This Business Method Can Help You Set a Home Renovation Budget
While updating, upgrading, and reimagining your home can transform it into your dream home, the logistics involved can be daunting, even if you have a general contractor managing the project for you. One of the biggest challenges is setting your budget—unless you have an unlimited budget (lucky you!), determining what a home renovation will involve based on what you can afford is a key aspect of your plan.
It’s also one of the most confusing. When budgeting reality bumps up against your dream home fantasy, figuring out what to remove from the project can be difficult because of the emotional aspects involved—everything can seem equally necessary when you’re imagining your future life in the home. In order to pare things down in a coherent and rational way, take a page from business school experts and use the time-tested MoSCoW Method.
What is the MoSCoW method?
The MoSCoW method was innovated by software developer Dai Clegg in the 1990s as a way to prioritize components of a project in order to stay on schedule and within budget. Although it was initially envisioned as a software development tool (and more widely as a tool for managing business projects in general), it’s malleable enough that it can be ideal for varied circumstances—including getting control of a home renovation project.
The method involves breaking all the aspects of your project into four buckets, represented by the letters M, S, C, and W (the Os are just there to make the name more readable). The categories are:
Must-haves. These are aspects of the project that are non-negotiable and mandatory.
Should-haves. These are parts of the project that aren’t absolutely necessary, but are relatively important.
Could-haves. These are smaller details that can easily be removed from the project or added in later if budget allows.
Won’t haves. These are aspects of the project that aren’t under consideration at all.
The simplicity of the MoSCoW method is its main strength—it’s easy to whip your home reno budget into shape in a short time by plopping everything into the relevant bucket.
Using MoSCoW to plan a home renovation project
When you’re planning out your home renovation, start dropping each aspect into a bucket as you go:
Things that absolutely have to be done are Must Haves. For example, if part of your renovation is replacing a leaking roof, that’s a Must Have—you have no choice, so that cost is baked into your budget from the get-go.
Major components of the project that aren’t absolutely necessary fall into the Should 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 the renovation—but you could leave them in place, or try to refinish them instead of replacing them. These would be the last parts of your project that you remove or downgrade.
Grace notes and luxuries go into the Could Have bucket and held there pending how the budget plays out. For example, maybe you’d like your new flooring to have radiant heating. That’s nice, but not an absolute necessity. If money opens up later in the planning, you can toss it in.
Finally, there’s the Won’t Have bucket. This might seem like an unnecessary step, since anything not already sorted into a bucket could be considered a Won’t Have. But the exercise of specifically labeling it as a Won’t Have is useful because it brings clarity to your priorities. If you find more budget later, you’ve already prioritized the Could Haves as more deserving of rescue. Won’t Haves aren’t necessarily things you’ll never do—they’re just things you’re not doing now. For example, maybe your HVAC system is a little old and you’re thinking it will need to be replaced in the next few years—but not at this moment, because you’re spending your money on all these other projects. So you put that into the Won’t Have bucket because you know you’ll be returning to it in the future.
Once you’ve done an initial categorization of your home renovation, you can start crunching numbers to see if changes are necessary or desired. Maybe you decide, on reflection, that a Should Have is really a Must Have, or vice versa. And if your budget can’t deliver on every priority, you can shift some things into the Could Have bucket and hold them in reserve for the future.
Any successful home renovation is as much about planning and prioritization as it is about budget and schedule management, and the MoSCoW Method can help ensure your project is on track before anyone touches a power tool.