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How to Build a Budget for Your Custom Home

When building a custom homeeverything comes down to finances. Your budget determines what you can feasibly accomplish in your custom build. It impacts where and what type of land you build on. It influences how big you can go and the quality of materials used to construct your dream home. The budget also dictates whether you can add more features to the design or need to put some on the chopping block.

Since finances have a significant bearing on your project, it's imperative to formulate your custom-build budget as soon as possible so you can make informed decisions during the design and building processes. That's why Bella Giannattasio of GTG Builders, is sharing tips on how to build a custom home budget. 

Watch the video or keep reading!

How Do I Create a Custom Home Budget? 

There are three mainline items in a custom home budget: land, site work, and the house. We'll review what each line item means and how you can estimate a price for them below. But first, we need to cover the cardinal rule of budget making. 

Always base your budget on the worst-case scenario. In practice, that means formulating your budget using the most expensive estimates you get for your line items. Doing so ensures that you don't go over budget. With any luck, your final cost may even end up being less than your budgeted amount, meaning you have leftover funds you can put towards further home upgrades.  

Line Items

These line items represent the costs associated with the custom home-building process


When you build a custom home, finding land is the first item on your to-do list. Search for a piece of property that aligns with your size and location preferences. If you have children, take school districts into account. Look up commute times. Consider whether you want to live in a neighborhood near the city or on a rural retreat. Is your ideal home close to a beach? Or does it rise out of wide-open farmland? Keep in mind that some parcels may require you to demolish an existing structure or develop a raw lot before you can build on them. 

 Find land for sale in New Jersey!

Site Work

Site work prepares a piece of land for construction and creates a buildable lot. What your site work entails depends on the type of property you choose for your new home. If you develop a rural lot, you may have ttear down an old barn or remove trees from your building area. Some properties require building a septic tank, drilling a well, adding gas and electricity, and other utilities. Your contractor will perform erosion control and shoring to ensure erosion can't damage the structural integrity of your foundation and that the worksite remains safe. They also survey the land and perform grading, a process of leveling the ground. Other exterior elements like paving, concrete work, and excavation also fall under site work expenses. 


The next major line item to consider is the cost of your home. Think about the kind of home you desire. Is it a ranch-style, Nantucket, Colonial, or any other particular style? Research the cost of building that type of home in your area to get a baseline for your project. If the cost estimates you find are over your budget, don't worry! You can work with the designer and builder on your project to alter the house plans so they adhere to your price range. You should also take the cost of design into account. 

Budget Resources

Now that you know the line items on your budget, here are some resources that can tell you how much they'll cost. 

blue airport hangar home with large garage in snow by GTG builders in New Jersey


A realtor helps you find a property for your custom build. Tell them your desired lot's features, and they will help you get an estimate by looking at similar parcels in your area. Remember to consistently base your budget on the highest reasonable estimate of a worst-case scenario. 

Industry Partners

Many different costs may be associated with site work. To find out which ones apply to your property, ask around with local industry partners. Your design-builder or contractor will help you determine your site work costs. It can also be helpful to talk to civil engineers, architects and designers, excavators, tree and shrub removal experts, driveway builders, and other professionals to determine individual prices.

Custom Builders

When you work with a custom builder, you don't have to worry about making a budget for your project all by yourself. Your custom builder works with you to determine the appropriate price points for your budget. They'll help you add and subtract line items as they apply to your project and balance your home dreams with your finances. If your initial budget indicates that you need to cut expenses, your custom builder will help you decide whether you should find a cheaper piece of land or alter your design plans to make a more affordable custom home. No matter what your final budget looks like, your custom builder will adhere to it strictly, so you know your new home won't cost more than you planned. 

Plan with a Budget Worksheet 

It's time to apply your new knowledge! Use this worksheet from GTG Builders to plan your budget and guide your custom home-building process. 


FREE Custom Home Budget Worksheet