We got the new budget…

We got the new budget numbers yesterday, and they aren't good. They were very big (about $100K over the high end of our previous estimated range), and as a result, I spent most of the rest of the day feeling panicked and queasy.

It's not Pam's fault, as far as we can tell -- just that the scope of the project expanded from the original version. Which we knew would affect costs, but we didn't realize just how much some things cost; we didn't understand that adding a second story to the rear addition would require very expensive concrete foundation, for example. So now we're trying to figure out what we can cut. The pizza oven ($20K) is gone -- that was easy, since we never quite believed we could afford that anyway. The conservatory ($40-50K) is gone, which is harder, since it really would have been lovely. But it's an extra room, one that isn't necessary. My tropical plants will survive in sunny windows, I think. We almost certainly need to cut something else -- unless we want to severely curtail our discretionary spending. If we cut almost all of the following, for the rest of our lives, could we be happy?

  • eating out (which we don't do much, but this includes coffees at cafes, lunch on campus, etc.)
  • buying books (there are still great libraries)
  • watching cable (we'd still have Hulu / Netflix)
  • buying craft supplies
  • taking craft classes
  • buying clothes (beyond the minimum to keep us decently dressed)
  • buying toys (they have a lot already, and they have grandparents)
  • travelling (aside from conferences)
Losing all of that would certainly leave a lot of time for cooking, writing, and math. (In theory, we could cut childcare instead, but that would cut into our sanity, so that's not currently on the table.) But Kev thinks we'd likely be frustrated and unhappy about it.

Alternatively, we can cut part of the house. Probably the easiest cut is the second floor laundry room (have one in the basement instead). That may not be enough, though. So then it gets harder. Various reconfigurations (in rough order of undesirability) might include:

  1. Kevin and me sharing a home office (we tend to work at different times, but not always)
  2. Me sharing an office with the guest bedroom (probably can't fit a queen-size bed + desk in small room, then -- so sell ours and get a full-size daybed, which is less fun for couples who stay with us)
  3. Us giving up a master bath and a lot of closet space (going down to one small closet in our small bedroom, plus maybe a dresser squeezed in; bath would be shared with guests, not kids)
  4. Me sharing an office with the front parlor (but probably not, since I think the kids would be really unlikely to leave me alone if I was on the same floor with them)
There are other possibilities (like moving the kids down to the second floor), but I mostly think they're bad ones. Kevin is brainstorming layouts (apparently, mathematicians are good at that), and he is mostly leaving me out of that because I am just too upset about all the potential losses of things we were excited about having to handle it. Right now, I need to step back, focus on my schoolwork, and let him crunch numbers and layouts. Hopefully, he can come back to me with a few decent options, and we can choose what we can stand to lose.

We could, in theory, borrow enough money to go with the original plan, and just expect that in the rest of my writing career, I'll probably sell a few more books, which would let us pay the loan off. But a) that doesn't allow for cost overruns. And b) there is no guarantee that I will ever sell another book. As much as I would like to bet on my abilities as a writer, I don't know if it makes sense to also bet on the publishing industry agreeing with that estimation.

7 thoughts on “We got the new budget…”

  1. My only advice is to always, always, ALWAYS budget for some cost overruns – *minimum* of 10% of the entire project budget. We have been lucky in our relatively minor projects (finishing basement, replacing roof) to come in almost exactly on budget, but for a larger project it seems like there’s always something…often in a whole-house reno it’s some kind of structural/electrical/plumbing issue that couldn’t be identified until the walls/floor were opened. Hang in there!

  2. I would agree with that, but my minimum would be 20% over. Also, always make sure to budget a good chunk more time than it’s projected to take.

  3. I imagine you can cut down on some of the discretionary expenses, but not all; you can cut down some of your house plans, but not all. Why not cut out the sacrifices you are really ok making, and see how much difference you’ve still got?

  4. Sympathies. 🙁

    I suspect that cutting out discretionary spending for the rest of your lives would be pretty traumatic.

    Are there house things that you could leave out for now, but come back and do later, a few years down the road, if the money becomes available?

    Re the queen-sized bed in the guest bedroom: last weekend, I saw a nifty piece of furniture: a wallbed. It looked like a nice wooden home entertainment center cabinet, but if you pulled on the handles, down swung a queen-size bed. Nifty! Don’t know if this actually helps in your circumstances, but figured it was worth mentioning.

    You wrote: “We could, in theory, borrow enough money to go with the original plan”—seems like an intermediate option could be to cut the pizza oven and conservatory, thereby saving $60k from the $100k overrun, and then borrow enough ($40k, yes?) to not have to cut other stuff. Or am I misunderstanding?

  5. Mary Anne, (Part one)
    Remodelling costs are always worse than new construction because of demolition discoveries and other unknowns. As a retired architect I feel your pain as I have had to give the bad news to clients that their champagne dreams are not affordable on Budweiser budgets.
    But a few suggestions:
    Keep all the things that require building permits. That would be Electrical, Mechanical, Structural and Architectural. No sense paying twice for the permits – one now and whatever in the future.
    Think of the house as an enclosure. Do all that is nessary to achieve the volume of living space you want.
    Forego all expensive finishes and trim. If you are worried about color coordination just chose white for the walls and trim. Color can be added later. In fact do all the painting yourself, tell the contractor just to tape and sand the drywall.
    Choose generic electrical fixtures, you can always upgrade later whe the book royalties roll in. Just make sure that all the electrical outlets and light fixture boxes are where you will want them. In fact in some places you may want to have a cover plate over boxes for future lights.
    Keep your existing Kitchen appliances. A new set of stove/oven with hood, dishwasher, refrigerator can be $8,000.00 or more. (cont)

  6. Mary Anne, (Part Two)

    Just verify that the spaces in your new cabinets will fit them.

    As for cabinets, only get the essentials. Any extras for display, misc. storage, etc. will reduce the cost. Finish woodwork is one of the most expensive interior costs.

    Also think about visiting a building materials salvage yard for things like doors and railings. Also maybe windows, but they might not be energy efficient. BTW the government is offering tax credits as of April 16 for “Energy Star” items that include windows, appliances, heaters, etc.
    It would apply to this years taxes. You might consider pre purchasing and storing some items during the “window of opportunity” to gain the tax credits.

    And yes, pare down the furniture purchases. While I’m not saying a straw filled mattress on a rope wrapped wood frame would be necessary, expect that people will understand that your house is a work in progress for a year or two.

    Finally… think about finishing the basement later. Some metal studs and drywall can make a temporary storage room. And just rough in the laundry room and concentrate on the upstairs.

    Best wishes for the house. You need to get going to put in the foundations as soon as the ground dries out. It will take several months to frame and weather in the envelope. You want that done before the fall rains. So get your contractor going on the permit. The Building Depts get backlogged in the Spring and it could delay your start.

  7. Mary Anne Mohanraj

    Dennis, thanks so much for all of this. Most of it we were already planning on, but it’s still helpful to have it all in a coherent list. 🙂

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