This Business Method Will Help You Budget for Home Renovations
While updating, upgrading, and reimagining your home can turn it into your dream home, the logistics involved can be challenging, even if you have a general contractor managing the project for you. One of the biggest challenges is setting a budget —unless you have an unlimited budget (lucky you!), determining what a home renovation will include based on what you can afford is a key aspect of your plan.
It’s also one of the most confusing. When the reality of budgeting collides with your dream of a dream home, figuring out what to cut from a project can be difficult because of the emotional aspects involved—everything can feel equally necessary when you’re imagining your future life in the home. To cut everything down consistently and rationally, take a cue from the business school experts and use the time-tested MoSCoW method.
What is the MoSCoW method?
The MoSCoW method was invented by software developer Dai Clegg in the 1990s as a way to prioritize project components to stay on schedule and on budget. Although it was originally conceived as a software development tool (and more broadly as a tool for managing business projects in general), it is flexible enough to be ideal for a variety of circumstances, including gaining control of a home renovation project.
The method involves breaking down all aspects of your project into four segments, represented by the letters M, S, C, and W (the O’s are there only to make the name more readable). The categories are:
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Mandatory. These are aspects of the project that are non-negotiable and mandatory.
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Essentials: These are parts of the project that are not absolutely necessary, but are relatively important.
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Possible: These are small details that can be easily removed from the project or added later if the budget allows.
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They won’t have. These are the aspects of the project that are not considered at all.
The simplicity of the MoSCoW method is its main advantage: it allows you to quickly and easily put your home renovation budget in order, distributing everything into the appropriate sections.
Using MoSCoW to Plan a Home Renovation Project
When planning your home renovation, start writing each aspect down in a bucket as you progress:
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Something that absolutely has to be done is a Must Have . For example, if part of your renovation is replacing a leaky roof , it’s a Must Have – you don’t have a choice, so the cost is built into your budget from the start.
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Major project components that aren’t absolutely necessary fall into the “Must Have” bucket. If your old hardwood floors are worn but serviceable, replacing them is a big part of what you want to get out of your renovation, but you may want to leave them in place or try refinishing them instead of replacing them. These will be the last parts of your project that you remove or downgrade.
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Gratitude and luxury items go into the “ Can Have” bucket and sit there waiting for your budget to come together. For example, you might want your new floor to have underfloor heating. That’s nice, but not an absolute necessity. If money becomes available later in the planning process, you can add it there.
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Finally, there’s the “Don’t Want To Have” bucket. This may seem like an unnecessary step, since anything that isn’t already sorted into buckets can be considered a “Don’t Want To Have.” But the exercise of specifically labeling it as a “Don’t Want To Have” is helpful because it brings clarity to your priorities. If you find more budget later, you’ve already prioritized the “Can Have” items as more worth saving. “Don’t Want To Have” items aren’t necessarily things you’ll never do — they’re just things you’re not doing right now . For example, maybe your HVAC system is a little old , and you think it’ll need to be replaced in the next few years, but not right now because you’re spending your money on all these other projects. So you put it in the “Don’t Want To Have” bucket because you know you’ll come back to it in the future.
Once you’ve done the initial categorization of your home renovations, you can start crunching the numbers to see if changes are necessary or nice to have. You might decide, after some thought, that a Should Have is actually a Must Have, or vice versa. And if your budget can’t accommodate all of the priorities, you can move some things into the Could Have bucket and keep them in reserve for later.
Any successful home renovation is as much about planning and prioritizing as it is about managing your budget and schedule, and the MoSCoW method can help ensure your project is on schedule before anyone touches a power tool.