How to Budget without a Breakdown

BUDGET… potentially the biggest word and point of pain for anyone when planning a renovation or interior design project.

Come to think of it, are there any kind of projects in the world where the word budget doesn’t trigger beads of sweat to spring?

Even as an experienced interior designer, when it comes to building my own home (which I’m currently doing), the word budget makes me nervous. If there is one thing that will derail a design project, or stress the hell out of my clients, it’s this.  

Luckily for you, after years of running construction budgets for clients, and now completing our 4th personal house build, budget is one topic that I have down pat.

SO how can you complete a renovation or build project without draining the bank?

The key is to budget clearly at the outset and STICK TO IT.

Still scratching your head? Ok, let’s delve deeper.

The common reason that causes people to blow their budgets is a failure to anticipate unforeseen costs. There will always be some degree of unforeseen costs, unexpected bills, costly human errors, unavoidable project delays … etc. etc. in your projects.

The list goes on and on, actually.

But let me tell you that you can plan and oversee your project in a way that will absolutely minimise these ‘unforeseen’ costs.

Let’s look at how!

There are two figures you need to know before you get started:  

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  • Firstly, what budget you have available for this project (actual budget) and
  • Secondly, what figure you cannot exceed before over-capitalising (viable budget).  

You may have saved a certain amount that you can justify for your project. You may even be willing to spend everything in the bank. Working to a budget is about doing a realistic and honest appraisal of the project scope, and what that will cost. That means comparing what you want to do with how much it will cost before going ahead. You then measure this total against what you have to work with to see if your project is viable.

Sometimes these figures are the same amount and sometimes one of these figures has less importance. The priority you give each figure depends on the time you plan to stay in the property vs. your bank balance. For example, people who have a budget of $500K but intend to live in the house forever may not mind if the cost escalates to the $1mil mark, as long as they achieve their outcome of creating dream home that will outlive their lifetime.

Either way, it is critical to understand these figures and communicate them with people you engage during the process. Not only could you land in a serious debt situation, you may also get to a point where you have become so emotionally involved in the project (spending actual budget) that you have well exceeded the viable budget and cannot proceed. Ouch!

People blow the budget when they don’t do their research and get second opinions on their quotes.  I recommend looking at all the things you want to achieve in your home before chatting to a variety of contractors and see what the costs are surrounding them. Ask several contractors to get price comparisons and always request a total breakdown of products and services.  Always keep a contingency fund, just in case issues or changes arise so you can be financially prepared.

You set the budget in the first stage of interior design. We call this stage ‘Schematic Design’. This is the critical stage where you set your project brief, define your style, and map out everything that will happen. You create a blueprint for the entire project here. At that’s where budget is outlined.

Measure every stage of your project against the agreed time and budget. People so easily get talked into upgrading features and finishes etc. and then suddenly find their budget is blown!

When your budget is clear, it’ll be easier for you to make decisions between certain design details. There’s always the dream product, but then there’s also what you can afford. Ultimately, what you justify will come down to what is possible.

If you really must use that Calacatta stone that the supplier has just shown you, then what can you sacrifice to allow for this?

If you ask yourself these questions constantly, then you’ll be on track!