Major Home Improvements Demand More Financial Planning Than Most Homeowners Anticipate

Major home improvements often come with high project estimates and unexpected renovation costs, so it is important to be prepared and have a financial plan in place. Some of the key reasons behind solid financial planning for a home renovation include timeline changes, increased material costs, maintaining liquid cash reserves, and more. 

A 2026 report from RubyHome states that approximately 54% of homeowners completed some sort of renovation project in 2024. Despite the cost of major projects, it is clear that homeowners still want to take steps to customize their spaces to exactly what they envision.

What Is the Most Popular Home Improvement? 

According to Opendoor, the most popular home improvements in 2026 are minor kitchen remodels and bathroom remodels. Kitchens and bathrooms are some of the most high-traffic areas in homes, so keeping them accessible and up-to-date is essential. 

Some of the key features influencing home renovations include smart home integration and sustainability, as well as designs for homeowners who intend to age in place. 

What Home Improvements Will Add the Most Value? 

Even if you are not planning to sell your home in the near future, it is important to plan improvements around how they will add to your home value. Some of the renovations that will add the most to your appraisal price include: 

• Interior Paint: Updating to modern colors can instantly brighten the inside of the home
• New Appliances: Sleek, stainless steel appliances that are energy-efficient will increase value while also saving money
• Flooring Deep Clean: Scrub the grout between tiles, polish wood floors, or steam clean the carpets
• Front Yard Refresh: A new coat of paint on the exterior of the home and reimagining the foliage will add curb appeal

Why Do Major Home Improvements Need Financial Planning?

Extensive home improvements can be incredibly expensive, especially for the average homeowner with a mortgage and other expenses. Here are some of the main reasons why your bill may be higher than you expect. 

Different Project Stages

A complex project works better when turned into a series of stages. Installing solar panels, for example, might first involve breaking down installation expenses, then determining the part of the roof that works best for the solar panels, followed by the actual installation. 

Unexpected Timeline Changes 

Extended timelines ultimately end up costing more. Inclement weather may set construction back for days or weeks. Materials might show up later than expected. Overall, these add up to create more labor, which adds up financially. 

Understanding Tax Implications

A major remodel does not mean that you will automatically pay fewer taxes. It could benefit you down the road, but there usually isn’t an immediate tax benefit, such as the write-off for mortgage interest expense. 

If the remodel needs to happen for medical reasons, such as creating accessibility for an individual with a mobility aid, then you may be able to write off some of the cost as medical expenses. Talk to your tax preparer if you are unsure what qualifies. 

Fluctuating Costs of Materials 

The cost of materials can vary based on where you get them from and the time of year. Global trade may seem like a distant conflict, but it can have a direct effect on the total cost of your renovation project. Try to buy materials when they are on sale, and buy in bulk if your budget allows. 

Maintaining Liquid Assets

Always keep extra funds available in case of unexpected costs or emergencies. You may find yourself with a higher bill than you originally anticipated, or repairs that were not seen in the first project estimate. Make sure you have enough cash to pay your regular bills and expenses as well. 

Calculating Return on Investment (ROI)

It is important to try to calculate your return on investment (ROI) before the project begins. If the ROI is too low, then it may not make sense to continue. Look for ways to cut back on expenses to achieve higher ROI. 

Frequently Asked Questions 

Are There Any Ways to Save on Home Renovation Bills? 

Yes. If you are experienced enough, you can work on some of the renovation yourself. Remember to take all appropriate safety measures and not to cut corners.

You can also opt for lower-cost materials. Rather than granite or marble for a kitchen countertop renovation, choose Silestone or a butcher block surface instead. 

Look for items secondhand or on sale as well. If you want an antique vanity for your bathroom, for instance, shop around and wait for a good opportunity, rather than overpaying for the first one that you encounter. 

What Is the Most Expensive Part of a Home to Remodel? 

Generally, a kitchen remodel is the most expensive. It involves many moving parts and a team of experts to successfully complete the project. Some of the most expensive elements of a kitchen renovation include: 

• Cabinetry 
• Appliances
• Countertops

There are also major systems involved in updating a kitchen, such as: 

• Electricity
• Plumbing
• Gas
• HVAC

Bathrooms are also more expensive to renovate than other parts of the house. Similar to kitchens, the projects often involve navigating complex electrical and plumbing systems. 

Which Upgrades Are Often a Waste of Money? 

While an upgrade may seem appealing to you, it sometimes does not have the return on investment you originally envisioned. A swimming pool, for example, can be a wonderful addition to your backyard space. A prospective buyer, however, may see it as something that raises their power bill and requires expensive maintenance. 

Another upgrade that may lower home value is turning a spare bedroom into a walk-in closet or a dedicated media space. Potential buyers often value more space that they can choose to use how they see fit, especially for growing families. 

Learn More About Home Renovation Budgeting

Major home improvements often require more financial planning than you may initially believe. Use this guide to ensure that you have the details ironed out before you break ground or tear down the first wall on your next home renovation. 

Are you ready to transform your home into the property of your dreams? Take a look around our website for more ideas and inspiration, as well as financial tips for homeowners.