Managing The Budget

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There will come a time in every project when we need to reevaluate the budget as the project progresses. As with any project, once the building starts the take shape and form, the owners tend to get over enthusiastic and excited, and start to implement minor changes here and there. Sometimes the specifications are upgraded from the initial budget, but what we don’t realize is that every little change, no matter how small, will have a cumulative impact on the overall budget and cost at the end of the day.

So how do we start evaluating the budget? The first step is to list down every change that has been decided upon, and to itemize each item to their specific categories, so we can assess how much difference in price each item has gone up or down.

The second step is to trim the budget consciously by getting rid of items that while it may be nice to have are not strictly necessities. And finally, to value engineer the budget by thinking out of the box on how to cut cost while maintaining the aesthetic and design intent.

STEP 1 – ITEMIZING THE BUDGET

Think of this process as the “shopping list”. Every decision made will have a cost impact. For example, if you wish to add a new floor to any existing space, the cost associated with the floor is not as simple as just a new floor structure, but rather the cost of the structure, screeding and finishing works. This is just the physical aspect of the space itself. The subcategories would include additional lighting and electrical works, and even increased air-conditioning requirements.

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For walls, we need to consider all costs that are associated with the walls, such as plastering, skim-coating and painting. But even more, the interfacing of the wall with the ceiling and floor, which will have cost impacted into these elements too. So, imagine when you add a toilet, the space created is generally not large in context to living areas, but the cost associated with a toilet is exponential in nature.

For example, if you are thinking of adding a new toilet to your home, be reminded that the cost is not as simple as putting new walls and finishes to the space but the need for a new heater, plumbing works, waterproofing works and sanitary wares. And as mentioned before, every little thing will add up, and before you know it, it can become a shock to the overall budget.

STEP 2 – TRIMMING THE BUDGET

Once we have gone through the process of wanting everything under the heaven and moon, reality will sink in and we have to make that decision of what we really want, and does it make a difference if we don’t have it. To make the right decision, we need to understand one’s lifestyle and how we want to live, as well as how we may plan to entertain. For example, imagine you have a guest bedroom adjoining the living room and there is a provision for a separate bathroom for the guest bedroom. Do we build a new powder room or toilet for guest, or do we add an extra door and use this one bathroom as a shared toilet?

We need to then think if privacy is an issue. Or whether we entertain enough that warrants guests having their own separate toilet, or even if we have enough house guests to warrant having a guest bedroom. All these questions will allow us to make our minds on whether we want to add a new toilet or not. A simple decision that can help you save or set back a few thousand dollars or more.

Similarly, think about the kitchen. Do we need to have two sets of kitchens, or should we merge the spaces together for an open plan concept? The final decision depends on how you cook and entertain versus how the house is run. I have seen houses where the bulk of the cooking is done at the back, so the back kitchen is just as big as the front therefore requiring equal status in the type of equipment used and space.

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And similarly, the back kitchen can be a small niche used mainly for outdoor cooking and prep work, while the dry kitchen is used for the final dish preparation, entertaining and cooking. Remember, while it is nice to have the best of both worlds, every square inch equates to cost. Think of what you really need and what you can make do without.

THE FINAL STEP – VALUE ENGINEERING

Everyone will have to go through this phase of value engineering to bring the budget back to reality. Now that we have decided what we really want, we need to make sure the price is justifiable. For example, let’s take a simple item such as hardwood timber flooring. Depending on the thickness, there is a substantial difference in pricing. Or even the width of the timber planks, such as 115 versus 140mm. So while it is nice to have a hardwood timber floor, the possibility of having a timber floor in a smaller width and in random lengths will have a major impact on the cost versus timber floors with premium lengths.

Similarly, with marble, let’s say you compare white Ariston with Volakas marble, there is an obvious difference in the look due to the veins, but the cost difference can be close to double. Other options would be to use marble effect tiles, as while the cost of the tiles may not be cheap, the savings you get from the installation will be an impact to the wallet.

This applies to every item in the building, from materials to even design on the windows. For example, by lowering the height of the sliding doors to a regular height, the cost in the door will eventually have an impact. Therefore, the secret in an effective value engineering is to try to massage the budget enough such that you still achieve the desired look you want without the hefty cost associated with it.

So when in the midst of building your home, always keep in mind that every change, no matter what it is and how small, will have a cost impact on the budget. Make sure then to keep an itemized summary, so you can easily identify what is essential and what is not, and what fits within your budget. Whilst it is nice to have everything, it is not necessary, especially when cost is a factor in building your home.

For Interior Design services and consultancy, contact Chris Yeo at chris@eminentbuilders.com