Mastering Your Money, How To Budget Like A Boss

Building your home is an exciting venture, but the financial planning required can feel daunting. Without a clear budget, unexpected costs and delays can derail your project. The key to a successful project is in creating a realistic and well structured budget. By carefully planning ahead and working with experts, you can navigate the process with confidence.

What are your Limits?

The first step, determine your financial limits. Assess your available funds, potential borrowing needs and costs, and overall financial situation to establish a budget that is manageable. It’s important to consider not just the upfront costs but also your long-term financial commitments such as loan payments, monthly expenses and ongoing maintenance. Be realistic and make smart financial decisions that won't keep you up at night.

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What are the Costs?

Once your financial parameters are set, research local construction costs to get an accurate understanding of what to expect. A good industry guide is to break it down per square foot. Building expenses vary depending on location, styles, expected level of finish, and the size. Compare quotes from builders and suppliers so you fully understand the market rates and avoid surprises. 

Break down your costs into ‘Soft Costs’ like permit fees, legal fees, insurance, utilities and ‘Hard Costs’ like materials, plumbing, roofing, framing and so on. Keep in mind that unexpected costs are inevitable and a reality of construction. So leave some flexibility or contingency in your estimates. 10% to 20% contingency is the general industry standard.

Needs vs Wants

Now that you have a clear understanding of costs, prioritize your needs and wants. Not every feature in your project is a must have. Separate the two and prevent unnecessary expenses that will eat into your budget. Focus on structural and functional elements first, leaving room for luxury features or upgrades later. We recommend that you work with a designer to help you identify your needs and wants and allocate funds effectively.

Monitor and Track Spending

To ensure you stay on budget, set up a good tracking system to keep a keen eye on your funds. In today’s digital world there are many apps and software systems to help stay organized and remain on track. Review your budget regularly and stay engaged with your industry partners, builder, designer so everyone is aligned with your goals and progress. Take it a step further and expand your knowledge by enrolling in a budgeting course at a local college.

Keys to Success

Budgeting for your new construction project is a complex and tedious undertaking. Careful planning, expert guidance and understanding your needs are a few keys to your success. Know your finances inside out. Prioritize your needs, and be ready for the expected and the unexpected. Do the hard work in the beginning and complete your next build without breaking the bank.

Ready to take the first step? Contact us today and let our team of experts help you create a home that’s both beautiful and budget-friendly.