One of my readers on The Spending / Savings Balance post asked why I should feel bad spending money on remodeling my house when it should be considered an investment, so long as I don’t go over board. The truth is that when I was cutting multi-thousand dollar checks every week, I was telling myself that all this spending was indeed an investment to make myself feel better about going outside my spending comfort zone.
But now that I’ve taken a hiatus from spending for a couple months, given it takes time to get my drawings approved by the San Francisco Planning Department, I’ve come to realize how dangerous it is to justify every single dollar spent as an investment. An investment has an implicit assumption that it may provide a return some time in the future. The reality is that there are no guarantees, except for the guarantee you no longer have the money you spent!
My hope is that by spending around $100,000 on my home, I’ll provide at least $200,000 in value at some point in the near future. Given I was so focused on this type of “investment return,” I cut checks with ease for the first $60,000. Now that I’ve taken a break and only have $40,000 left in my budget to spend, I’m going to be as scrupulous and strict as possible to make sure the contractors do an amazing job within budget. If I didn’t take a break from remodeling, I’m pretty sure I’d go over my budget by at least $20,000.