Setting a home remodeling budget can feel overwhelming when you discover how widely costs vary. So why is there such a range? Contractors take many factors into account, and labor is often the bulk of the cost. A single handyman may do the job for less, but expect it to take longer than a contractor working with several trade partners. A job done is also different from a job done well. Experience adds value, and it can add cost too.

You may be comfortable saving on items like carpentry and painting, while paying top dollar for professional plumbing and quality tile work. It never hurts to get several quotes, ask for referrals and read reviews. Always make sure your quotes compare the same scope.

The other major cost is finish materials. You might find an acceptable tile for under a dollar per square foot, then fall in love with one at $5 per square foot. Over 1,000 square feet, you can see how quickly material costs add up.

Price each project and prioritize

The best way to build your budget is to list the projects you want, price them individually, get contractor bids for each, and shop for the materials that create the look you want. Then rank the projects by priority and create a detailed budget for the one you want to complete first.

Decide how much to spend

Consider the effect on property value. Even if you plan to stay for years, it may not make sense to spend $50,000 on a remodel that only adds $10,000 in value. Separate what your property needs from what you want, and prioritize the wants.

How you pay matters too. If you are paying cash, it may be worth including more of your wants. If you are financing or using a home equity line, consider sticking to needs, so you aren't carrying extra debt if circumstances change. If you plan to borrow, make sure the monthly payment fits comfortably in your budget. Bonus points if you can save first and pay in cash.

Set aside money for the unexpected

Include a reserve for things hidden behind the walls: rotten wood, rusting plumbing, old electrical wiring and more. You don't want to be hit with these costs mid-project, face delays, or settle for lower-quality finishes after all the work you put into planning your space. Planning ahead is the best way to stick to a budget and make your renovation a successful, pleasant experience.