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Strategies for Setting a Home Design Budget

June 5, 2017

Get exactly what you want while staying within your budget.

Building a home last year was an education for my husband and me. We had never even bought a home much less built one. Working with the builders, picking out finishings and being involved in the details of every decision was sometimes overwhelming. Thankfully, my husband had experience negotiating contracts and I had experience managing projects. However, the best lessons we learned were how to manage our money to get exactly what we wanted while staying within our budget.

The number one lesson I learned for managing our money when building a home is to negotiate as much as you can into your contract before you ever break ground. That will keep everything clear from the get-go.

Once the contract is signed and the decisions need to be made there are two strategies I’d recommend for making sure you get what you want while still managing your money wisely. I’ve boiled them down into two methods I call the “Bucket of Money” strategy and the “Price Per Item” strategy. We used both strategies at different times so choosing which to use really depends on your circumstances.

Bucket of Money Strategy

The “Bucket of Money” strategy is when you have a certain amount of money to design a space and everything you select has to fit within that bucket. For instance, we were given a budget for our light fixtures that was 1% of our total sales price. That meant that for $X every light from the kitchen and dining rooms to the bathrooms and the hall lights had to fit within that amount.

The builder’s design consultant gave me a list of every light fixture inside and outside of the house and told me the lighting company to use. Then I worked with their sales team to select every light fixture for the house. Using the Bucket of Money strategy allowed me to make “weighted” decisions when it came to selecting light fixtures. I was able to spend a little more of the budget on the kitchen island lights and a fancy ceiling fan and save money on hallway, closet and guest room lights.

  • Pro: The Bucket of Money strategy allows flexibility to splurge here and save there and still stay within the budget.
  • Con: Once the bucket of money has been spent it’s gone. So if you’ve found 7 out of 10 of your wishlist items for a room but the bucket is empty, you have to live without those remaining items.
Price Per Item Strategy

I used the Price Per Item strategy a lot when we were selecting things for the house like tile and mirrors. The builder already had a budget per raw material and pre-selected options to choose from, but sometimes I didn’t like their options. So the design consultant told me the budget per item and I worked directly with the contractor to select the materials within our budget.

For instance, when it came time to pick tile for the house I didn’t like the options so I got the budget for tile per square foot and worked with the tile company to select materials in their inventory that fit within that budget. It took  lot of legwork on my behalf but it worked out for everyone in the end.

  • Pro: The Price Per Item strategy gives you a lot of control over the budget. With so many stores and online businesses selling good materials, you can almost always find what you like and stay within budget.
  • Con: This strategy can be much more time intensive on your behalf. I scoured the stores and the Internet to find what I wanted that matched our budget, but then I still had to negotiate with the tile contractor to match the price.

Both of these home design budget strategies helped us get the design we wanted for our home while staying within our budget. We started our design process by negotiating all of the non-standard items we wanted in the house – marble countertops in the kitchen, for example – into our contract before signing. That was the most important step to getting what we wanted while maintaining our budget. Of course, it took a lot of back-and-forth between all parties but once we started building and design decisions had to be made, the Bucket of Money and Price Per Item strategies were extremely helpful for getting exactly what we wanted without going over budget.

What are your tricks for making and sticking to a budget?

Joie de vivre and happy budgets,


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