Saving Money on a Remodel Starts With the Budget and the Plan

Saving money on a remodel means setting the budget before design, planning in phases, avoiding changes during construction and checking rebates that still exist, and the federal energy-efficient home improvement credit covered improvements only through December 31, 2025. Ask each contractor to confirm which of these steps fit your project.

Why does the budget come before the design?

The Home Energy book says to set your budget before you begin to design and to tell your designer to work within it. It says that during the design phase it is a good idea to pay a contractor to do a preliminary cost estimate, which helps determine whether you are close to your budget and encourages open discussion of costs and options. Ask a contractor what a paid preliminary estimate covers and what it costs before you finish the design.

Can planning in phases save money?

The book gives an example of how master planning can save you money and headaches, describing a family that remodeled a kitchen and later found the stove was in the perfect place for a doorway to a family room addition. Ask your designer to sketch the later phases before you commit to the first one.

What do changes during construction do to the cost?

The book says that making changes during construction is a surefire way to extend the length of your project and increase its cost, and that you should trust the design and avoid last-minute changes. Ask the contractor which selections must be final before demolition starts and what a later change would add.

Which rebates and programs still apply?

The Department of Energy says its Home Energy Rebates Program, which includes the HOMES and HEEHR programs, offers rebates that can help save money on select home improvement projects. It says the rebates are available in select states and that you should contact your State or Territory Energy Office for the status and eligibility requirements. ENERGY STAR’s rebate finder lets you find rebates and special offers on certified products near you by entering your zip code. Ask your state energy office and your utility which programs are open, and ask the contractor whether the products you plan qualify.

What happened to the federal home improvement credit?

The IRS says that if you made qualified energy-efficient improvements to your home after January 1, 2023, you may have qualified for a tax credit of up to $3,200, and that you could claim the credit for improvements made through December 31, 2025. It says that from 2023 the credit equaled 30 percent of certain qualified expenses, with limits on the annual credit and on the credit for certain types of expenses. Ask a tax professional whether any improvement you finished in 2025 still qualifies, and do not plan a 2026 project around the credit.

What should you ask before you start?

1. Ask a contractor for a paid preliminary estimate before the design is final.
2. Request a phased plan that shows later rooms.
3. Confirm which selections are locked before demolition.
4. Contact your State or Territory Energy Office for the current status of each program.
5. Ask a tax professional about any improvement finished in 2025.

Compare Bids Against the Same Budget

Write your budget and phases on one page, read more in our costs and budgeting guides, and give every contractor the same page so the bids compare.