Three ways we saved money to build our home
Hi There! Welcome back to Thought2Realty. In this post, I show you three ways my husband and I saved money to build our home. I also give you some more tips to keep a little more money in the bank as you prepare to build your home.
Let’s face it, building a home is an expensive undertaking. The cost of construction, legal fees and not to mention all the costs that pop up unexpectedly; as daunting as it seems, it can be done. We are not advocating that you bite off more than you can chew, but we are encouraging you to find some innovate ways to save those dolla bills!! Let’s get to it!
THREE WAYS WE SAVED MONEY TO BUILD
ONE CAR HOUSEHOLD
We both possessed cars when we got married which meant we had two times the expenses for a car – insurance payments, gas, repairs and maintenance and car payments (his payments were paid off at this time) but you get the picture. This was just not feasible for us.
My husband and I work very different hours. I work standard 9:00 to 5:00 and my husband can work until as late as 11:00 pm. It would be way easier to have two cars but we opted not to. We decided that I would pick him up when he works nights if he doesn’t have the car and the other days he would ride his bike or take public transportation.
We sold my husband’s car shortly after we got married. By doing so we were able to save:
- Insurance per annum – $1,600.00BDS
- Gas per month- $400.00 BDS
- Servicing every 6 months – $100.00 BDS (He did the servicing himself, so this was just the items to service).
- Car payments – Nil. The car was paid off at that time.
- Unexpected Expenses – $250 per annum (The car had some age on it)
The quick math on this would be $6,850.00!! We were shocked too, which further pushed our decision to sell. Sometimes putting expenses on paper really puts things into perspective.
If you are struggling with a decision of whether or not to sell a vehicle, sit and do the math to determine your position. Map out the expenses you would no longer have if the vehicle is sold. In addition, your immediate savings would be the money you receive for the vehicle.
LANDSCAPING
We took the route of building our home from the ground up, which means we acquired land to make this happen. We finalized our land purchase in 2019 and we hope to begin building soon. As such we had to maintain the appearance of our property during this time, one major cost to consider is landscaping fees.
Landscaping would cost us $120.00BDS. We would have to do this at least every two months, which would be six times (6) per annum. This would total $720.00BDS.
We decided that it would be better to rent a weed wacker and cut the grass on our property ourselves. The rental cost of the weed wacker is $35.00BDS, for 24hrs. This meant that we would have to rent the wacker as early as possible so that the job could be finished by the next day. However, we discovered renting it on Saturdays would give us an extra day to complete the landscaping, and allow us to return it on Monday morning.
- We would have spent $720.00BDS on a third party hire.
- When calculating how much we would spend on renting the wacker and cutting the grass our selves, our total was $35.00BDS*6 =$210.00.
- Our total savings would be $510.00BDS.
MOVING BACK HOME
This was the biggest decision we made to date and the one which probably saved us the most money towards building our home.
Before we began building, we looked at our budget and decided that we could save more money if we stopped renting and moved in with our parents. Yeaa!!! This was a long thought out decision, there were many other factors that were at play other than saving money. Factors which we deemed as priceless. Needless to say we believed it was the best decision for us.
We talked to our parents (my inlaws) and they agreed to let us come and live with them until our home has been completed. We agreed to make a contribution to the existing household of $450.00BDS.
Our living expenses included rent and utilities, the breakdown goes something like this:
- Rent expense $1,112.00BDS (this includes payment for water)
- Utilities $185.00BDS
- Total living expenses $1,297.00BDS
- Live in contribution $450.00BDS
- Total savings $847.00BDS per month
OTHER WAYS TO SAVE OUTSIDE OF WHAT WE DID
EXISTING INSURANCE
Do you have an existing life insurance policy? If you have one before you make your real estate purchase, it can be used as collateral for your land or home purchases.
Unless the policy amount is less than what you require as collateral, we believe it makes no sense taking out an additional policy, thereby adding to your existing budget. As long as the policy is a whole life policy or term life policy, it can be used.
This is something we wished we had thought of before. We took out another insurance policy to use as collateral for the purchase of our land.
This policy costs us $47.00 per month and this has to be paid for the duration of the loan and even thereafter, but we will use the duration of the loan as an example, which is 25 years. This totals to $47.00 * 12mnths = $564.00, for 25 years this totals to $564.00*25yrs = $14,100.00 incurred from making this decision.
COMMUNICATE EFFECTIVELY WITH YOUR DRAFTSMAN
This point has longer reaching consequences that those discussed above.
We were so excited to communicate all the ideas we had for our home to our draftsman, so excited that we did not tell him the building budget we were working with. This did not cost us physical money as much as it costed us time. Don’t get me wrong, we believe in the saying “taking time is not wasting time”.
Luckily for us, the structure which was drawn did align with our building budget. Had this gone the other way, we would be fronted with a number of spin-off costs such as higher draftsman fees, higher insurance costs and possibly not qualifying for the construction loan (mortgage) to build our home. Remember, communication is key with your architect or draftsman.
CONCLUSION
I hope these tips were helpful to you. These are some of the more unusual ways we saved money to build our home, which freed up more of our disposable income. What are some of the ways you save towards your home? What kinds of strategies have you implemented or thought of implementing to save additional money to build or buy your home?
Remember it is better to be somewhat prepared for this undertaking than to make no preparations at all. You will be glad you did. We wish you the best of luck!