What Is Contingency Budget?
A contingency budget is money set aside beyond the quoted project cost — typically 10-20% — to cover unexpected issues discovered once work begins, such as hidden water damage or outdated wiring.
Example
On a $40,000 renovation, a 15% contingency budget sets aside an additional $6,000 for surprises.
Why It Matters
Older homes in particular often reveal hidden issues once walls or flooring are opened up — budgeting for this in advance avoids a mid-project financial scramble.