One big misconception some have when it comes to decorating is that you have to spend a lot on every piece you buy in order to have a nicely decorated space. This simply is not true. There are certain things to put more money into and others where you can get away with spending less. It is important to understand where to spend your money to get the most style and value out of each piece.
What to Spend More on
Polka Dots & Rosebuds Interiors
There are certain items in your home that you should absolutely spend more on, and look at them as investment pieces. Some examples of what to spend more on when decorating include but are not limited to upholstered pieces, dining tables, beds and mattresses, as well as flooring. These items and more are all very important pieces in your home and will get a lot of use. You want to find good style, comfort, durability, and functionality in all of these pieces.
Where you can Save
Polka Dots & Rosebuds Interiors
On the flip side, there are many items that you can spend less on while still making a fantastic impact on the overall look of a space. Art, accessories, and accent pieces are all good examples of where you can save money when decorating. By no means are we saying to completely skimp on these items, and if it is in your budget and you find any of these items and want to splurge, go for it! These are simply areas where you do not have to break the bank to make a great impression.
One of the biggest parts of decorating or re-decorating a space is budgeting. When you decide you would like to give a space in your home a refresh, it is important to sit down and decide what you are looking to spend before you start any sort of planning or shopping.
Prioritize
Polka Dots & Rosebuds Interiors
If your space needs a full re-do but your budget wont allow for that all at once, pick what is MOST important to update in the space. It can be frustrating when you know the space needs more than you can do all at once, but you will be much happier with the result if you take your time and start with the most important updates first.
Price Compare
Polka Dots & Rosebuds Interiors
Once you begin shopping, don't just go out and buy the first pieces you see and think will work. It can save you a lot in the long run if you shop around and price compare before diving into a large purchase. One easy way to go about this is to browse your favorite stores/sites for inspiration even if its on the pricier side. This way you can get ideas of what styles you like, then find similar pieces elsewhere if your budget does not allow you to splurge on those high end items.
One Room at a Time
Polka Dots & Rosebuds Interiors
One problem we see is people trying to tackle too much at once. If you feel multiple spaces in your home could use sprucing up or even complete overhauls, stick to one room at a time. It can be tempting to spread the budget you have over multiple rooms so you can see small improvements throughout your home. If you pool the money you have and pour it into one space at a time it will make a MUCH bigger impact and you will be glad you did.
Ohmigosh!I was flipping through the pages of Ballard Designs and ran across this beauty.This storage piece is a shoe & handbag lover’s dream!The best part is that you can add on to it.When you hit up the Memorial Day shoe sales this weekend, just keep enough room in the budget for this baby and you’ll be good to go!
Liz: “Any last tidbits of advice, ladies?” Melody: “Prioritize goals! Be patient when planning a project. Make sure the improvement s they want to do fit into their overall financial planning goals and their ability to resell their property. From what I’ve seen, converting an attic to a bedroom, finishing a basement or focusing on rooms with water like kitchens and baths yield the best return on investment for homeowners. Liz: “That is so true! Susie, last words of advice?” Susie: “On the commercial side, for a business owner who wants to buy their own building, I always recommend that they talk with an attorney and a CPA before buying. Small business owners especially don’t know the tax advantages or liabilities of buying a building. We, as bankers can’t advise them on how to structure things, so they need the guidance of these professionals.
“The SBA (Small Business Association) offers some financing programs for borrowers to work with a bank and put a small amount of money down to secure financing. I recommend these programs for small businesses to use if they don’t have a lot of money.” Liz: “How do they go about finding information on these programs?” Susie: “They need to talk to their banker. The SBA doesn’t lend the money- the bank lends the money and the SBA provides the guarantee. So talking to their banker can help them get started.”
Melody Townsend, CFP owns Townsend Financial Planning with offices in Mt Sterling and Lexington. Those initials behind her name stand for “Certified Financial Planner” which a special distinction that I will let her tell you all about! Melody’s office is fee only, so she doesn’t charge hefty investment commissions. You can get more info on her website www.townsendfinancialplanning.com or call her at 859.498.2020.
Susie McEuen has nearly 30 years in the banking industry and has the distinguished title of VP at Community Trust Bank in Lexington. She works with business owners throughout the state to secure financing for their needs. Susie also has a team of bankers ready to help with personal financing. She can be reached at 317.442.8944 (treasure this, as it is her direct line) or mceuensu@ctbi.com.
I encourage you to seek these ladies out if you have financial questions and needs!
Liz: “Do you have a ceiling amount for the loans you can provide?” Susie: “Sky’s the limit as long as the cash flow, equity and values of the borrower make sense. There is no minimum and no maximum. The loan just needs to makes sense.”
Liz: “Do your clients approach you with the plans to do re-design and re-modeling projects a lot?” Melody: “Not a lot, but I do have clients that when asked about goals for their future, they list an addition to their home or redecorating their home. So, we keep a separate pot of money to be the start for their remodeling plans. Some clients want to pay cash and others want to take out a loan as long as it doesn’t jeopardize their financial situation. “ Liz: “So which do you see more often- people wanting to pay cash or people wanting to apply for a loan? Melody: “Well, they’re in my office so I never know if they are just saying that they want to pay cash because they are talking to me or not. The big thing to remember is that if you are over 85% in loans on your house and the real estate market drops you probably won’t be able to get out of your house. I try to keep client from inching up to the full value of their home even though some banks will loan them that much.”
Hope you are liking what you read. The final installment will be posted tomorrow!
Liz: “Melody, is there a certain place you advise your clients to place money they are saving for a project to possibly gain interest?” Melody: “Typically, if you have a time frame that is less than 5 to 7 years you would not want to subject the money to market risk. So I would not say ‘Let’s go find this great stock or mutual fund to dump the money into.’ The market could just as easily go down as it could go up. I would recommend a money market account or a savings account, or possibly some short term CDs. They would need to make sure the maturity dates would come before the start date of the project. I suggest that savings be as automated as possible to help them get closer to their goal on time.
Liz: “Susie, Is there a certain type of loan that you typically direct business owners to?” Susie: “If it’s a pretty large project, I set up a construction line of credit for them to draw on and during the project time period they pay interest only then afterwards it flips to a fully amortized loan. The loan would likely be tied to the building as an asset. The bank won’t lock into a rate longer than 5 years because there is too much risk involved in it. As a bank, we need to really know what’s going on with that business so we continue to monitor the changes in the business and their cash flow. We stay involved through the length of the loan.”
Money is a topic of conversation between me and all of my clients on a regular basis. They need to know how much they can comfortably spend on a project and I need to know what that amount is so I can determine how to best allocate it for them. I pulled in two fabulous financial contacts- Melody Townsend, financial planner extraordinaire; and the banker who is giving money away, Susie McEuen- to share some insight on how to prepare for a redecorating project (at home or in your business). I've broken up the interview into 4 installments and will be posting them daily between now and Wednesday. I hope you get a nugget or two that can help you in determining your financial picture!
Liz Toombs, C.I.D.: “How far in advance do you recommend people start saving money or applying for a loan that they would need for a large re-design project?”
Melody Townsend, CFP: “For a remodeling project, I would think a homeowner would take out a second mortgage or a home equity line of credit with someone like Susie. If someone wants to start a redecorating project, the savings time period would depend on the project, in terms of how big it’s going to be. If, for example, they want to start this project in 2 years they would need to have a budget in mind and divide the budget over 24 months to know how much to save each month. The other option is to start saving tax returns or company bonuses. My suggestion would be to break it down into smaller chunks because people have an easier time looking at it as a monthly or per paycheck savings versus one large lump sum.”
Susie McEuen: “Whether the client needs money for a project on their home or in their business, they would need to do a budget [personal side] or projections [business side] to determine if they have the cash flow to cover the additional debt they would be taking on. They really need to work with their banker to determine if they can cover this extra debt. I like it when people come to me and say “I’ve got an idea- this is what I want to do. This is how much I think I’m going to spend.” I like to see a budget of what they want to spend. We verify income and look at what we can use as collateral. It depends on the size of the loan and whether it is personal or business loan, but we typically ask for 3 years of financials. My side can go pretty quickly depending on how prepared they are with the information I listed. For lease-hold improvements we want as much information as possible: who is doing the project, how they are going to get paid, etc. The loan amount really dictates how much information we require [on the business side]. On the personal side it is a little easier to get funds, but we do look at if the improvements are going to drastically change the value of the house. If they are going to spend $50,000 to add on a sunroom we make sure they will be getting dollar for dollar back out of the project.”
Liz: “If someone is planning a major project what is the best method for them to prepare financially? Do you recommend them pulling from their savings account, cashing in a CD, or applying for a home equity loan?”
Melody: “If they are going to do a major remodeling project, I would love to know their plans several years in advance so I can get them in a position that it wouldn’t impact them as much financially. I look at their goals and help them prioritize how important the project is in comparison to their other goals such as putting their kids through school or their retirement picture, and then I help them determine what they can safely spend. First, I want to make sure that they have a fully funded emergency fund AND have a will in place. If they are on safe ground with these things, then I advise them on where to get their funding. I never advise them to put the project expenses on a credit card or to pull from their retirement or emergency fund!
Susie: “I would sit down with them to determine the reason behind the project. On the business side, I want to know what their 3-5 year plan is. I also consider whether they lease or own the building, because if they lease we may need to consider getting the landlord involved. If they own a building and need to expand because of company growth, we look at historical business numbers to determine whether it makes sense to give them the money. The bank will ask them to put cash into the project, because we won’t give 100% financing. This helps us ensure that they are committed to the project. But it all goes back to projections: What is their gain by adding on additional square footage? We don’t want to see them do a remodel that doesn’t add value.”
