Managing A Budget When Building Your New Home


budgetingBuilding your own home is both rewarding and stressful. The learning curve is steep as new challenges present themselves daily. Even seasoned professionals feel the pressure when building a home for their family.

Managing a budget when undertaking a self build is the most important factor in reducing the stress of the project and maximising your enjoyment. But it’s also one of the most difficult things to do. Many people get it wrong and end up with far more debt than they intended, or worse, having to give up. Make sure you don’t get caught out on your self-build and before you start, learn how to manage your budget.

Cash is king

However you are funding your build ensure you have enough cash to pay for materials, suppliers, tradesman and your living costs during the project. Different loan and mortgage suppliers will release the cash on different terms. Make sure the cash will be available at the right stages and not tied up in bonds or equity. Be very clear about your cash flow before you start anything else. Don’t rely on being able to re-mortgage a house, or extend a loan, as the economic downturn has made acquiring extra cash much more difficult than it used to be.

Spend more to spend less

Always receive at least 3 quotes from suppliers and tradesmen before you decide on what to buy, but don’t always go for the cheapest. Whether you’re sourcing materials or deciding on a builder, architect or designer, choose and pay for quality. If you go for the cheapest then the chances are that you will have to redo things and this is where budgets can spiral out of control. Take the time to do research on who you are going to use.

Use reputable suppliers

You will need goods to turn up on time in order to stick to your budget. If your windows turn up four weeks late, then that’s four extra weeks without a weather-tight house and four extra weeks of paying project managers and builders, as well as having to juggle other trades people such as plasterers.

Have a contingency fund

With the best will in the world a project as large as building a home is going to hit obstacles. You can plan as much as you like, but it could snow in May, your head builder could come down with food poisoning at the worst possible moment and your bespoke staircase company could go into liquidation. Things happen. Rather than plan everything tightly and efficiently, plan for life to get in the way. At every stage of the build allow extra time and extra money. It’s the only way not to get caught out. If you finish early and with extra money you won’t complain.

Stick to your plan

You have had an image of your ideal home floating around in your head since childhood. You’ve lived in many properties you’ve disliked and dreamt of perfection. You know where you want the sockets situated, you know what brand of thermostat you like and you know what splash of colour you’ll have on your new bedspread. Don’t start your build until you have finalised all your plans and make sure final means final. You can always redecorate in a couple of years if you wish, but for the initial home build if you go off on a whim you will blow your budget. It’s not just the extra cost of materials, but the extra time for builders, the extra work for contractors and the architect may have to redraw plans. Changing your mind costs a surprising amount of money.

Decide on the best use of your time

It may save you about 20% of the cost of a build if you project manage yourself, but is this the best use of your time? Project management is a full time and stressful job. You could well be better handing over to a professional and continuing with your job. Trying to juggle a full time job and project managing is a huge undertaking. If your work suffers then so could your money, not all bosses will be forgiving if your performance takes a downturn. This won’t mean that you’re not involved in the build, but it may place less pressure on you and your family. If you have the time then, of course, project managing is a rewarding experience, but don’t undertake it unless you can commit 100%.

If you have a project manager or managing builders like K.J. Hill, they should be able to advise you what may go wrong at each stage of the build, e.g. planning, architects drawings, groundworks/foundations, services, floor screeding, electrics, bricklaying/blockwork, roofing, plumbing, partitioning, dry lining, plastering, decorating/painting etc. This will enable you and them to plan for contingencies so that they may be managed at minimal cost.



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