. LendingClub Bank reserves the right to modify or discontinue this program at any time. Your enrolled account must remain open, active, and in good standing to participate in the program, meaning: No NSF (non-sufficient funds) items during the preceding twelve calendar months in your checking account (regardless of the type of checking account). An eFunds check must show no negative history in the preceding twelve months and all monthly servicing fees must have been paid in full for the 12 preceding months. LendingClub Bank reserves the right to modify the description of “good standing” at any time. If you or the Bank closes your account for any reason before the end of the statement cycle, you will forfeit all rewards accrued through your linked Debit Card during that statement cycle.

About the author

Rebecca Arcand

As the Marketing and Design Specialist at LendingClub, Rebecca makes understanding finances simple for the Millennial generation. Focusing on how to set up different accounts or how to save, Rebecca is an experienced financial mentor giving you advice that will make a difference.