In recent years, following the credit crunch, increasing numbers of people have used their savings to fund home repairs and improvements. Research from the Halifax showed that approximately 80 per cent of people embarking on a home improvement project paid for it entirely or in part with their own savings.
Using savings to fund home improvements can be a smart move when financial returns in savings accounts and other investments are low or uncertain. Home improvements can add to the value of your property and/or help reduce your monthly energy bills, providing a much better return than a low-interest savings account.
More recent studies from the National Home Improvement Show revealed that 62 per cent of new home improvements are funded by savings.
Key points to remember when funding home improvements from your savings include:
- Only make changes and improvements that you can afford
- Do all that you can to stick to strict budgets, don’t be too ambitious
- Consider whether the interest your earning is better or worse than the potential bill savings from improvements such as double glazing or insulation
- Don’t use all your savings, you might want to keep some for contingencies