Creating and Sticking to a Budget
Creating and Sticking to a Budget
Every home construction project is unique, as are the homeowners; however, no matter the project or people involved, there is one universal question we are always asked: “What will this project cost?” Your budget is one of the things that keep us up at night. We would love nothing more than to give you a number that comes in below your “budget” and move forward, but unfortunately, this is almost never the case for a variety of reasons.
When starting this process, we know you have a budget. We know you have a finite amount of cash allocated towards your home and going above this amount will put you in a less than desirable place financially. You will communicate this number to us repeatedly and express that we stay within this number. We truly don’t want or mean to go above this number, however, there are several factors that serve to increase the “budget”. Below are 6 tips to think about that will help you stay within budget.
1. You are in charge. From the start, you are in control of your money and your budget. You know what you can spend and the lifestyle you want to live in your home. You choose with whom you hire and work with, and you approve any and all change orders along the way. Remembering this will help you stay in the driver’s seat instead of being a victim where others are making decisions for you.
2. Know your costs prior to construction. Sure, everyone will give you a cost per square foot for your new build or remodel, however there are many costs and fees incurred prior to even breaking ground.These costs can include architectural drawings, variances, permits, engineering, soil surveys, legal fees, etc. For new builds, the land you choose can incur additional costs if the builder has to make way for extensive drainage needs to clear trees or blast through rocks. For home remodels, the builder is unable to predict whether additional work will be needed once they tear down walls and begin construction.
3. Collect bids from all disciplines. Once you finalize architectural plans, you are ready to collect bids from all disciplines. Put these big numbers into a spreadsheet so you can keep track of them. Identify all of your potential costs and assign each a value for the spreadsheet. Add additional items like furniture and landscaping to the spreadsheet. Remember, each and every time you change something – a wall, a sink, a window, it will add money to your project. Get all change orders in writing and add it to your spreadsheet.
4. Communication. As mentioned above, every time you make a change, it will cost you money. Communication is key. Communicate with your spouse or partner to decide what you want before you each communicate something different to the builder! If you are thinking of a generic range and your spouse is thinking of a top end range, this needs to be communicated ahead of time! Each time you incur an additional cost, discuss where the money will come from. Can you increase your budget or should you choose a less expensive backsplash to counter out the additional spend? A good builder will schedule meetings often to try to alleviate communication issues before they arise.
5. Decide where to splurge and consider tradeoffs. Do you want that kitchen backsplash to be truly remarkable or do you want an outdoor kitchen? Deciding on your priorities will help keep things in perspective and allow you to hold off or proceed. Get what you want and stay on track by moving budgeted amounts from one pocket to another.
6. Might as wells. This is the mentality of “while we’re at it we might as well … ” Each “might as well” may only be a few hundred dollars, but the more you have the more it adds up and then you find yourself in the trade-off position. Refer back to the plan you made and stick with it.
Remember you chose your builder because we are the best partners for your project! We truly are here to make sure you get what you want and live the life you want to live. I promise, we aren’t trying to be the bad guys – making you spend more money. Have a plan, communicate often and sticking with it is the best advice we can give when building a new home or entering into a remodeling project.