Is it actually possible to build a new home on a budget?
That’s the question we asked ourselves over two years ago when we were knee-deep in planning the construction of our new home. We had plenty of experience renovating homes, but this would be our first time building a home from the ground up.
We had a lot to learn.
In the time since, we’ve actually done what we set out to do – move into a home we built ourselves. And do it without incurring any debt. (The majority of the building was done by Ryan and our family and friends. We did hire a few contractors for projects that needed additional expertise or were on a time-crunch.)
This gives our family so much financial freedom for our future. But that doesn’t mean it’s been easy. Or that everything went according to plan. (It didn’t.)
But I’m nothing if not an open book. And I’m back to share what we actually spent building our new home.
When it comes to building a house, the final price can truly be all over the board. You can imagine that every little choice we made had an impact on the bottom line. And as you begin to build a home of your own, the same thing will be true. But I have had lots of questions about how we actually did with our original budget we shared.
Were we able to build the house for $125,000, as we planned?
The short answer: Nope.
The actual cost we paid for our home was just over $157,000. (So if you are doing the math – that’s $32,000 over budget. Or more than 25 percent over budget.)
That’s not pretty – and we could wallow in shame that we went over budget so much.
Or, we could remember that we just built a brand new home for $157,000. Which is far below the cost of an equivalent new home in our area. And it’s actually far below the cost of an equivalent home here PERIOD.
And that doesn’t even take into account the location and the land. So, we could have paid more for a pre-existing home in our area that we didn’t love as much. Which wouldn’t make any sense.
Instead, we’re choosing to celebrate. And we’re also choosing to be open and honest about where we didn’t hit the mark on our budget. We know you’ll be gentle and kind to us.
A big disclaimer: The cost of our home was very specific to us. There are thousands of things that could impact the cost of your home – the city you live in, your style and preferences, and whether you’ll be hiring a builder or doing some or all of the work and planning yourself.
And as always, the larger of a house you build, the more you’ll be paying.
You may find that you could actually trim the budget in places. Or you may find that there are areas that you’ll spend more. That’s the beauty of building your own home – you’re the boss.
With that said, I hope this can give you a realistic idea of the breakdown of a real-life home. And I hope it encourages you that with a little work, you can build a home on a budget.
The home we built
The cost of any home will be determined by the size and style. And while I don’t necessarily put a lot of stock into cost-per-square-foot, square footage will impact your total cost.
We stuck pretty close to our original house plans – which were designed for us from a local draftsman. While some small changes were made, the square footage stayed the same.
The finished square footage is 1580 square feet.
The plans also include an 840-foot unfinished (exposed) basement, an attached two car garage, and front and back covered porches.
The breakdown of our building budget
For those visual types, here’s the overall breakdown of the building costs. (Compare with our original house building budget here.)
And here’s another look at the overall pie – with how each slice was actually allocated.
As we noted in the original budget post, there are a variety of expenses that are not included in this budget:
- Running electrical
When be bought the property, we ran electrical and dug a well and septic system. These were all part of initial costs while we built the barn and are not included in the house cost.
Because we live in a rural area, we have an exemption that means we aren’t responsible for pulling permits. This is a huge cost and time savings. (Note: we are still responsible for building everything to code.)
The biggest reasons we went over budget
There were a lot of reasons that the final price was higher than we anticipated, but the biggest was that we simply didn’t account for a lot of expenses in that initial budget.
Here are a few of the biggest reasons:
Our original budget only included the quoted amount for the framing, millwork and lumber. What did that miss? Everything else – including doors, hardware, tools, interior doors, and extra supplies.
This was a huge miss on our original budget. But while we certainly should have increased this, we never would have imagined that all those hardware trips could add up to the tune of $20,000. Every time we went to the store for framing nails, tarps, or additional lumber, it was adding up big time.
Things we missed in the original budget
There were also a variety of things we didn’t even include in the original budget – and while we allotted $5,000 in the budget for overage, this didn’t come close to covering these oversights. The total overage for these oversights were around $14,000 (yikes!).
- Equipment rental
- Garage door
Because of these overages, we did have to wait to finish some parts of the house – like the front and back porches. By waiting, we could save the money to afford the projects without dipping into our other savings. But every little thing caused our overall budget to go higher.
Where the budget was right on
The good news is that we didn’t go over budget across the board (thank goodness). Many of the line items were very close to the original budget, with a bit of variance over and under.
- Exterior windows and doors
- Electrical supplies
- Plumbing supplies
While these may have been over or under by a bit, they stayed fairly close to our original estimates.
What we would do if we did it again
It’s true that hindsight is 20-20, and building a house is no exception.
By knowing the things we missed and overlooked, we would have a much more accurate budget to start with if we were to do it again.
We would also have been much more careful about all those little extras – seeing how much those building supplies added up, we should have done more shopping around and buying in bulk to save some money.
But, for now, we can just enjoy the home we’ve built. And since we have no plans to do it again, we hope that our oversights can help you plan better for your own projects.
What’s your biggest question about our home building budget?
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