Kitchen Renovations

Dos and don'ts for paying for a new kitchen

Want a new kitchen but not sure how you ought to pay for it? Fixing up your kitchen can be quite costly. Maybe you just want to make some sorely needed repairs. Decide in advance what changes you will make.

Check out all your options for how to cover the expenses for your kitchen project. The most obvious choices are:

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  1. Saving up the money in advance
  2. Getting a second job to earn extra money for the remodel
  3. Obtaining some type of loan

Pinch your Pennies

One simple way to pay for your kitchen, or at least part of it, is by saving your change every day. Most people purchase something every day - gas, groceries, lunch or coffee. Place all of your leftover change in a candy jar or tin and watch it add up. When the container is full, take it to your banking institution and have it placed in the counting machine. Then, have the total amount deposited into a special account for your kitchen project. It is amazing how quickly your daily change multiplies.

Another way to jump-start saving for the kitchen is to have an amount taken out of your paycheck automatically and placed into a designated account for the project. This method assures that a chunk of money is put aside weekly, biweekly or monthly specifically for your project.

Put in the Hours

Getting a second job for a defined period of time (say, 6 months) and banking 100 percent of the money for the remodel can be a smart method to pay for the kitchen, according to financial experts. Even mowing lawns or providing childcare on a weekly basis can provide enough money to pay for a remodeling project.

Borrow Financing

In terms of second mortgages, home improvement loans and home equity lines of credit, it is best to avoid them if possible. However, if you come to the conclusion that the only way to do the remodel is by getting a loan, borrow the least amount of money to get the job done.

There are some definite pitfalls to avoid when borrowing money for home improvements:

  • High interest rates: Be sure to check various lending institutions for their rates for second mortgages.
  • Deferred first payments: Don't delay repaying your loan because you will most likely be paying more interest and will not get the bill paid off as quickly by doing so.
  • Miscellaneous fees: Most lending institutions throw extra fees into the loan that go into the banker's pocket. Inquire about the specific fees. You can even insist they be taken off of the loan.
  • Mortgage brokers: Avoid them. They are known for numerous hidden, extraneous fees and high interest rates.

Paying for your new kitchen does not necessarily mean you have to borrow money and assume another monthly bill. Consider saving money in advance or working a second job for a short time before you sign on the dotted line for a loan. You stand to profit in more ways than one if you thoughtfully approach your remodeling project.

By Rita Chaney

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