Budgeting for your project

Project budgeting is one of the most important parts of any building project. Setting realistic expectations and budgets will ensure you head into a project feeling confident of a positive result.

Changes to the plan, unforeseen circumstances and time are common reasons why a building project can go over budget. The more decisive you are in the early stages of a project can help with more accurate budgeting. If you have engaged an architect or draughtsman to design your project for you then make sure the completed plans are exactly what you want as changes down the road can be costly.

Here is a few tips to keep costs on track.

Get quotes

To help determine a solid budget you need to think of all the the different people and processes you will need during a project. Start researching what and who is involved in completing those tasks. Most good tradesman will be happy to offer some advice or be able to point you in the right direction.

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For example a bathroom renovation could involve a builder, plumber, electrician, tiler, painter, plasterer. If you can get quotes from each of these trades you will have a pretty good idea of what to budget for your project. Quite often a builder will have relationships with other tradesman and can recommend them to a home owner.

Again this is where decisiveness is important. The more detail you can provide to a tradesman the more accurate their quote can be. A quote will generally be higher if the tradesman has to allow for unknown aspects of a job. If there are unknowns some tradesman will not include the necessary work required resulting in an attractive initial quoted price. If this is the case you should make allowances for what extra work will be needed and include this as an allowance in your budgeting.

Whilst on the subject of quotes it is important to check quotes for what they allow for. Make sure you get as much detail as possible in writing. This will allow you to make sure you and your tradesman are on the same page. It will also allow you to compare competing quotes more accurately.

Stick to the plan

Once you have determined what you want the final product to look like and received quotes for the work required you will have a pretty good idea on the cost of your project. Now it is important to stick to the plan once the job commences. Any change to the design could require adjustments to the scope of work in the form of variation requests or change orders.

Often a tradesman has pre organised materials, subcontractors and/or deliveries ahead of time and a change to the design can throw this schedule out. Scheduling is one of the major challenges in the construction industry. A tradesman may plan his weeks ahead of time to be able to meet client commitments. Any change to the plan can throw this schedule out. A quoted price is reliant on being able to get the work done in a certain time frame. Changing things could possibly result a scheduling domino effect resulting in additional costs. It is frustrating and costly if someone has to redo work as a result of a plan change.

There are different construction and installation techniques for different types of materials. Work done in the early stages of a project may be setting up for materials used later in the job. Even though is hard to be thinking about whats happening 1, 2, or 10 weeks ahead it is important to know that minor changes can have flow on effects. If in doubt ask your project manager how changes will effect the work already completed.

Allow extra cash for project budget variations

If you are still tossing up design aspects around your project then it is important to allow a portion of your budget for changes in design.

Another important consideration in potential variations to a project is how old and what condition your property is in before work is to commence. A house that is 100 years old has a higher chance of needing unforeseen remedial work. A 10 year old house built using modern construction techniques will likely require less addition work.

Therefore it is important to set aside about 10-30% (or more!) in addition to what you think the whole project will cost. Often a builder will be able to offer some guidance on what may be required.

You cant do too much planning in the early stages

At the end of the day it all boils down to how well a project is planned. A little extra time spent planning in the early stages can result in a solid budget you can rely on. The excuse of ignorance is taken away by the internet and its ability to be used to find information on different products. Researching information and potential costs of different products will allow you to understand what is involved. Leverage your tradesman’s experience to help with decisions on products or techniques. They may have worked with products before which they can recommend. A good builder can guide you through this process and offer advice during the planning stages.

Do your research! The more you know the easier it will be.

Check out Quotes vs Charge Up for more information on the different ways to structure your building contract.