When you’re building a house, there are two very important aspects that you need to pay attention to – time and money. I few months ago I wrote about creating a house construction schedule for keeping you on track with your time. Today I’m going to tell you what I have learned about how to organize your finances when you build a house. This includes first determining your budget, tips for sticking to it, and methods I used to keep track of expenses and receipts.
Tips to stay financially organized. Creating a budget and organize your finances when you build a house
In case you’re new here, last summer my husband and I built our forever home¬†on 30 acres of land in a rural area south of Ottawa, ON. One of the main reasons we decided to build our own house and act as our own general contractor was to save some money. If you know the basics of house construction, and are able to order materials and schedule sub-contractors, you can be your own general contractor. You can save all that money instead of hiring someone else.

1. Creating Your Budget

Before even choosing your house plan and buying a lot you should determine how much you can afford. .You need to figure out your monthly income and expenses, and determine how much you have left over to spend on a mortgage each month. Then get your ducks in a row and arrange an appointment with the bank or a mortgage broker. In our experience, banks will mortgage you for a large amount, but it’s not always wise to mortgage yourself at the upper limit.
Once you have your total budget, subtract the amount that you will spend on the lot, and you’re left with the total construction budget. Houses tend to cost more than you expect, so once you have your construction budget amount, reduce it by 10% to get your goal budget. This will allow room for error and overages “just in case”.
You can determine square foot costs in your area by talking to different contractors or home builders, then with your total construction budget you should be able to figure out the size of house to build.

2. Stick to your budget

I created a budget worksheet that will help you with determining how much each category within the house budget should cost as a percentage to your total house budget. If you have a higher budget, yes you will probably spend more on certain things than if you have a lower budget. As long as everything is in proportion you should be able to stick to the budget. First fill out your total budget and the cost for the land. The estimated cost for each category will automatically be filled in. (The amounts in the picture is just an example, we did not build a million dollar home). Enter your email address below to get your own copy of this worksheet.
home budget worksheet print screen

3. Organizing Your Receipts


Here in Canada, there is a tax rebate when you build your own house. You can get back a certain percentage of all the HST you pay for materials and labor. As a frugal dutch woman, that meant that for every receipt I kept track of and put in my spreadsheet, that was more dollars I could claim.
So every time we bought something, we put the receipt in a box. Each month I would go through the receipt box and enter all the information in my spreadsheet. This included the total amount, the tax on the purchase, the store where be bought it and their tax ID#, the date…. all the information. I used two big binders and taped each receipt in the right category. The Canadian tax forms have about 40 different categories for home building materials. So I made 40 dividers in my binders. When it was time to fill out the forms for the tax rebate, this made it a lot easier to calculate my totals.
Creating a budget when you build a house as an owner builder
These are just a few of my tips to organize your finances when you build a house! If you have any other questions about budgeting or more specific questions about our experience, please leave a comment below or send me an email. I always love to hear from you!

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5 thoughts on “How to Organize Your Finances When You Build A House: Plus a Free Budget Worksheet”

  1. This is so handy Jessica!!! (We’re looking for a home and building one came up! However we don’t have a clue about how much it would cost or even the tax rebates!) Great post!!!

  2. I love how you organized your finances. I work in an office job and you should think I am a pro. But I can’t do filing and stuff in my private life at all. Once I step over my threshold I am in creative crafty mode and can’t be bothered with organizational skills lol.

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