August 1, 2025
Loans

How High Earners Decide Between Loans, Savings, And Credit For Big Renovations


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Many homeowners upgrade their homes as rooms get damaged or need renovations, but most home improvements get expensive in a hurry. A high earner recently told Reddit that fixing up the basement will cost between $150,000 and $200,000.

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Most people don’t have that type of money sitting in their savings account. Loans, lines of credit, and assets are some of the resources you can use to raise the necessary funds, but each person has a different financial situation. Many people left comments on the post explaining how they raised funds and which funding source makes the most sense.

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One of the top comments came from a Redditor who saved a chunk of their home improvement costs and paid the rest through cash flow over the course of the project. Not financing home improvements will save the most money, but that’s not feasible for everyone.

Even if you put some money down, you prolong borrowing money against your home to fund the costs. Knowing how much a home renovation will cost in advance  can help you gauge how much money you should save leading up to the project.

It’s also possible to start a renovation with some of the money and gradually save money as you go. For instance, if a home renovation costs $25,000, and you only have $15,000, you can get started and build up to the remaining $10,000 with each paycheck. This route isn’t feasible for everyone. It ultimately depends on how long the project will take and how soon you can raise the necessary funds.

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Another top commenter suggested waiting until you have enough cash to fund home improvements without needing a loan. While this model isn’t feasible for emergencies like a leaking roof, it is viable for cosmetic and lifestyle improvements that aren’t essential.

Prolonging home improvements gives you more time to save money. If you have some of your funds in the stock market, prolonging home improvements also gives your assets more time to grow.



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