renovations went completely over budget...floating expenses on a credit card now

[Anonymous]

my renovation project went completely off target. so right now i am in floating the renovation costs onto a credit card and it's going to total about $20,000. i had signed up for a 0% APR 15 month credit card and will transfer that debt to the 0% APR card and aim to pay it off in 15 months, which is ambitious. It's going to mean shelling out $1333 a month to pay down this debt.

how many of you experience nightmare renovations where you simply run out of cash but need to get the job done? i have nowhere else to turn but to float this debt.

[Anonymous]

Anonymous wrote:my renovation project went completely off target. so right now i am in floating the renovation costs onto a credit card and it's going to total about $20,000. i had signed up for a 0% APR 15 month credit card and will transfer that debt to the 0% APR card and aim to pay it off in 15 months, which is ambitious. It's going to mean shelling out $1333 a month to pay down this debt.

how many of you experience nightmare renovations where you simply run out of cash but need to get the job done? i have nowhere else to turn but to float this debt.

Is 20K the overrun? If so, by what percentage did the project overrun? I can understand 10-15%. Anything beyond that is bad planning/proj. management on your part of the general contractor's..

[Anonymous]

Can you get some sort of second job to help pay it down? Weekend babysitting? Dog sitting? Retail?

[Anonymous]

Every single reno project I've done has gone over budget, but it has always been my own doing in terms of additional upgrades.

Frankly I've never gone into a home reno on such a tight budget. I dont run all my cash down for a renovation. That's asking for trouble and spending money you just arent financially sound enough to spend. If you are using all your cash just to stay on budget with no emergency cash savings left after your on budget project is complete, thats just dumb.

[Anonymous]

We had a similar situation. I was planning a renovation on an old house with some flaws. Then we had some damage and were worried the situation would deteriorate if we did not begin the project soon. We tapped out our savings for the project and combined it with a personal loan from our bank.

I acted as my own general contractor and worked hard to control costs.

I don't think ours was a smart move; in retrospect we might have saved longer and bought a house that didn't need the work. But we figured that in the worst case scenario we could make payments on the personal loan (we set it up for 330/m over several years) and in the best case scenario we could refinance after the work was complete and pay it off speedily. (We bought the house for cheap, in an improving neighborhood, and our project stood to improve house value.)

We are about to refinance and pay the entire project off. We still have significant home equity, so in terms of our long-term financial picture it was a win. It was just a really risky "win."

[Anonymous]

Regarding strategy ... it may be that the floating credit card plan is cheapest. Therefore best. Can you mange the big payment? If so, maybe you can endure for a year and then you will just be free of it. You can remind yourself that you really enjoy your improvements and that a year of austerity was the price of new counters, or the sweet assurance that bad wiring is not plotting to kill you.

If there's no way to keep up with those payments, maybe moving from once from the first 15-month card to a second 15-month card will solve the problem. Or maybe you can get a reasonable installment loan, set to pay down at brisk but not exhausting pace, and autopilot your way back to zero? Meanwhile put a little back in emergency savings each month to develop a shred of sanity and security.

If you are otherwise in good financial shape, you can take out the 20k. Don't feel too horrid. If you have a lot of other debts you need to look more carefully at your strategy.

[Anonymous]

I would never have done what you did OP. I would have factored in some percentage of over run and made sure I had cash on hand once completed.

Debt is a noose around your neck. I hope for your sake you set up your credit card payments online to automatically have them paid on time. One fuck up in payment can and will cause you a lot of hurt.

[Anonymous]

PP has a good point. Automatic payments every month are must so that you don't trigger the "regular" interest rate.

[Anonymous]

20,000 on a credit card? I find it really hard to believe you didn't see that coming, and if you're in a place where you needed to put it on a CC, you probably had no business doing expensive renos to begin with.

I would be feeling sick to my stomach if I was you. What a mess.

[Anonymous]

If OP unearthed something totally unforeseen while doing a renovation, I can see an additional 20K being needed, easy.

We renovated a fixer-upper and had planned for 100K, which then ballooned to 200K due to issues we discovered AND upgrades we decided to do along the way. Luckily, we had the funds for it, but this is to illustrate how quickly costs can increase.

[Anonymous]

Dog sitting and dog walking! You can make $30-40 a day per dog. My friend has 6 staying with him over this holiday weekend. It's a great way to bring in extra cash since I assume you won't be taking many weekend vacations for the time being.

[Anonymous]

Finish reno then investigate a HELOC. Credit Unions will go up to 100%. The interest rate will be cheaper and interest paid will be deductible since you borrowed the money to pay for primary residence. But get the debt off the CC ASAP.

[Anonymous]

Anonymous wrote:
If OP unearthed something totally unforeseen while doing a renovation, I can see an additional 20K being needed, easy.

We renovated a fixer-upper and had planned for 100K, which then ballooned to 200K due to issues we discovered AND upgrades we decided to do along the way. Luckily, we had the funds for it, but this is to illustrate how quickly costs can increase.

Contractor should've paid at least half of this. You got raped by the contractor.

[Anonymous]

DOT's credit union has a HELOC that goes up to 95% LTV and they are pleasant to work with. I'd do that before a CC. You also need to get YNAB and get ruthless with your budget until this is over. Good luck!

[Anonymous]

Anonymous wrote:

Anonymous wrote:
If OP unearthed something totally unforeseen while doing a renovation, I can see an additional 20K being needed, easy.

We renovated a fixer-upper and had planned for 100K, which then ballooned to 200K due to issues we discovered AND upgrades we decided to do along the way. Luckily, we had the funds for it, but this is to illustrate how quickly costs can increase.

Contractor should've paid at least half of this. You got raped by the contractor.

? What a weird comment. We changed what was written in the contract, silly.