Budgeting For Your Custom Home
When it comes to building your custom home, arguably, the most important step is budgeting. There is no one-size-fits-all when it comes to preparing to financially plan for your custom home, after all, it depends on size, location, labor, materials, and current real estate trends. Budgeting can be an extremely overwhelming experience, but the sooner you do it, and the more in-depth you go, the most confident you’ll feel as you progress throughout the building experience. There are ways to stay on budget when building a house, now let’s take a look at how to get there.
Create A List of “Top Priority” Features
These are your no-budge elements that you want, no need to be completed, and there are no ifs, ands, or buts about it. These are your most priority projects that you have always wanted and can’t see yourself living without. Maybe these include a large family room with vaulted ceilings, a wine cellar, or a luxurious master bathroom. No matter what it is, be prepared to leave behind the secondary features that you are not necessarily OK with waiting to complete, but can put off for a couple of years until you’ve built up the budget again to complete. A custom home is a marathon, not a sprint. Unless you are willing to go over budget, probably way over budget, then create this list and stick to it.
If You Want to Go Over Budget in One Area, You May Need to Go Under Budget In Another
This is a truth bomb, and maybe one you weren’t expecting — if budget is a priority for you, and most likely, it is, then you may need to prepare to give an area of your house less design attention than another, especially if you want to deck-out another room, or splurge on appliances for your kitchen. Saving money where you can, and when you need to, will absolutely help you in the long run because you never know when unexpected fees can come up, which brings us to our next point:
Be Prepared For Unexpected Costs
Plan for it. Don’t just be prepared for it, include it in your budget. This is not to say that mistakes will be made or things will go wrong, but on the off chance that something does arise, you won’t want it to catch you off guard.
That Being Said, Give Yourself Some “Wiggle Room”
It is completely up to you how much money you set aside to use for when you want to splurge on something down the road. It may not even be something you’ll want until you are building because you will be learning about so many products when you are building your home. There will be times when you find something so beautiful that you just need to splurge, so allow room for it.
Be Realistic About Costs
Your budget will take some research and lots of question asking. Create an itemized list that includes construction cost, land purchase, builder/architect fees, legal fees, permits, financing costs, moving fees, and all of the fun stuff, like landscaping. Remember, this budget is holistic and all-encompassing. Expect the final number to be big, and will include hard costs as well as costs that do have some flexibility. It may help to have a worst-case scenario budget, and a best case scenario budget.
Avoid the “It’s Only $200, We Might As Well Upgrade” Trap
Because, well, it is a trap, and one that you may fall into more than once if you allow yourself to open that Pandora’s Box. We’ve all been there! We know how easy it is to spend a little out of budget when we want something badly. If you must do this, reserve it for those top-priority elements than you really, really, want. Try to avoid doing this with other elements that you want to upgrade, simply because you did it for one. These “small” upgrades add up really fast, and before you know, you are operating way out of budget.