Determining Your Project Budget

(An excerpt from the Paul Rugarber’s forthcoming book Architecture to Construction and Everything in Between)

“Got no checkbooks, got no banks. Still I’d like to express my thanks – I’ve got the sun in the mornin’ and the moon at night.” – Irving Berlin

The project budget is probably the biggest item that gives people anxiety – and rightfully so! I have worked with clients who have large budgets and those who have small budgets. One of the similarities I’ve found is that each client wants to maximize their dollars spent for a return on investment – which of course makes sense! The part that doesn’t make sense, though, is the decisions that are made at times by clients during the process.

The budget is the driving force of the project and the expectations of each client are very different. Personally, I love both the jobs with a modest budget as well as the elaborate jobs with exotic materials and lots of detail. However, you need to keep in mind that these are two very different situations and the owners’ expectations for time spent coordinating and making selections for each are very different – and so they must be treated and priced that way. A $15 door knob and a $250 door knob require vastly different levels of care, precision, and specifications.


The most important item to establish is how much you would like to spend and then understand what is possible for that amount of money.

One of the most important questions I ask my clients has to do with their total project budget. The budget will determine the way the house is designed and built. Put simply, the budget equates to how much time is spent on a project. A simple addition will take a set amount of time and is easy to figure for pricing – but a more elaborate house with a large budget is more complicated. When you tell your architect and builder what your budget is, it should be the actual budget. Be sure to communicate whether it’s a firm number or a ballpark. You should always include 10%-15% for “extra” items and adjustments that need to be accounted for as the project progresses.
The budget will also help you set realistic goals. Many times clients just don’t understand costs and have no idea what the project will cost. In asking local builders or architects about costs, it will help you with your planning. There is no sense in wasting time planning an entire second floor addition with a $15,000 budget. On the other hand, I have clients who say they are planning to spend $2,000,000 but it is not a hard number and getting their wish list is more important than the total cost.
The most important issue for you is know what you want to and can spend and then understand roughly what that amount of money will allow you to build. Of course the quality of construction is where the amounts vary greatly. Don’t ever assume that you are getting the same product when someone quotes you half the price of the other guy.


For those of you that have no idea where to start or what you should expect a project to cost, I recommend discussing this with your architect to get a better understanding before establishing your budget. Even if you are only talking about rough budgets, understand what is included in those prices. Site work and landscaping are often additional costs and interior items such as cabinetry and appliances may be as well. There are always unknown costs so be sure to understand what will not be done and is your responsibility as much as you understand what will be done for the price as they all have to be factored into the overall budget that you create.

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