House-building budget: template and common mistakes

Three numbers per item

For every item keep three numbers: the estimate (what you budgeted), the actual cost (agreed or invoiced) and what has been paid. The gap between estimate and actual tells you whether you are heading over budget. Paid and remaining tell you how much cash you need ahead.

A simple template

Split the budget into packages that follow the build. A common split is:

• Plot and purchase costs
• Design: architect, consultants, geotechnics
• Fees and taxes
• Groundwork and foundations
• Concrete and masonry / structure
• Roof
• Windows and doors
• Plumbing, electrics, ventilation and heating
• Kitchen, bathrooms and interior finishes
• Outdoor areas
• Contingency

Each package can hold several items, for example one per supplier or contract. Link the item to the supplier so contact details, quote and payments stay together.

The most common mistakes

• Budgeting only the construction – and forgetting fees, connections, outdoor areas and furniture
• Using a price per square metre as the budget instead of going item by item
• No contingency, or one used up before the groundwork is finished
• Not updating the budget when quotes arrive – and living with old numbers
• Mixing currencies without locking the rate on the day of payment
• Changes agreed verbally on site and never written down

The contingency

How big the contingency should be depends on how settled the project is. With finished drawings, known ground conditions and fixed quotes it can be smaller. With rock in the ground, an old building to demolish or many open choices you need more. Watch how much of the contingency has been used – it is an early warning.

Payments and cash flow

Many building contracts are paid by progress. Put the payment schedule in the budget and record every payment with its date. You then see both what the house has cost so far and how much you need available in the coming months – especially important with a construction loan.

If you pay in another currency, for example euros from a foreign account, lock the rate on the day of payment. The total then stays right whatever the currency does later.

Example: one item from start to finish

Take the item "Windows and doors". From the drawings you budget an estimate. When quotes arrive you choose one and enter it as the actual cost – perhaps a little higher than estimated because you chose better glazing. The supplier wants part at order and the rest on installation; both payments are recorded with their dates.

You then always see three things: that the item runs slightly over budget (and why), how much has been paid, and how much is left to pay – and when.

When to update the budget

A budget is only useful if it is up to date. Go through it:

• When you get a quote or sign a contract
• When a change is agreed on site
• Every time you pay an invoice
• At each milestone – foundations, weathertight, moving in
• At least once a month, even when things are quiet

Make it easy for yourself

In MinePlaner you keep the budget per package and item, with estimate, actual, paid and remaining. Costs in other currencies are locked at the rate on the date, winning tenders move straight in as the agreed cost, and you can get a rough estimate per package from the drawings. The budget can be exported as CSV.