Planning the Budget for Your Custom Home

by c21commonweath_ldowling 27. January 2020 15:27

Having a custom home built from the ground up is one of the most ambitious projects a family can ever take on. Just planning the budget for your project is arduous enough—setting one is difficult and sticking to it is even harder. Maybe you’d rather skip budgeting and pay as you go along, but that would be a mistake. If you don't make a budget, the costs of your project can quickly get out of hand, turning your dream home into a nightmare that you'll be living in for the next 40 years. Setting your budget can be an emotional process—it's the time when your dreams and reality collide. Here are five tips for taking the stress out of budgeting:

1. Where Are You?

Every home needs a piece of land to sit on. Depending on where you are, the price of land can vary enormously. You can't build a home without buying land, so its cost is a logical budget starting point.

2. Size Matters

There are no absolute rules, but custom homes typically cost between $100 and $400 per square foot. This cost can vary based on your location, the materials you choose, and how much construction is going on in your area.

3. Finishes and Materials

Building a custom home almost always involves compromise. Do you want more square footage, for example? You may need to sacrifice the high-end fixtures and finishes. Many people go in thinking they need the most expensive materials to build the best-quality house, but spending more on a great design is usually the better bet.

4. Plan for Missteps

With a project as complex as a custom home, you'll likely face unforeseen costs and delays. Maybe you need to wait for a building inspection. Maybe the tile you chose is back-ordered. No matter what the cause is, just know that something will probably happen. When you set your budget, be sure to leave some extra room for cost overruns.

5. Budgets Are Flexible

There’s one last thing to remember: The budget is there to serve you. If the one you set originally is too tight, you can change it. Planning expenses is a preliminary step that you'll take before you have all the answers. If you need to change the budget, do it. Even though planning a budget takes little more than a pencil and paper—nothing compared to the power tools and heavy machinery used during your home’s actual construction—it can still be a daunting task. Thinking carefully and leaving yourself some wiggle room will set you on an easier path.