Going significantly over budget is one of the top concerns (actually, THE top concern) I hear from my clients and readers who are preparing to build a house. I completely understand this because it was also my biggest fear when I was building. However, what if I told you there ARE ways to stay on budget when building a house?

It’s true.

My husband and I built our custom home without going over budget. 

And I know that what we did can work for you, too.

In this episode, I’ll share eight ways we managed to keep our home-build budget in check.

Be sure to keep these tips in mind (and implement them) as you build your dream home so that when you move into your brand new home (yay!), you feel great about the final cost of your house :).

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Welcome back to the Before You Build Podcast! I’m your host, Carrie Barker (a.k.a. Caroline on Design), and today, in episode 50, I’m sharing eight ways to stay on budget when building your house.

My husband and I followed everything on this list when we built our custom home.

And we came in less than 2% over budget (without sacrificing our must-haves).

I know these tips can work for you, too … regardless of how large or small your budget is. 

Wanna know my secrets for how I built my dream home within budget and without sacrificing my must-haves? It’s all in my FREE on-demand training, ‘3 Simple Steps to Build a House You Absolutely LOVE (without blowing your budget)’.

All right, let’s get into it …

8 WAYS TO STAY ON BUDGET WHEN BUILDING

Again, these are eight things that I followed when I built a custom home, and I stayed within my budget. 

Be sure to implement these yourself so that you, too, stay on (or close to) budget when building your house.

1. IF YOUR BUDGET IS TIGHT, LET YOUR TOP PRIORITY BE YOUR GUIDE

If your budget is tight, splurge on aspects of your future home that are most important to YOU.

In other words, your must-haves should guide where you splurge with your budget.

When we built our house, I wanted a finished basement (like RIGHT AWAY), but I had to wait a couple of years to finish it because custom trim work throughout our house was a higher priority for me.

I couldn’t afford all of the trim work plus the basement at the time of building, so I invested in my top priority, custom details.

Here’s another example …

If you have a large family and need more square footage, focus your budget on the size of your home rather than the level of finishes (i.e. opt for stock cabinets, laminate counters, inexpensive carpet, low-end appliances, etc.). 

You can always upgrade finishes in the future … but it’s much harder and more costly to add square footage after your build.

On the flip side, if you’re more interested in custom details in your home (e.g. window seats, crown molding, high-end appliances, custom cabinets, etc.), focus your budget on your finishes and custom details over your square footage.

2. IF YOU GO OVER BUDGET IN ONE AREA, GO UNDER IN ANOTHER AREA

This might be obvious, but just in case you didn’t think of it yet, I wanted to share this tip :).

Unfortunately, it can be difficult to stay on budget because allowances (e.g. appliances or light fixtures) tend to be very low (ridiculously low). 

Our appliance allowance was so low that it didn’t cover all our appliances. 

Soooo …. needless to say, we went over budget on appliances.

However, we offset going over our appliance budget by choosing more basic (yet still custom) cabinets and drawers in our kids’ bathrooms. 

I would have loved fancy five-panel drawers and cabinets for my daughters, but we needed to save money, so we opted for basic flat drawers in our secondary bathrooms.

If you’re creeping over budget in one area, find another area (that isn’t as important to you) to cut costs.

3. BE REALISTIC ABOUT (ALL) COSTS YOU WILL INCUR

It’s important to be realistic about ALL the costs involved during the building (and moving-in) process.

You’ll have construction costs, land costs, and builder/architect fees … but you also need to factor in many other expenses.

These expenses include legal fees, permit fees, financing costs, moving fees, and the fun stuff … window coverings, furniture, home decor, and landscaping. 

It’s important to keep ALL of these costs in mind when you’re creating your REALISTIC budget.

4. BE HONEST (with yourself AND your builder) ABOUT THE FINISHES YOU WANT

Almost everyone says, ‘You’ll go over budget when building a house.’ 

They state this as if it is a fact.

It’s not a fact. 

And it’s not inevitable you’ll go over budget when building a house.

My home build experience is proof of this.

I stayed VERY close to budget because I was honest and clear with my builder about the caliber of finishes I wanted BEFORE he priced our custom home.

If you are 100% honest and upfront with your builder about EXACTLY what you want BEFORE they give you a quote for your house, then they can give you an accurate quote.

You need to be VERY clear about the level of finishes you want (e.g. custom trim work throughout your home). 

If you want high-end Subzero appliances, for example, ensure your builder adds a realistic (and high!) appliance allowance to your bid.

The people who tell you they went significantly over budget on their house likely had many change orders and ‘upgraded’ their home WHILE they were building.

You have a much better chance of sticking to budget if you’re honest with yourself and your builder about how nice of a home you want BEFORE you break ground.

builder about how nice of a home you want BEFORE you break ground.

Wanna know how I built my dream home within budget and without sacrificing my must-haves? It’s all in my FREE on-demand training, ‘3 Simple Steps to Build a House You Absolutely Love (without blowing your budget)’.

5. CHOOSE AS MANY FINISHES AS POSSIBLE BEFORE CONSTRUCTION STARTS

I recommend choosing as many design fixtures/finishes as possible BEFORE construction starts.

I recommend this because when you do this, you are purchasing the building materials at the price quoted at the BEGINNING of construction.

During my home build, we paid the price we were quoted for materials regardless of any price increases during the build. 

We were required to pay higher than the quoted price only if we made a change order and chose a different (more expensive) product. 

Some builders will have you (the consumer) absorb material price increases during construction. 

Example … if you are quoted $3 per square foot for a particular wood flooring product, and the product cost jumps to $5 per square foot, some builders will have you pay the increase. This is more common post-pandemic.

Boom … you just went over budget. 

So choose (and order) as many finishes and fixtures as possible before the price has a chance to increase.

6. AVOID THE ‘IT’S ONLY $200, SO WE MIGHT AS WELL UPGRADE’ TRAP

We all do this! 

It’s only $200 more to upgrade this or that … so we might as well upgrade. 

Believe me … these small upgrade costs ADD UP quickly when you do this multiple times!

If a finish or fixture is really important to you, then go for it and upgrade to what you want. 

However, if a finish or fixture isn’t that important, stick to your allotted allowance if possible.

7. ALLOW SOME ‘WIGGLE ROOM’ IN YOUR BUDGET FOR AN UNFORESEEN SPLURGE

Allow some wiggle room in the budget for a splurge you don’t even know you’ll want until you build. 

You will learn about many gorgeous products while you’re building your home. 

There will be an area where you find something so beautiful that you just have to splurge (e.g. a fancy imported tile for your backsplash). 

Allow room for this.

Remember that you can shift your budget a little bit (see #2 above). 

For example, if you choose a ‘splurge’ wood flooring product, counteract this with inexpensive carpet in the kids’ bedrooms (they’ll never know the difference).

8. DO YOUR RESEARCH WHEN IT COMES TO SELECTING A BUILDER

Do your research on builders in your area.

Get references.

Pay attention to which builders consistently have clients go over budget.

I received two bids for my home build … both with the same specs (extensive trim work, etc). 

One bid came in higher than the other. 

Guess which builder I went with? 

The one with the higher bid. 

Surprised?! 

I did this because I knew his figures and costs were REALISTIC.

The other builder’s pricing wasn’t realistic.

Of course, it would have been great to go with the lower bid IF it was accurate, but I would have gone over budget once we got into the construction process because the quoted prices were unrealistic.

If the quote seems too good to be true, it probably isn’t realistic.

NEXT STEPS

All right, there you have it.

Eight ways to help you stay on budget when building a house.

As I mentioned earlier, blowing the budget is the top fear I hear from my clients and readers who are planning to build a house. 

I assume one of your top goals is to stay as close to budget as possible.

And you have the power to do this.

You don’t have control over everything, but you DO have control over many aspects of your home build and the cost of your house.

It IS possible to build your dream house close to budget.

And now you are armed with eight ways YOU can stay on budget when building your house. 

Wanna dive deeper and learn the exact step-by-step process I walk my clients through (to equip them to build a house they love, without blowing their budget)? Grab a (virtual) seat in my free, on-demand training: ‘3 Simple Steps to Build a House You Absolutely Love (without blowing your budget)’.