We have been planning our family room renovation for two years, diligently saving our pennies until we had enough to pay for the renovation without going into debt. After all- I have to practice what I preach!
In August we committed to begin. It was now or never. It’s a modest reno as reno’s go; replace an old fireplace that no longer works, replace the worn carpeting with eco friendly “green” flooring, improve the lighting in the room and install some much needed storage cabinets to make the room more functional.
We rationalize this expense by thinking that since our home is a big asset, it’s important to maintain it, which means that every 25 years or so you need to think about giving it a face lift – or at least fixing the broken stuff!
The room is small - 200 square feet. Even so, I was shocked when we began adding up all the estimated costs. We’re not talking high end top o’ the line stuff here, although we are choosing as good a quality as we can afford. And, as the experts advise, we planned an additional 10-20% for unexpected surprises once the reno began.
Ours is a prime example of just how wrong a reno can go. As we were removing a speaker wire that ran along the baseboard we discovered water…in the walls….did I mention that this was a basement reno?
I won’t bore you with all the details, suffice to say that the project has blossomed (understatement) into a nightmare on B*** street complete with cracked foundation, sopping wet insulation, improperly sealed siding, blocked drainage system… and yes we did have a home inspection when we bought the home seven years ago. Obviously not a Mike Holmes inspection!
And no, we do not qualify for the Mike Holmes show… I already checked. Oh and nothing is covered by our home owner’s insurance policy either.
So, our carefully laid plans are now on hold and we are faced with a tough choice which involves a set of competing values:
Pay cash for the necessary repairs now, using the reno money and finish the rest when we have more money saved; which means the project may not be completed until this time next year… honouring our value of not having debt,
Or, finish the project now, pay for as much as we can with cash and use the line of credit for the rest, so we can have order back in our house… honouring our value of having a peaceful uncluttered space to retreat to at the end of a stressful day.
As challenging as our situation is, it is typical of financial decisions people face every day. We are often forced to make financial decisions involving a competing set of values. The best advice I can give is to weigh which of the values is more important, be honest with yourself about all the possible consequences, put a contingency plan in place and then go for it, knowing you made the best decision you could under the circumstances.