Creating a Budget and Managing Costs
Creating a budget and managing costs when building your own house is one of the biggest challenges you’ll face. First you have to consider how much cash you want to put into your construction project and what you will be able to afford in terms of your mortgage payment when your project is complete. If you have an idea of what a comfortable mortgage amount will be you can start to get an idea of what you can afford for the total cost of the project.
A good way to start your budget is to use the Construction Manager spreadsheet that I created to take a first pass a what the total cost for your project will be. I left the costs from my project in the spreadsheet to give you a rough idea of what your costs might be. Here are some steps to follow to create a construction budget for your new house:
Decide how much square footage you need for your livable space.
Figure somewhere between $75 and $100 a square foot for your cost to construct depending on the quality of materials that you use.