Are you planning a budget for a new home? Have you already begun the construction process? No matter where you are in the building process, it’s important to know the basics of budgeting for new home construction in Michigan, and how to stick to that budget. When building a new home, always remember to beware of "scope creep".

“Scope creep” is a term used to describe the mentality of “While we’re at it, we might as well .…” While it seems harmless to add a few hundred dollars to your budget for an upgrade you hadn’t initially planned on, those “few hundred dollars” can quickly add up once you do that a few times. Before you know it, you’ll have added a lot of cost and exceeded your intended budget. Your wallet won’t thank you for those harmless hundreds.

The surest way to avoid scope creep is through careful planning. Follow these four steps, and you will be in good shape to stay within your budget during your new home construction in Michigan.

Step One: Establish a Budget

Establish a target budget before you even meet with your home builder. While it’s unrealistic to assume that this target budget won’t budge, it’s best to have a range within which to aim. Assess your finances beforehand and determine how much you want (and can afford!) to spend on your new home. (If you’re unsure how to approach the budgeting process, Home Building Answers blog offers some helpful advice here.)

Step Two: Meet with Your Builder About Financing Options

Experienced builders will have worked with clients of various income levels and goals and will be able to advise you concerning financing options for your situation. This is the phase in which you can tweak that original target budget to realistically match the market and what you are able to afford.

Step Three: Budget in Upgrades

Recognize that no matter how carefully you plan, occasions for improvement to your original plan will inevitably arise. So build a contingency line item into your budget that you can use to make upgrades to your custom home in Michigan as you go. Think of this as a “fun fund.” If you spend this money while building, you’ll still be within budget since you planned for upgrades ahead of time. If you don’t spend it, then it's a great way to save money on one line item in your budget (and reallocate it to another if need be!). 

Step Four: Trust the process.

Trust your carefully-selected homebuilder. Trust your lender. After a few initial meetings with your builder and lender, you will have nailed down a workable budget. Make sure this budget includes your “fun fund.” Remember that you have worked hard to construct your plan and that you have done so with the help of professionals. You will receive advice on how to stick to your original goals along the way, but your plan can only be effective if you remain determined to follow it. Now you can be sure your Canton, Michigan, home is the home you set out to build.