Are you part of the “HGTV Effect”?

renosAs the summer moves along, I find that my kids are watching more and more television. They usually love the outdoors, but the novelty of doing what you want, when you want, as only you can on summer vacation, is wearing a little thin. 

But much to my surprise, my kids aren’t tuning in to the Disney Channel, or getting their fix of music videos. Oh no. They have the dial set to HGTV and other home design stations. I’m not sure which is more disturbing/intriguing- that they watch these shows with such interest, or a recent comment from my ten-year-old about a well-constructed pergola he spotted when out for a walk.

I guess it’s educational, right?

Sweeping the nation

A recent report shows that home renovation spending in Canada climbed to $68 billion last year, breaking the previous year’s record of $63 billion. And consider this: new home purchases only totalled $20 billion. In fact, home renovation dollars are so substantial to the economy, that they accounted for 3.4 percent of the GDP in 2014. It’s clearly not just my kids who are tuning in.

There are a variety of factors influencing this- but many have been calling it the “HGTV Effect”. People see what is possible, and get their hammers swinging.

Value add

We’ve talked extensively about good debt and bad debt. In this case, taking on debt to fund home improvements can fall into the good debt category. But before you take on that debt, carefully plan out your renovations. There are renovations that will boost the asset value (as in you can expect to recoup much of what you invest); there are also those that are nice to have, but are really more for your own enjoyment.

Best bang for your buck? Kitchens, bathrooms and master bedrooms are big winners. Other good ones include windows and doors and outdoor living improvements, like decks and patios.

Set your budget

With the proliferation of home improvement media, your expectations might be set a little high. You don’t have a TV crew. You don’t have sponsors. You have a budget that you need to stick to in order to keep that good debt in the “good” category.

Do a home renovation reality check. Do you need to gut your kitchen, or could you scale down the costs by doing more cosmetic things like refacing cabinets instead of replacing them or switching out hardware to modernize the space?

Do you really need to knock down walls, or are there other, more budget-friendly options available?

Let your budget — not your dream wish list — be your guide.