The importance of proper budgeting when building your first home

The importance of proper budgeting when building your first home

Experts claim that most people have extremely poor money management skills and therefore they are unable to achieve their goals in life. If you are planning to build your first home and you are poor in time and money management, it might be really challenging to achieve your dream home. Budgeting is an integral part of the construction journey and it has to be applied at all stages of the process. Without much emphasis, proper budgeting must, by all means, be given careful consideration and this is why.

Working by priority

Just like a household budget, a budget for your construction project helps you to plan which things to be handled first. In other words, it allows you to organize and give some order to your schedule of work. For instance, do you pay land rates first or have construction materials? Do you pay a deposit to a contractor or clear a pending balance on the land?

It must be noted that construction is indeed a multi-faced undertaking and there are competing needs just like in general life. Without organizing your thoughts, actions, and money accordingly, you are likely to land into deep financial troubles.



Budgeting shows your deficits

It is said that you cannot budget for the money you haven’t earned. In this case, we assume that you have some savings and you are ready to kickstart your project. With the help of a construction expert, preferably your chosen contractor, it is advisable that you go through the preliminaries and decided on a number of things. This will give you a rough idea of how much would be consumed at each phase. For instance, you are able to know how much clearing the ground would cost, the cost of laying the foundation and so on. The other equally important part of this process is that you are able to establish any deficits. If you allocate a certain amount for the foundation and the money is exhausted before you are done, do you wait until you save a little more or do you tap into money meant for the next phase? Such considerations help to guide your project without unnecessary constraint

Source cheaper but quality options

Budgeting, when done appropriately, gives you a clear estimate of how much you expect to spend at any phase and ultimately at the end. This allows you to shop around for cheaper options that give you value for money. Naturally, when people have huge sums of money at their disposal, they tend to spend excitedly and with less caution. A budget eliminates this risk and places options in your eyes.

Ask questions such as these among others: Can I get cheaper materials but with good quality? Is there an alternative or more affordable labour? What can I suspend for later from my list? How do I land on the most suitable expert builders?

The importance of proper budgeting when building your first home - building a home

Seeking alternative funding

Construction projects can be financially strenuous. Mortgages are a common way of financing home ownership but can end up being a burden. Working with a well-articulated budget helps you to be open to various sources of funding. This eliminates the challenge of getting financial hurdles that block your progress in the future as you compare to market rates.

Properly laid out schedule

When budgets are properly laid out, work can be broken down into achievable milestones. This is done by allocating a given timeframe within which various tasks must be complete. Considering the demands brought about by any construction project, budgeting makes your work stress free since you know what you want to achieve within a given time frame. This step by step layout helps you to scale up the ladder and sometimes you achieve so much in a short time that you surprise yourself.

It’s really doable!

Life requires that you layout a certain plan. Budgeting for your first home is objectively narrowing down to your vision and making tangible steps to achieving your dreams. This makes your goal more realistic and you get several ways of approaching it.

On the flip side, failing to budget for your first home will lead to unprecedented challenges along the way. One of the common failures that result from failing to budget is the possibility of your project stalling in the middle. Even when your source of money seems solid, any investment is massively boosted by a clear guideline and budgeting is one sure way of doing it.

Conclusion

There is no single way of building up your first home. You can give it any approach you find suitable. However, some elements remain the same and you can only ignore them at your own risking. Budgeting is one of these elements and should be done properly. While at it, seek expert advice and where necessary involve your contractor.


By |2018-10-12T12:14:00+00:00October 12th, 2018|General tips|0 Comments

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