Are you building a house on a budget? Or hope to at least? This is a painful post to write because we are currently in the thick of home building and our house build budget (or expenses incurred) is not completely finalized, but we are currently under budget as it currently stands.
Building a house on a budget was more stressful than I thought it would be, and not because my husband and I are disagreeing about things (we have very similar taste in decor and design, thankfully) but because of the sheer time commitment, communication (communication with trades, with our contractor, you name it) and decision making involved.
I am not shy with decision making and was able to buy a condo as a single female a few years ago. However, the decision making involved with building a house takes the cake.
I am definitely suffering from decision fatigue, especially when you spend 2 hours at a tile shop looking at tiles, and then another 2 hours discussing which tile would look good, on top of the 4 hours my husband spent looking at another tile shop. And we haven’t even made a decision yet about tiles! ((EDIT: I wrote this a few weeks ago and now we have finalized our tiles, haha but not the kitchen backsplash, that will be next)).
It’s not just decision fatigue but the sheer amount of things that can go WRONG (and have gone wrong) with the home build.
The good news is that we are on budget (the bad news is we are running a bit behind and are delayed somewhat).
Here are 7 tips for building a house on a budget and how to save money when building a new home.
Table of Contents
Choose Your Contractor Wisely
One of the most important decisions when building a house on a budget is choosing your contractor.
There are different payment methods for contractors.
- One that I am aware of is “cost plus”, where you pay for the build and the contractor charges a certain percentage more from what is paid directly to tradespeople.
- Another is having an estimate of your square footage and just giving a blanket statement of how much it will cost per square foot. For example, the whole build will cost $250 a square foot or $350 a square foot. With this approach I believe the contractor has much more control over who they choose and the worry is that they will ‘cheap out’ on materials because you are paying a set price in order for them to get more profit. On the more positive note, if costs rise (for example, with lumber), usually the contractor will suck up the cost.
- Finally, another option is to pay your contractor a management fee to do your build for you. They provide you with quotes and orchestrate the whole build but you decide who you want to pick as tradespeople (and they provide some recommendations).
The contractor we chose does the last option. We felt that the last option was the least likely that our contractor would receive some sort of kick back from the tradespeople who works with.
Although we chose the last option as a precautionary measure, we’re not sure if he gets kick backs (aka affiliate income for the contractor world)- sometimes it seems like he does because the tradespeople often say they will speak to our contractor again when we are negotiating a quote with them.
Negotiate Negotiate Negotiate
There are so many trades involved. Flooring people. Tile people. Painters. The list goes on.
We made sure to ask for at least one other quote so that we could compare, and when our contractor did not have another quote, we would ask around from our contacts (for example, our designer) to see if there are any other recommendations.
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Once we got that and made a decision with who we will go with, we would contact the tradesperson involved and negotiate. Sometimes it helped that the tradesperson found out we were asking around for another quote. For example, we got another painter quote and although the original painter was cheaper (the first painting company didn’t know this of course), he knocked the price down by another $1000 to make sure that we would go with his painting company instead.
Another example is when we negotiated with Best Buy for our appliance package. We saved a lot of money with this through negotiating with the sales manager. More on that later, Best Buy has been a headache to deal with, though we did save a lot of money (like thousands).
Review Contracts and Quotes Thoroughly
Here comes the painful part for me. One big way to save money on your home build is to review contracts and quotes that you receive thoroughly. Even if you don’t understand them, speak to your contractor and make sure he understands and reviews it (IN PERSON) with you. In this digital age, all quotes are emailed to us and we are having to make a decision (accept or reject the quote) very quickly and in a short duration of time. It can be easy to review them too quickly. Read the fine print!
The scary thing about building a home is that a small little error on paper becomes a big, pretty much permanent error in the home build (unless you fork out some more money to fix the mistake).
We ordered a nice patio door and wanted it to slide a certain way so that there was more access to the open kitchen. When my husband and I were reviewing the quote my instinct and focus was to ensure that the pricing was correct. We even got our contractor to review the quote with us to ensure that he was satisfied with the result.
Then, when the patio door was installed, we noticed that it was sliding the wrong way (right to left instead of left to right). We looked at the quote again, it clearly stated on the quote that the arrow (of which way it pointed to when you opened it up) clearly said “viewing from viewing outside in” (we were viewing it from inside out when we picked the ‘door slide’ direction).
We contacted the patio door vendor and he was sympathetic, but states that in order to replace the door you have to replace the whole patio door, which would cost another $3500 (which is almost the same price a the door in the first place). When we realized it was our own problem I have to admit I cried a little! Yeah, I know, #firstworldproblems.
We decided to just keep it as is.
This is but ONE of the many examples of this problem. We had other problems with quotes and not being able to read the quotes very well (since we are not in the home building industry) and our contractor not really picking up the ball to review things with us… or review them, period?
Know Your Budget
We would get slammed with emails of quotes from tradespeople and were asked to make a decision relatively quickly (like 1-2 days turn around time for a decision) depending on the quote. It was helpful to have our budget handy (it was initially created by our contractor) to see whether the quote was within budget or over budget.
Having the budget handy helped us make decisions more quickly and figure out where we should try and save and where we should try and be more lenient about the budget.
I would periodically go through the budget and calculate if we were over or under budget, about every month. It was helpful to know so that I could answer people when they asked “are you on budget?” because there were some things that were way over budget (for example, our lumber and house supply costs were about 30% higher than the budget line item thanks to higher costs on aluminum and lumber and so forth) and some things we were very much under budget for (our roof was half of the estimated cost).
Be Organized with Spreadsheets Galore
I’m not very good with spreadsheets (I recently learned how to add things up in Excel) but my husband crafted a great spreadsheet of the total costs so far including tax of the house build. He also categorized the spreadsheet according to the trade so that it would be easily sourced so we know how much we have spent so far.
This was the key to building a house on a budget.
We obtained a rough budget from our contractor when we first started and I have been adding to it as we go along. Adding up the totals we have spent so far before tax to see if we are on budget.
There are some categories we have been wildly over budget on and some categories we have been very much under budget on.
Being organized has helped us calm down when we feel like we are wildly over budget but in actual fact we are still under budget with the build as a whole.
Be Frugal on the Items You Can be Frugal On
There were many things that were pretty much non-negotiable or that we couldn’t ‘pick’. Like for example, insulation or concrete. Our contractor provided us a quote for each of these trades and basically there wasn’t much selection, it was a ‘yes or no’ decision and there wasn’t much choice at all.
On the other hand, there was a lot of choice with kitchen appliances, lighting, and plumbing fixtures. With kitchen appliances our estimated budget was $35,000 and we spent about $20,000 after taxes on our kitchen appliance package (for a set of three kitchens).
There was no checking out Miele or Sub-Zero because that would be guaranteed to blow our appliance budget out of the water (because one Sub Zero fridge is like 5 figures I think- I’m not sure I didn’t dare look).
For plumbing fixtures, we selected higher end rough-ins (Hansgrohe from Germany) and faucets, and then chose middle range for something that didn’t matter as much, like the rain shower head. We found cheaper Hansgrohe faucets because we chose the Hansgrohe Logis faucet, this faucet is geared more towards commercial units, so it was much cheaper than the typical Hansgrohe faucets– but it still has the beautiful sleek minimalist lines and modern look that we were seeking.
For lighting, we sourced as much as we could from Costco (our electrician recommended Costco for their LED lighting because of their great return policy and great quality), and found a modern dining room light for $160, when something similar was going for at least $1000 at the lighting shops we looked at.
We also bought five bathroom vanity lights on Amazon.com for 50% of what the lighting store cost (the one our contractor recommended). I signed up for a Rakuten account and saved in total $20 USD on top of that (it’s the best cash back website). However, I did do a PF Blogger FAIL and accidentally used our Visa TD Aeroplan card instead of our US dollar Visa card (and hence paid for it with terrible conversion fee).
There are some things we spent a bit of extra money on that was very worth it, though, for example, skirted toilets and niches.
Upgrades/ Splurges That Were Worth It
These upgrades make your daily life more simple and stress free. These upgrades are definitely less ‘technical’– I’m not talking about wiring for a home theatre system so they can be done if you are doing a simple bathroom or kitchen renovation too.
1.5 years living in our new home, I still stand by these upgrades that were worth it when you are building a house on a budget!
I had never heard of a ‘skirted toilet’ before until we started looking for bathroom design ideas, but they are the best toilet design, hands down. It is when the lines at the base of the toilet are clean and minimalist. The pipes at the base of the toilet are not visible. Frankly, I’m surprised no one designed this earlier.
I used to absolutely hate cleaning the sides of the toilet because when you try and dust it, the dust just gets wet and clumps together and moves elsewhere on the porcelain.
Or it collects in the crannies and crevices of the piping and you have to keep wiping and re-wiping the same area to try and get the dust out while you are on your hands and knees beside the disgusting toilet. It still doesn’t wipe out and that’s when you curse under your breath and think about how much you hate cleaning the toilet.
I have a confession don’t think I’ve wiped the sides of the toilet bowl yet because they don’t look dusty or dirty with a skirted toilet or a concealed trapway toilet. It’s been over 6 months and it still looks clean. #worthit
The photo below is a picture of our skirted toilet. Doesn’t it look so sleek and dust free?
We got an older version of this Toto toilet. I’m not too impressed with the frequency that we need to clean inside the toilet bowl (the flush doesn’t seem to be as strong as our old American Standard toilet) but at least the outside ‘skirt’ looks clean. We only got this nicer skirted toilet for the bathrooms that are high traffic and are seen often and we got a cheaper toilet for other bathrooms.
Floating Bathroom Cabinets
Another great home upgrade that is worth it is installing floating bathroom cabinets. Floating bathroom cabinets give more of a modern and contemporary look (probably not applicable to your renovation if you have a more traditional looking bathroom).
I was skeptical at first, because I thought that if they are floating won’t there be dust accumulation underneath where you can’t see and vacuum?
The answer is no, because the vacuum goes under the floating cabinets very easily and dust doesn’t go to the area at the back of the cabinet because dust doesn’t collect there. If you had a base to the cabinet, the vacuum might have trouble picking up the dust and then you would inevitably have to wipe it by hand to clean the area.
Floating bathroom cabinets are more expensive to install because you have to anchor them to the wall, but our cabinet guy gave us an option of ‘semi-floating’ cabinets. Where they look like they are floating but aren’t really floating but have a very recessed base, they are cheaper to install compared to the traditional floating cabinet. These are called faux floating vanities with a deep recessed platform.
These are also more sturdy compared to a typical wall hung cabinet in case our toddler thinks it’s fun climbing on the bathroom cabinet. You can only see the recessed part if you crouch way down, but otherwise, it looks like it’s floating as you can see from this picture of our bathroom.
Thermostatic/ Pressure Balance Shower Trim
Other home upgrades that are worth it? I had no idea that shower faucets and trims could get so fancy.
We installed a pressure balance trim in the kids’ bathroom. You can set the temperature and have it ‘fixed’ and then just turn it left or right for the bath faucet or for the shower. The temperature is set and fixed.
Grohe’s Grohflex is great because you can just turn it on to ‘bath’ mode and the temperature for the bath is set. You don’t have to worry about the bath water getting scalding hot or having to bend down herniate your back and wait for the water to be warmer and just the right temperature before you step away.
The trim that we used was the Grohflex dual function pressure balance trim.
It actually isn’t very expensive at all, it looks fancy but it’s quite economical.
Also, your home build can impact your utility bill, the above faucet can save money on water.
Silgranit Kitchen Sink
I saw this sink in a friend’s home renovation and loved it. It looked so sleek and matte and modern and not to mention clean. What’s Silgranit? Silgranit is a granite composite sink that is made by the company Blanco.
It is considered to be very durable, it is stain and scratch resistant. It’s also soft to the touch. According to The Spruce, Silgranit sinks are made out of 80% granite, that’s why they are so durable. There are seven patents on the Silgranit sink and that’s why Blanco is the only one who has this sink on the market. They even offer a lifetime warranty.
It was actually cheaper or comparable price compared to some some stainless steel sinks that we looked at. I find stainless steel difficult to clean because it stains easily and it can scratch easily. No matter how much I cleaned the stainless steel sink that I had before, it still looked a bit dingy after years of use.
After lots of instant pot cooking and lazy cleaning, it still looks good. A quick wipe and it looks as good as new, in its sexy charcoal grey matte look. This is totally one of those home upgrades that are worth it.
We have the Blanco under mount sink with low divide in Cinder. I love the low divide because I can fit huge pans in the sink. I also tend to throw pans and spatulas in the sink and there hasn’t been a scratch at all or a dent.
Spice Rack Cabinet
I love having a spice rack cabinet. I previously had the spice rack on a spinning wheel next to the stove. This was accessible except it collected a lot of grease and dust. Who has the time to meticulously clean each spice and wipe them down with tender loving care every month?
I labelled the spices and organized them to have the ones I use most frequently at the front. I also put other things like soy sauce, cooking oil, salt in the spice rack on the other side. It’s great because I don’t have to put these in a cabinet where they will get the cabinet oily and greasy. The spice rack is made out of wire so it is again, easier to clean.
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Pull Out Pantry Cabinet
I call it my pull out pantry porn. I can spend a lot of time on Pinterest looking at pull out pantry cabinets. It was expensive but being able to see everything in the pantry has been great. I could still organize it a bit better but it’s much better than having deep cabinets where you can’t find anything.
Building a house on a budget, the pull out pantry was NOT cheap but it was so worth it.
Then you end up buying more cans of beans because you thought you didn’t have any. Although in this current climate buying more beans is not a bad idea with the limited grocery shopping during the pandemic.
Ours is a wire rack pull out pantry cabinet. I opted for this instead of wooden shelves that pull out because you can adjust the wiring and it’s lighter to pull out the cabinet. Not to mention you get more space because wire is less bulky compared to wooden pull out shelving. Wire racks are also cheaper than a wood shelving pull out cabinet.
I’m not sure how much it cost for a pull out pantry cabinet because it was part of the overall cabinetry package we paid. It is something similar to this except ours has wire shelving and not wooden shelving.
An alternative would be to stick with shelves that don’t pull out and buy dollar store baskets and label them clearly so you can pull them out of cabinets.
Try Not to Change Your Mind
Finally, one major way to save money when building a house on a budget rests on your own shoulders! Try not to change your mind. When the house plans are drawn up, all the trades rely on it.
When you make small changes to the plans of the house (for example, things not affected by inspection approvals from the municipality) you are still confusing the heck out of yourself and out of the tradespeople. We initially had the sink on the wall but we decided later to move it to the kitchen island instead. The plans weren’t changed (everything was just discussed but not formally changed on paper) and the plumbers were confused as to where to put the pipes etc.
Another example, we put a sliding door in the powder room (but initially in the plans it was just a regular door) because our framer recommended it to be a sliding door. Come time to actually install the sliding door, our framer forgot he had said that (and I did too frankly, only my husband remembered) and our contractor had to remind him with relatively short notice to make it a sliding door. Thankfully he didn’t charge us extra for this because he offered to do it for free previously.
These are my tips so far for building a house on a budget!
Do you have any tips that you’d like to share for building a house on a budget?
Better yet, do you have house building horror stories you’d like to share?
What were some splurges that were worth it for you?
GYM is a 30 something millennial interested in achieving financial freedom through disciplined saving, dividend and ETF investing, and living a minimalist lifestyle. Before you go, check out my recommendations page of financial tools I use to save and invest money. Don’t forget to subscribe for blog updates, a free dividend yield spreadsheet, and the free Young Money Bootcamp eCourse.