Do I need a contingency fund?

If you find out that the work you wanted to do costs more than you expected or budgeted, you’re in good company. It’s almost unheard of that a person sets a realistic budget for a project. But don’t eat into your contingency to stretch the budget. If you follow rule number one and make every decision ahead of time, you can probably get away with a 5 percent contingency if you have a good general contractor.