How To Manage Your Budget

I'm not going to tell you that I know everything about money management–or even that I know anything about it, really. But what I will tell you is this: I've had about a million years experience managing projects for clients at work and I've learned a thing or two from that.

Know Your Budget

Not much will cripple a project like not knowing how much money you have to spend on it. I think there's probably a million clichés about this one so I'll just say this: don't spend money you don't have and don't base your budget on trying to impress anyone else. Work with what you actually have in hand and make sure you leave yourself a buffer for things that might happen that you can't even foresee when you're starting out. One thing that's working in our favor is that we're not getting loans or otherwise borrowing money for this project. I ultimately know the budget because I know how much money I have. I also know how much I can comfortably spend of that money without jeopardizing the financial stability of anything else in my life.

Define Your Goals

For this project, my goals look something like this:

• Make it nice but, not too nice
• Do it fast, without cutting corners
• Get it on the market the second it's ready
• Sell it for the greatest profit possible

Knowing these goals and communicating them to the other people on the project (contractors, etc.) helps all of us in making decisions that effect the budget and timeline.

Establish Your Timeline

With a timeline in place, you can gauge spending. If a project is 6 months long you'll be paying 6 months worth of utilities, etc. If you go over your 6 month mark, your budget has to increase.

If you've been following along from the beginning, our timeline was approximately 8 months from closing to selling. I'm not ready to spill the beans on this one, but I will say that we're roughly on track.

Become Obsessed with Details

• Any estimate that you got before starting work needs to be confirmed along the way. Why? Because things change. On the surface, something may look easy but, when you dig down into a task, you might uncover some unknowns or tricky bits that change the scope of the work. Always ask your contractors, "are we on track?" (because they are never going to come to you and tell you if they are or aren't–if my experience means anything...)
• Always take care of supplies because you may be able to return items that didn't get used. A job site can be a messy place, but if you take the time to stash supplies in smart places where they will be protected from (as many) mishaps as possible, you'll keep the option of returning stuff on the table. Does it really make a difference? In a word, yes. While working on our own house, I returned almost $1000 worth of unused stuff. 
• If you can donate something, do it. It's better for the planet and you can use that as a write off on your taxes. Will this make a huge impact on your budget? Probably not–but "little stuff" definitely adds up.
• Scrap it! We've been diligently collecting all the random bits of metal during the project and hauled a load to the scrap yard just the other day, earning us $340. 
• Keep track. I have this big, color-coded Google sheet where I balance the budget. 

So, am I a money-mastermind? Hardly. I am, however, definitely invested in making sure this project stays on budget.