Ways to Stick to Your Budget When Building a New Home
If you’ve made a decision to build instead of buying a home, that’s a great start. Unfortunately, the real work starts when you sit down with your builder to choose a plan, finishes, and overall budget. Of course, the things that make sense on paper don’t always work when it’s time to break ground. Sudden changes and fluctuations in the construction industry, unplanned setbacks, and price fluctuations can all derail even the most thought-through budget. Although many people often assume it’s impossible to stay on budget, here are some proven ways to stick to your budget when building a new home.
Have a Detailed Plan
Many building processes often begin before many decisions regarding the design or interior finishes have been completed. Without a clear plan with blueprints, work schedule, and all the materials required, you’ll find yourself adjusting so much on the fly, which could easily derail your budget. Always put down a solid plan you can commit to so you can keep your budget on track from day one.
Track Your Spending
Always keep your eye on your budget during every phase of your home building by tracking all expenditures and flagging any overruns as early as possible. Consider mapping out your expenses on a monthly basis and noting everything down to help you keep the project organized and on track.
Depending on the size of your project, you can use a notebook or paper planner to keep track of all purchases and costs without spending a fortune. Alternatively, you can download expense-tracking software on your mobile phone, tablet, or desktop computer. You can then upload invoices, receipts, and other essential spending there.
The key to establishing a plan you can stick to is to establish your priorities in terms of style, function, and finishing materials. You need to work with your builder to agree on what aspects of the building you could skimp on when the need arises to accommodate non-negotiable categories. For instance, you may want to skip finishing your basement and keep it for the future and instead focus on more outstanding features like siding and gutter system. Or, you may want to opt for quality laminate or wood-look tile for your flooring, rather than genuine wood in order to cut costs. You may even choose granite countertops rather than marble for your countertops to save even more on spending.
Always hire professional architects, plumbers, electricians, etc., who respect your vision and prioritize your non-negotiables. More often, professionals can work within your budget and will offer you options for cost savings. Work with a reputable building contractor with a solid track record on completing homes of comparable design and budget. With experience in project management, professional builders can help you stay on budget without compromising quality.
Set a Realistic Budget for the Cost of Each Stage
Your final plan should include a breakdown of each stage of the building and line-item costs within each stage. Make things as close as you can get to the last penny. Find the most updated data and material and labor prices based on your location. A good way to do that is to evaluate competing bids, ask around about recent nearby new home buildings, and talk to designers and tradespeople who know real-life costs.
The more you dive into the nitty-gritty of selecting finishes before you start new home construction, the less likely you’ll run into budget overruns. Interior finishes often take the biggest chunk out of the total building budget. So, it’s important to plan for every penny down to your bathroom tile and kitchen faucets. To avoid budget-busting surprises, choose your finishes ahead of time and identify where you can tighten your budget or where you can splurge.
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