Budgeting for Your Renovation: Complete Guide
A realistic budget is the foundation of a successful renovation. Understanding costs, building appropriate contingencies, and knowing where to invest (and where to save) helps ensure your project meets both your vision and your financial goals.
Understanding Renovation Costs in Alberta
Current Market Rates (2025)
Costs have stabilized after pandemic-era spikes, but quality materials and skilled labour remain significant investments:
| Project Type | Budget Range | Typical Average |
| Kitchen (cosmetic) | $25,000-40,000 | $32,000 |
| Kitchen (full) | $45,000-85,000 | $60,000 |
| Bathroom (powder room) | $8,000-15,000 | $12,000 |
| Bathroom (full) | $25,000-50,000 | $35,000 |
| Basement (basic) | $40,000-70,000 | $55,000 |
| Basement (legal suite) | $80,000-120,000 | $95,000 |
| Exterior (siding/windows) | $30,000-80,000 | $50,000 |
| Home addition (per sq ft) | $300-500 | $375 |
What Drives Costs
Labour (35-45% of budget)
Skilled trades are in demand
Complexity increases labour time
Remote locations add travel costs
Materials (35-45% of budget)
Quality levels vary dramatically
Custom vs. stock pricing
Current supply chain conditions
Overhead & Profit (15-25%)
Permits and inspections
Project management
Insurance and warranties
Business operations
Building Your Budget
Step 1: Define Your Scope
Before getting quotes, clarify:
- What's included vs. excluded
- Must-haves vs. nice-to-haves
- Quality level expectations
- Timeline requirements
Step 2: Get Multiple Quotes
For accurate budgeting:
- Obtain 3 detailed quotes
- Compare apples to apples
- Ask about what's included
- Understand payment terms
Step 3: Add Contingency
Recommended Contingency Amounts:
Cosmetic updates: 10%
Moderate renovations: 15%
Major renovations: 20%
Older homes: 25%+
Step 4: Include Often-Forgotten Costs
Easy to overlook:
Permits and inspections
Temporary living arrangements
Storage during construction
Eating out during kitchen reno
New furniture/accessories
Window coverings
Landscaping repair
Where to Invest vs. Save
Worth the Investment
Structural & Systems:
Foundation repairs
Electrical upgrades
Plumbing updates
HVAC efficiency
High-Impact Areas:
Kitchen layout and cabinets
Bathroom tile and fixtures
Front entry and curb appeal
Insulation and windows
Quality Materials:
Flooring in high-traffic areas
Countertops you'll use daily
Hardware you'll touch constantly
Where to Save
Lower-Impact Areas:
Interior doors (paint-grade vs. solid)
Closet interiors
Basement finishing levels
Secondary bathroom finishes
DIY Opportunities:
Painting
Simple landscaping
Cabinet hardware installation
Light fixture swaps
Value Engineering:
Similar look for less (e.g., quartz vs. marble)
Stock sizes vs. custom
Quality mid-range vs. premium brands
Financing Your Renovation
Common Options
Cash
No interest costs
Keeps home equity intact
Best for smaller projects
Home Equity Line of Credit (HELOC)
Lower interest than other loans
Flexible draw schedule
Tax-efficient (consult accountant)
Mortgage Refinance
Roll renovation into mortgage
Lowest rates available
Best for major projects
Personal Loan
No home equity required
Fixed payments
Higher interest rates
Credit Cards
Only for small purchases
Avoid carrying balances
Some offer rewards/protection
Calculating Affordability
The 5% Rule:
Comfortable renovation budget ≈ 5% of home value annually
Example:
Home value: $600,000
Annual renovation budget: $30,000
Over 5 years: $150,000 in improvements
Avoiding Budget Pitfalls
Common Mistakes
1. Underestimating costs by 30-50% 2. No contingency for surprises 3. Choosing cheapest quote without understanding differences 4. Scope creep during construction 5. Forgetting soft costs (permits, design, temporary living)
Red Flags in Quotes
Significantly lower than others (what's missing?)
No detailed breakdown
Demands large upfront payment
Vague timeline
No references or portfolio
Protecting Your Budget
1. Detailed written contract specifying scope 2. Fixed-price vs. cost-plus understanding 3. Change order process defined 4. Payment schedule tied to milestones 5. Contingency held separately
When to Adjust Your Budget
Scale Back If:
Quotes exceed budget by 50%+
Contingency would be eliminated
Financing isn't comfortable
Timeline doesn't work
Ways to Reduce Scope:
Phase the project over time
Choose one room vs. multiple
Select different finish levels
Maintain existing layout
Consider Increasing If:
Discovery issues require more work
Value-adding upgrades available
Financing terms favorable
Market timing right
Real Budget Examples
Example 1: Kitchen Renovation
Initial Vision: Complete gut renovation
Initial Budget: $50,000
Quote Reality:
Custom cabinets: $25,000
Countertops: $8,000
Appliances: $8,000
Labour: $15,000
Electrical/plumbing: $5,000
Flooring: $4,000
Backsplash: $3,000
Total: $68,000
Adjustment:
Semi-custom cabinets: $18,000 (saved $7,000)
Keep existing appliances: $0 (saved $8,000)
Revised Total: $53,000
Example 2: Basement Development
Goal: Rec room, bathroom, bedroom
Budget: $65,000
Final Costs:
Framing/drywall: $15,000
Electrical/plumbing: $12,000
HVAC: $5,000
Flooring: $8,000
Bathroom: $12,000
Finishing: $8,000
Permits/contingency: $5,000
Total: $65,000 ✓
Ready to Plan Your Budget?
Get accurate pricing for your specific project:
Contact us for a free consultation
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Learn more about our renovation services and process to understand how we deliver projects on budget.