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How to Pay for Home Renovations: Cash-Only Edition

YNAB Money Snapshots

Wondering how to pay for home renovations? A lot of people are making the decision to skip moving in favor of renovating their existing home to better suit their lives, but the cost can make that project an intimidating prospect.

If you’re looking around at your neighbors’ new upgrades and wondering, “How on earth do they afford it?” this sneak peak into one YNAB user’s home renovation journey might give you some ideas and inspiration on starting your own.

See how this woman making $104,000 a year uses her money to cash flow a home renovation.


  • Name: L
  • Age: 37
  • Location: An island somewhere 🌴
  • Job: Professional
  • Living situation: I live with my partner, M but sadly I have not convinced him to use YNAB yet.

Income: $104,000

Savings: $95,000

  • This is kept in investment accounts, and built up since I started using YNAB in 2017!

Debt: $0

  • Our fixer-upper home was purchased with cash (the home was not actually mortgageable due to the problems with the roof, windows, and doors, so cash was the only option).
  • I paid off all my student loans (approximately $22,000) since starting with YNAB. I had just been making the minimum payment, and I finished paying it off at the beginning of 2019 because I was sick of looking at the balance. Getting out of debt first made it much easier to find the cash to pay for a home renovation!

My Story

I started using YNAB in 2017 because I was looking for a budgeting tool that would hold me accountable and make me understand where my money was going. I watched all of the videos and it took a bit of time to trust my budget, but I am so happy that I kept with it.

I like to restart my budget on January 1 of each year to re-evaluate how I spend money from year to year. I am still trying to get to a 50% savings rate while renovating this home. I really don’t spend very much on “fun” stuff. I bought a new bicycle this year, but I justified it because I use it to commute to work 3 days a week.

Home Renovation Project

We purchased a home a few years ago with a lot of deferred maintenance. Real estate here is very limited (and thus VERY expensive), so the only option was to buy a fixer-upper and get started on some home improvements.  The home had leaky windows, missing doors, a blown-out skylight, lots of rotting wood, a patio door that was about to break, no working kitchen appliances, a rodent issue, etc.

We moved in right away, even though we didn’t have hot water for a long time, and we got to work on our new renovation project.

What We Did

First, we installed two exterior doors, sanded and refinished the top floor, and rebuilt the ground floor, including all vertical supports and replacing all windows and walls and siding that was rotting.

Then, we installed new built-ins in the kitchen for more storage, bought a new fridge and stove, installed a new gas tank and gas lines, added a new rain shower, new bedroom doors, painted the upstairs, and installed drywall to keep the rodents out. We tackled our biggest priorities first.

While we initially hired people to do a few jobs, they did less-than-adequate work and so we do it all ourselves now—which has really reduced labor costs.

What’s Still Left

We still have a long list of home remodeling projects to finish:

  • Purchase a dishwasher
  • Install cabinet fronts
  • Get new doors for the other two doors that lead outside
  • Build a second bathroom, so there is one on the main floor
  • Install a patio door
  • Railings for the patio
  • Build a deck
  • Do landscaping (including terracing a hill)
  • Solar system

We are taking our time and we expect this entire renovation really to never be finished, but we think it will be mostly finished in 5-7 years. I try to get a lot of joy out of the small things, like the fact that we have hot water, our Flic button that we use to turn off the lights and lock the doors at night, and our kitchen LED lights come on automatically at 5pm and they can change colors. I also love my rain shower!

How to Pay for Home Renovations

Budgeting for projects has been essential to figuring out how to pay for home renovations without accruing debt. I typically add our next projects as a category in our budget and then save for those until we have the money.

So for example, I added categories for a dishwasher and two new doors, and then we’ll probably start budgeting for solar panels and battery back up.

Add home renovation projects as category groups in your budget.
Add home renovation projects as category groups in your budget.

I am always trying to think of ways to reduce renovation costs. M’s income can vary a lot from month to month, so that can be a little stressful. Everything we install in our house has been purchased after doing a tremendous amount of research and evaluating the pros and cons for energy and electricity consumption. For example, we determined a gas hot water heater would be better in the long run given the high cost of electricity in our area. M installed a new buried gas tank and ran new gas lines.

I am more in charge of the outside areas and I am trying to grow more food, so we can be more sustainable. This will involve using gray water, so our plants can survive the dry season. Balancing upfront costs with potential longterm savings has required more research, but should ultimately work in our favor.

How YNAB Has Helped

I like using YNAB because it helps me avoid making large purchases if I have not budgeted for them. I trust my budget and I know that even though my savings account has what looks to me like a lot of money, I know that those dollars have already been given jobs and I can’t just go spend them.

We do not use a separate remodeling budget for our home renovation, but after watching the video about it I think we should!

If you’re interested in starting a budget to help you figure out how to pay for home renovations, try a free YNAB trial to help you get started!

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How to Pay for Home Renovations: Cash-Only Edition