Fund Your Home Remodel with a Savings Account

**Our honesty policy: This post may contain affiliate links and I may be compensated if you make a purchase at no extra cost to you. Some are, some aren't--I do some comparison shopping. The important thing is you will know exactly what we are talking about. Drop a note/comment if you have any questions on the products as these are materials and tools we use on our own projects.

A screenshot of Capital 360’s goal tracker. Set a goal, make automatic payments, hit your goal and start remodeling!

All this talk of remodels, inspirational ideas, and New Year’s goals…how do we pay for this stuff? This isn’t a financial blog, but there’s no getting around it–doing stuff to a home takes money. Saving up for a remodel can be a challenge. Writing a check for a big purchase might not just be daunting…the money may not be there yet!

First things first though, you have to have a goal.

What do you want to do and what does it take to get there? Once you have this answered, you can go about finding out how much it is going to cost. We need to have a final number in order to figure out how much we need to save and this may determine how long it takes to save up.

For example, let’s say we found out it will take $5,000 to remodel a bathroom next year (January of 2020). Divide $5000 by 12 months and we find out we need to save $416.67 a month to turn that dream bathroom into reality.

Perhaps you find out your budget is a little tight and you have to extend out the schedule to accommodate. That’s okay. The point is to know your number and make it realistic for your situation.

Automate your savings.

You might get lucky and have a windfall. Or maybe your company is giving out extraordinary large bonuses this year. Surprise money is definitely a painless way funding a remodel. However, the definition of “surprise” is that you can’t really count on it. So the rest of us will have to save.

One way our family has gone about large purchases is automatically putting a little aside every month. When the time comes, the money is sitting there waiting to go.

We have a few banking accounts for various reasons. Our TCF account is for our local banking. No fees and brick and mortar so we can walk in to a friendly face. USAA was our starter savings account because it had what we felt was a decent savings rate at the time. It also is an easy transfer place for our renters.

Then we learned about high interest savings accounts online. More recently (as in at least six years ago) Capital 360 offered a screaming great interest rate in comparison to what we had in the other accounts. Even more useful, it gave us the ability to separate out up to twenty-five different savings buckets under one checking account. Want to fund that bathroom remodel? How about that vacation in a few months? House insurance? You name it, you can set up a separate account under one umbrella to squirrel away money on a schedule that meets your needs. If the money isn’t there, it will not overdraft the other account. It will wait until the money is there.

Here are the different settings you select when setting up one of possibly many savings accounts.

The whole goal is to make your life easier so that you don’t have to sit there and think about it every month. Instead the money is quietly stashed away and ready to go once it is time to get started.

You get to decide how often to stash as well as what day(s) of the month.

We are creatures of habit and if something is on autopilot you are less likely to change it. Once you have it set up you don’t have to think about it either.

Separate dedicated accounts work so well psychologically. If an account has a label such as “New Bathroom” you are less likely to raid it when you see a new pair of shoes you must have this instant. Instead you might think about the picture of the bathroom you have in your Pinterest board and realize a bathroom might last longer than that pair of shoes. In the least, you might take that money from a different pot.

Digging a little deeper, you know how much you have to go for any certain goal. If you have one big pot of money you have to manually having to subtract different expenses. After about five expenses I’m going to lose track and at this point we have at least a dozen accounts. Dedicated pots of money gives you the exact number staring you in the face–RIGHT NOW.

If you have one account for all your savings you might also think you have more than you do. Have $15,000? What’s a pair of shoes? Or a $3,000 vacation? You have the money, right? Not only that, but you might even think you are saving more than you really are. Having established individual savings accounts keeps you from going insane.

The following is a link to opening a Capital 360 account:

Check it out for yourself here.

Yes, it is an affiliate link, but at this time I don’t see any incentive offers out there and this link provides you with $25 if you open a savings account. $25 is better than a sharp stick in the eye and can help you jump start your savings even if it is just a little drop in the bucket for a $5000 remodel. I would also recommend looking around at other online banks to see if their percentages are higher and if they have the ability to have multiple savings accounts under one umbrella. I only feel comfortable recommending what I currently use but there could be better deals out there at this time.

I’ve been happy, but I haven’t done much with it other than automating saving every month. Once it is time to use it, I transfer it to one of the other accounts. Transfers are brain dead simple too.

Capital 360 also has a couple tools such as calculating how much you need to save weekly/monthly/etc. to get to your goal. Once set, it also tracks the progress of your goal.

Capital 360 offers tools to calculate what you need to save to achieve your goal.

Again, the goal setting calculator gives you different options to fit your lifestyle. Do you want to save weekly or monthly? They will calculate it for you!

You work hard for your money and you want it to go as far as possible. Placing your remodeling fund any high interest savings account makes all those little Benjamins work harder for you.*

*You should definitely have an emergency fund before heading into more of a nice-to-have-remodel fund. If you do, great! Here is a related thought for you: if you do not have your emergency fund stashed in a high interest savings account, like we didn’t years ago, it is worth investigating to see if it is a better fit for your situation. Parking your money in a money making account is better then an account that gives you a zero (or close to it) return.