HOW TO BUDGET FOR YOUR NEW HOME OR RENOVATION

Creating a budget for a large project can feel daunting and challenging, especially if the budget you’re creating is for your Forever Home!

Doing your homework, to create reasonable expectations allows you to set a realistic budget, so I thought I’d share some steps to allow you to create a realistic budget for your home.

SETTING A BUDGET

Creating a budget for a large project can feel daunting and challenging, especially if the budget you’re creating is for your Forever Home!

Doing your homework, to create reasonable expectations allows you to set a realistic budget, so I thought I’d share some steps to allow you to create a realistic budget for your home.

The most common way people generate their budget is based on a fixed set amount that is allocated to the project. You will also need to assess if your budget is enough to do what you want to do.

The other way is figuring out what you want or need in your home, and the type of house you would like, and then determining how much that will cost to create and build. This approach is far less common as costs an escalate quickly.

Points to consider when determining if your budget will allow you to do what you need to do;-

  • What is the size of the home you wish to create?
  • Is the home single or double storey, or are you renovating to go up or out or both?
  • What finish would you like – budget, mid or high end?

Having a quantity surveyor involved at the early stages of your project will assist you to understand how much it’s going to cost you. A quantity surveyor will give you a calculated estimate of materials and labour based on the plans and desired finish to provide a really good idea on costs.

This prevents you getting to tender stage and then finding out what is designed is well over budget and trying to claw back costs, or perhaps even going through a re-design.

Another way to get a rough idea is to use the square metre (sqm) rate based on the square metre size of your home or renovation.

Most importantly – keep track of all your costs. Preliminary, design, consultancy, build costs and so on. Make sure you know exactly what is being spent and where!

UNFORESEEN EXPENSES

With any build or renovation, even if you’re working with a fixed price contract, there are always unexpected costs that arise. Totally unpredictable things happen. So you need to be prepared.

Make sure you have a contingency budget. Allocate at least 10 to 20 percent of the build or renovation cost as your contingency. This will cover any unforeseen things that pop up the building or renovating process.

If you are still uncertain about planning the budget for your home and ensure you have everything covered – be one step ahead and be totally planned and prepared for your Forever Home renovation or new build and check out the ‘Your Forever Home – The First Steps Online Course’ – where we go through step by step how to be planned and prepared.

Not only will you receive a complete Budgeting Spreadsheet with everything covered in it, you’ll also learn about all the other preliminaries to ensure you totally prepared to create the home of your dreams.

Find out more here.

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