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11 Ways To Build A Custom Home On A Budget!

11 Ways To Build A Custom Home On A Budget!

Are you thinking about building a custom home but worried that the costs will skyrocket out of control? While this certainly can happen, it certainly doesn’t have to!

In fact, you’re already off to a great start by being conscientious of this potential problem up front!

Platforms like Pinterest can serve as a great source of inspiration, but they’re also a quick way to blow out a budget. So make sure that you take stock of what you need, plan in advance, and stick to your plan throughout the process to stay on track.

With that in mind, let’s jump in to take a look at 11 ways to help build a custom home on a budget.

#1 Be Mindful of Size

When thinking about what your house will look like, its size will be one of (if not) the largest factor of total cost. Make sure to take stock of what you need in a home versus what you want.

A custom home may represent a desire to build a dream home for your family, but it doesn’t take a mansion to make a dream home.

In other words, bigger is not always better!

While this may seem obvious, it’s easy to get lead astray. I was recommended a great book many years ago called “The Not So Big House” that I would highly recommend anyone considering building a custom home to read.

It does a great job of helping you to understand what you really need from a house, as well as what makes it cozy and special for your family. Hint: it’s not a giant home 😉

Keeping the house sized to exactly want you need will help keep the costs low.

However, you also don’t want to sacrifice the space you need for the sake of cost. Take stock of exactly what will be in each room and remove unnecessary square footage where possible.

While this may only remove a small percentage of each room, scaling this approach can lead to big savings!

For example, let’s say that you reduce a house from 2,500 square feet to 2,000 square feet. While that difference of 500 square feet may not sound like a lot, it adds up quickly…

Using easy numbers, let’s say that this same house costs $200 per square foot to build. That means that removing those 500 square feet from the home could potentially save you $100,000!

So, being able to save money on reducing the total size of the house by even just a few square feet will allow you to still be able to stick to a budget without sacrificing in other areas.

Just trim a few square feet wherever possible, and you can save yourself thousands of dollars on the build. 

#2 Don’t Rush the Details

The idea of getting everything you want for the exterior and interior of the house may sound like a great idea when you are getting the work done, but it doesn’t mean that you have to get everything done at the same time. 

Thinking of all the details that you want all over the house might seem like the best idea, but this isn’t necessarily the best thing for your wallet. Some things can be done later on when you have the money saved up to get it done.

Small things like trim around the edge of the roof, accents that aren’t structural, and anything else that isn’t necessary to do right away can help you put off some expenses until later on.

Also, because your tastes could change over time, getting a simpler design will allow you to make changes to adjust to new styles as you evolve. Changing accents like carpets, window hangings, and other decor is much easier!

This also gives you some time to think about what else you might like to do.

Maybe you would’ve had to settle for a trim that wasn’t exactly what you wanted, but with a little time and savings, you will be able to get the exact color and design you want even if it is more expensive.

#3 Stick To Your Plans

One of the areas that can unexpectedly creep up in costs during a custom build relate to changes or deviations from the original construction plans.

Once you’ve got construction plans locked in with your builder, permits in place, materials ordered, etc… there will be excess costs incurred when you change your mind on a previous decision.

In some cases, these costs may be minimal. Say for example, choosing a different paint color before you’ve started painting. However, some changes can cost you a lot more!

Let’s say that you decide that you want to change course and go with a different window style. Well, if the original windows were already ordered then you’ll probably have to pay a re-stocking fee to have them returned.

In other situations, changes may require that work be re-done and increase your labor costs for that portion of the project.

Last but not least, keep in mind that many builders charge change order fees. While the exact amount varies, $500 per change order is not uncommon.

The cost of each change order fee as well as definition for what constitutes one will vary by builder, so you’ll want to pay close attention to this section of your contract.

#4 Choose Cost-Effective Options 

There are many features in a home that can be upgraded until they cost thousands more than you had originally intended to pay. This adds a lot to the final cost of the project and might make it too expensive to even start it.

However, if you look for cost-effective options that still satisfy the design you are going for, then you can save yourself a lot of money.

Common examples include:

  • Level 3 countertop instead of level 5
  • LVP instead of hardwood floors
  • Handmade vs manufactured tile

While the higher end options are always nicer (that’s why they cost more), you should consider what REALLY matters to you inside the home.

Choose to spend these dollars in places that you know that you’ll get more enjoyment from, or where you’re more likely to recoup this money in resale.

It’s generally agreed that the kitchen and master bathroom are great areas for upgrades due to the volume of use that they get and appeal to buyers.

#5 Get Materials Yourself

While buying big ticket items such as lumber is impractical, there are many areas where you can save money during construction by purchasing the materials yourself.

Your builder has set stores where they procure many of their goods, and often pay a premium for that convenience.

For example, let’s say that you’re planning on using a few sliding barn doors throughout the house.

There’s a good chance that the hardware for these doors will run $300 – $500 per set, that you could buy on your own from Amazon or Home Depot for less than $100!

In addition to procuring items like this from Amazon or Home Depot, you can also check discount stores as well. This is often a great way to save big bucks on things like pendant lights and other light fixtures that are pricey at full retail.

#6 Find The Right Builder (For You)

It’s worth pointing out that not all builders have the same goals. Some like to work on a lot of projects, some like to build extravagant homes, and some just enjoy the process of building the perfect homes for families.

Naturally this is a generalization as there are many more types of builders, but the point is that you need to find one whose interests align with yours.

They need to understand what your goals for the house are, the budget, and how much (if any) budget wiggle room there is. It’s much better to be crystal clear and on the same page with your builder before starting construction rather than later.

From start to finish, your contractor will play a huge role in your home. If you have any feeling that leaves you wondering if you should hire someone, then look elsewhere.

#7 Leverage Your Contacts

While your builder often has many of their own preferred vendors, suppliers, and subcontractors, that doesn’t mean that you might not have access to a more cost effective option.

Leverage your own network of friends, family members, neighbors, etc… to see if you’re able to get a discount. While the thought of asking for a discount makes many people uncomfortable, there’s absolutely nothing wrong with it!

You’re offering them new business that they had to spend zero marketing money to obtain, so in effect you’ve already helped them maintain margins. Many of quite happy to oblige to avoid giving the business to a competitor as well.

Every small discount or saving adds up throughout the cost of construction, so never write anything off!

#8 Look for Rebates 

While rebates don’t save you the money up front, you’ll be able to recoup it quickly.

One area that rebates can often be found involve appliance packages. Because these are one of the most expensive items in the house, they represent a great option for savings!

You an also find rebates for energy efficient items such as solar panels, where using these eco friendly options can come with both rebates and potentially tax breaks.

These often apply to energy-efficient products but can offer a range of ideas for ways to get save money after getting money back for a purchase. So, check out any outlets, appliances, solar panels, or other products that can get you money back.

#9 DIY What You Can 

There are likely only a few things that the average person can do when it comes to building their dream house, but there might be at least one or two. If you DIY what you can, then this is a great way to cut costs.

Now, you only want to do this with things that you have experience in, like if you have put in tile flooring and opt to do the small bathrooms yourself. Or, if you want to paint a few of the rooms on your own, then that could lower your overall cost. 

However, leave the big stuff to the professionals. 

#10 Know What’s Out There 

Before you choose a design and stick with it for the duration of the build, you want to know all of your options. From materials, you can use to what types of money-saving options you can add to your custom home.

If you want to pay for solar panels now, then adding this to your home will allow you to save money on your electricity bills in the future. Additions like this weren’t always available for homeowners, so keeping up with the newest technologies and housing additions will allow you to see what you might have missed out on. 

Do your research before setting anything in stone, and even talk to some local contractors to see what any new options are before you settle on a certain design. If one small change could save you a lot of money, then this could be a welcomed addition. 

#11 Know What You Can Spend 

It is easy to go overboard when creating a custom house, but this doesn’t necessarily mean that this will be your dream home right away.

So, using your budget as a way to make smart decisions will keep you from going too crazy with additions and details. 

You don’t always need the extra stuff when you are in the building phases, so planning what you will spend and what your timeline will be can make it easier to stick to your budget.

Also, while you stick to your budget, you can be saving for future projects, so think of the big picture.


Knowing how to build a custom home on a budget is not something everyone can do, since many people like to go with more extravagant materials or accents.

However, if you use these 11 ways to keep yourself to your budget and save money along the way, you can have your home done within your budget.

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Lindsay Reed

Hi, I'm the founder of! I created this website to be a resource for everyone who wants to make the best home possible.