Why Your Kitchen Remodel Needs a 20% Contingency
Every contractor will tell you to expect the unexpected. But until you've seen a kitchen demo reveal water damage, outdated wiring, or a rotted subfloor, it's hard to understand why that 20% contingency isn't optional—it's essential.
Quick Summary
Recommended
20% of total budget
Minimum
15% (newer homes only)
Projects with issues
70-80%
Why 20%? The Math Behind the Number
The 20% contingency recommendation isn't arbitrary. It's based on decades of contractor experience and industry data about what actually happens when you open up walls and floors.
Industry reality: According to the National Kitchen and Bath Association, 70-80% of kitchen remodels encounter at least one significant unexpected expense. The average surprise cost is $5,000-$15,000 depending on home age and project scope.
Contingency Calculation Example
This means your "$50,000 kitchen remodel" actually requires $60,000 in available funds to complete without financial stress.
Common Surprise Costs in Kitchen Remodels
These are the issues contractors encounter most frequently. Most can't be identified until demolition begins.
Electrical System Issues
Outdated wiring, insufficient circuits, aluminum wiring, or panels that don't meet code. Modern kitchens need dedicated circuits for appliances that old homes don't have.
Typical cost: $2,000 - $8,000
Plumbing Problems
Galvanized pipes that need replacement, slow drains indicating deeper issues, or the need to reroute pipes when moving the sink location.
Typical cost: $1,500 - $5,000
Water Damage & Mold
Hidden leaks under sinks, behind dishwashers, or from ice maker lines cause rot and mold that's invisible until demo. Requires remediation before new work.
Typical cost: $1,000 - $6,000
Structural Issues
Sagging floors, load-bearing walls where you wanted to open up, or foundation settling that affects cabinet installation. These require engineer consultation.
Typical cost: $2,000 - $15,000
Subfloor Replacement
Rotted, warped, or inadequate subfloor discovered when removing old flooring. Common around dishwashers, sinks, and refrigerator water lines.
Typical cost: $500 - $3,000
Code Compliance Upgrades
Building codes have changed significantly. GFCI outlets, proper venting, smoke detectors, and other requirements may need upgrades to pass inspection.
Typical cost: $500 - $2,500
How to Protect Your Contingency Fund
The contingency fund is not a slush fund for upgrades. It's insurance against surprises. Here's how to keep it intact for when you truly need it.
1. Keep It Separate
Put your contingency in a separate savings account. When it's sitting with your main project funds, it's too easy to "borrow" for that countertop upgrade.
Pro tip: Name the account something like "Kitchen Emergency Fund" so every time you see it, you remember its purpose.
2. Define What Qualifies
Before starting, agree (with yourself, your partner, and your contractor) on what counts as a contingency expense.
Contingency: YES
- Hidden water damage
- Electrical rewiring needs
- Plumbing replacement
- Mold remediation
- Code compliance issues
- Structural repairs
- Subfloor replacement
Contingency: NO
- Countertop upgrade
- Better appliances
- Additional lighting
- Backsplash you forgot
- Higher-end hardware
- Wine fridge addition
- Pot filler you now want
3. Require Documentation
Before spending from contingency, require your contractor to show you the problem (photos, video), explain why it wasn't foreseeable, and provide a written cost for the fix.
Warning: Some contractors will try to use your contingency for scope creep or costs they should have anticipated. Always ask: "Could this have been identified before demo?" If yes, it may be their responsibility.
4. Don't Spend Leftovers Prematurely
Surprises can appear late in a project. Don't decide to spend "leftover" contingency on upgrades until your project is 100% complete and you've lived in it for a few weeks.
What Happens Without a Contingency Fund
Homeowners who skip the contingency fund often face these difficult choices when surprises hit:
Cut corners on the fix
Patching problems instead of properly fixing them leads to issues down the road. That water damage you didn't fully remediate? It becomes mold. That electrical you didn't upgrade? It fails inspection.
Take on high-interest debt
Credit cards at 24% APR to finish your kitchen mean you're paying for that remodel for years. What could have been a $10,000 surprise becomes a $15,000+ debt after interest.
Sacrifice planned features
That under-cabinet lighting, the pot filler, the custom pantry organization—they get cut to pay for the surprise. Your finished kitchen doesn't match your vision.
Live with an incomplete kitchen
Some homeowners run out of money mid-project and have to live with unfinished work—missing backsplash, basic fixtures, or placeholder solutions—until they can save more.
Frequently Asked Questions
Why do kitchen remodels need a 20% contingency?
Kitchen remodels require a 20% contingency because they involve opening walls and floors where hidden problems lurk. Common surprises include outdated wiring that doesn't meet code, water damage behind cabinets, plumbing that needs rerouting, and structural issues. Industry data shows 70-80% of kitchen remodels encounter at least one significant unexpected expense.
What if I don't use my contingency fund?
If you complete your remodel without using the contingency, congratulations! You can put it toward your next home project, pay down your mortgage, or simply enjoy knowing you had financial security throughout the project. Never spend it on upgrades just because it's there.
Is 10% contingency enough for a kitchen remodel?
A 10% contingency is often insufficient for kitchen remodels, especially in older homes. Kitchens concentrate plumbing, electrical, and appliance systems in one space, creating more potential for hidden issues. 15% is the minimum, and 20% is recommended for homes over 20 years old or if you're moving plumbing or electrical.
What counts as a legitimate contingency expense?
Legitimate contingency expenses are unforeseen problems: mold behind cabinets, outdated electrical that requires rewiring, water-damaged subfloor, asbestos in flooring, rotted framing, and code-required upgrades. Upgrades you decide to add (nicer countertops, better appliances) are NOT contingency expenses—they should come from your main budget.
Ready for the Next Step?
With your contingency fund set aside, it's time to explore how you'll pay for your kitchen remodel. Understanding your financing options helps you choose the most cost-effective approach.