My husband and I will be renovating our house soon. We have the cash in hand for at least half of the amount needed for renovation(but our cash flow will be very tight if we use it). More below.?

I don't really like to borrow from friend/ family unless there is no choice or you are very close to the person, so I would rather pay off the reno first before investing.

I second Elijah and here's my take

1) you said you have half, plan to borrow half, but cash flow will be tight if you use the money. Sounds like you don't actually have that half safely. Have you already firmed up this is the final final package? What is the risk of overrun and additional costs later on?

2) have you already firmed up who will lend you money? Frankly in a crisis, those are willing to lend must be doing quite well and / or very good friends / relatives. If you don't have this already firmed up, what if no one feels they are comfortable enough to lend in this climate? After all the renovation is not life threatening right?

3) frankly borrowing so that you can put money towards stash away is just so wrong on so many levels. If you lose money or take a while to see profits then you don't intend to return the money? Do you have a plan on how you will pay it back? What if either one of you lose your job in the next six months? Can still pay back?

Frankly I think you guys should focus more on saving towards the renovation and less on stash away assuming the renovation is a must do priority. Try not to borrow. If accidents happen, you will probably not ever talk to the person who lent you money again for the rest of your life. I know, cause I have been on the other side.

Definitely recommend looking into your reno costs and evaluate whether they are completely necessary. Compare prices between interior designers. Best yet, have friends who work as interior designers give you a discount. I sincerely believe that paying off debt should be a priority. People massively underestimates the risk of losing money in the stock market. Please don't do that. Making paying off the debt your priority, having an emergency fund then seek investment.

Hi anon,

To be frank, I don't recommend that.

The reason is simple:

You're guaranteed to have to return the money to your relative/friend (unless you want to burn bridges)

You're NOT guaranteed to make returns from your cash flow if you invest in Stashaway or anything else, especially not in the short term (anything lesser than 3 years).

Think about this, what will you do if the market tanks? You still owe the reno money to your friends/relatives, and you definitely have to pay it out of your cash flow instead of liqudiating profits from your investments. I don't know about you, but that doesn't sound like a situation I'd like to be in.

It's more prudent to save up in advance for the reno (although you don't have the time frame for this any more, but you can do this for future big ticket items).