It’s a familiar story – a family or a couple is building their dream home. They have a budget in mind and eagerly start the build. Then it happens: costs start piling up. Then at the end of the build (if there is an end), they’ve gone way over budget. This can sometimes cripple families’ finances for the next couple of years. Have a look below at some tips on how to budget for your future build.
Track your spending
This is one of the most important things that you need to do while building a home. Make sure that you list every expense that is spent on the build. You can do this using a spreadsheet, or keeping track in a book. This way you can be extra sure that you’re sticking to your budget.
Plan in detail beforehand
Building on the fly is the worst thing any prospective home builders can do. You should do enough research about what types of finishes you would like. Also research a realistic square footage price, building materials, work schedule, and average general contractor prices. Changes can be very expensive.
Determine non-negotiables for your budget
Put simply, you and your general contractor should know which areas or build aspects take priority. Communication should constantly be open. this makes it clear which things can be left for later and which things can be spent less on. For example, if the budget is running tight, you could speak to your contractor about adding extra space to the bedroom. But then leaving a brand-new garage to be built later.
Use the right professionals
It is very important to do enough research about the building contractor that you would be using. You shouldn’t look at prices alone. Yes, they’re all contractors, but comparing them using only price is not the way to go. This is because the components that they offer are different. The best deciding factors should be about reputation and providing realistic prices (not underbidding).
Use your contractor to cover the basics
It can be easy to forget to include important items like service infrastructure, costs of excavation, land permits, etc. A good idea is to use your general contractor in the design process. Your contractor should be able to list the things that you might not have thought about. They will also be able to give you a good idea of costs while the design is being drawn up, which means you will be able to stay on track.
Be realistic about costs in your budget
It can be very easy to paint a picture in your head about your perfect house, with tall windows and chandeliers – but if you’re being realistic you might not be able to afford all that. This is why research is so important in the beginning, and to involve your contractor – so that you are constantly aware, and realistic, about the costs that will be incurred.
Choose finishes before breaking ground
By doing this, you ensure that you have the finishes that you would like (that also fit within the budget). Often, finishes are left until last, and many home builders are then left with little to nothing of the budget which means they have to settle on finishes that they might not otherwise have chosen.
Because the finishes are often the biggest expense, by doing this first you can also identify where you might need to cut on the budget for the rest of the build.
Avoid the “may as well” pitfall
You know it’s bound to happen – “It’s only $2 more for the better doorknobs, so we may as well buy those.” It might sound like a little, but that little can turn into a lot very quickly! Stick to your budget as strictly as possible to avoid gathering up a lot of little amounts.
Learn to compromise on your budget
If you’re a perfectionist, building a home might be a little difficult for you. You will have to learn how to compromise to choose or look for other options of tiles, wallpaper, building material or finishes. It’s better to sacrifice a small detail, rather than your budget, at the end of the day.
If you’ve chosen your architect and your general contractor wisely, this shouldn’t necessarily be something that you have to focus on, but it is still important to know. Regularly check in with the people that you have hired to see if there are any changes that need to be made or problems that need to be dealt with that might influence the budget.
Going through the process of building your own home can be a daunting task – especially if you start to think about all the money that you’re going to end up spending. By using the tips above you’re sure to stay on track, and maybe even save a little money.