How to use your new home build budget wisely

Wendy Roberts
Written by Wendy Roberts
Russells Consultant
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Building a new home is a big investment so you want to get it perfect. Here are a few tips on where your budget could be best used, how to get the most out of it, and things commonly missed when budgeting for a new home build.

Establish a budget

Ironically, the first thing people often don’t quite get right is the actual budget! There’s no point having a beautifully drawn up plan of your dream home only to take it to a builder for a quote and find out it’s more than you can afford and you have to start scaling back.

To determine how much you can (or want to) spend you could choose to establish a cost per square metre, either for the whole house or room by room. Or, work out what you can afford to pay back; a good rule of thumb is that it shouldn’t be more than 25% of your stable monthly income. Most importantly, ALWAYS factor in a contingency. Whatever you think it will cost to build, add at least 10% for surprises.

To get an idea of how much things might cost you can get some ballpark figures on things like cladding, flooring and painting at using their cost estimators. They do vary widely, but at least it will give you an idea of where you’re comfortable price-wise before you go shopping around.

And this budget calculator from is helpful too as it provides a long list of the different parts of a new home build that will need to be accounted for.

As well as the physical house, part of your budget will be allocated towards making it livable and comfortable; things to consider will be flooring solutions such as carpet or vinyl, heating options, window furnishings and paint or wallpaper. While these are necessities, it can be easy to go over budget by choosing something more extravagant than is needed.

Invest where it matters

It’s a common mistake to get excited by the pretty new things you want in your home and you can easily waste precious budget on them. You’re better to splurge on things that improve your quality of life as opposed to things that just look good. A good example is a heat transfer and ventilation system; you’ll never be able to see it but it will make a remarkable difference to your life and is worth spending good money on.

Other examples are materials and things that are energy efficient and will reduce heating and cooling costs for years (top notch insulation for example). They may by a big cost initially but will pay for themselves (maybe even save you money) over the life of the house. A good way to work out where your money is best spent is to determine what are ‘must haves’ and what are just ‘nice to haves’.

Plan and re-plan

A good way to make the most of your budget is to start with a good plan (of course!) but to also review it as the build progresses. Walk through your build, re-evaluating and reassessing how traffic might flow and where you might put items of furniture. This will help determine if things like lighting and electrical sockets are indeed planned for the right spots. The earlier on you can make these decisions the better as changing things too late often incurs extra costs and eats into your budget.

Bonny by James Dunlop in Eggshell

Use your “space budget” wisely

Just like you have a finite amount of money, you have a finite amount of space. Once it’s been allocated and the build is complete there’s no going back without spending a lot more money. What rooms do you really need? If a room is just there because it’s a ‘nice to have’, there’s every possibility it will only become a dumping ground/storage. Make sure rooms that won’t be used often are multi-purpose. By all means, have a couple of spare bedrooms, just ensure they can easily transition for other purposes like a sewing room or home office.

Think about where you’ll do most of your living and budget for space there. For instance, do you really need a huge bedroom and walk in wardrobe or could those extra couple of metres make a bigger, better difference in a kitchen/dining area?

Another thing to bear in mind is that for every extra room that won’t see much regular use you will still need to decorate, eating up budget in flooring, heating, lighting, window coverings and paint or wallpaper. If you are building on a very tight budget, you could consider leaving these rooms to be decorated at a later date.


Another common mistake people make during a new build is not thinking into the future. When designing your new home take your current lifestyle and habits into consideration as well as thinking about how long you might be living here and what life will be like then. What might your needs be in 5, 10, even 20 years time? Will this build cater for these? It’s better to use your budget now while you have it to include things you know you’ll need in the future. Especially when it comes to storage. Don’t build storage based on the stuff you have now. More often than not we gain rather than reduce our possessions as life goes on.

Budget for labour and professionals

Lots of builders nowadays offer fixed price contracts but a common mistake people make is to not ask what is included in that fixed cost and what is not. Often extra costs happen when certain materials aren’t available and have to be changed. That’s where your 10% contingency budget will come in handy.

And be honest with yourself about what you can DIY and when you should hire professionals. If you make a mistake it’s doubly costly as you might need all new materials on top of having to pay to have it fixed and redone all over again. Which leads to the next point…

Research, research, research!

Ask other people, turn to the internet, and spend time shopping around for quotes and info on the best people and materials for the job. It could be a difference in the thousands!

Cannes by Nettex in Pearl

Lighting & electricals

These two areas are SO important and fall into both the ‘must have’ and ‘nice to have’ categories. Better to budget for essential lighting first and make it good quality before you splurge on under-cabinet lighting in the kitchen. Windows are part of this area too. There should be at least one in every room to let in natural light.

Plan and budget for plenty of electrical sockets around the home. You’d be amazed how much freedom this gives you when arranging your furniture.

Will you need new appliances? And what about an alarm system? These are sometimes missed in a new home build budget.

Landscaping & outdoors

This is an area with a lot of leeway in the budget. What you will definitely need are pathways to and from the house so as not to bring in dirt, and possibly a driveway to keep the land in good condition. But if you need to save money in the budget things like fences and landscaping are ‘nice to haves’ and can be addressed over time.


Part of a new build and perhaps one of the more exciting parts, is planning your interior décor. Once it’s time to get started, download our budget planning spreadsheet to help make the process easy and keep track of your spending.


A nice new home may come with an increased insurance bill so get a quote before you move. You may also want to shop around for a new insurer.

Other costs to consider


Legal fees

Bank fees

Moving costs (eg. hiring movers or a truck to do it yourself, services connection fees etc.)

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