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Preliminary Budget

Once you have your programming document completed, this is when you can start your budget line items. The budget will be set up in the same way as the typed programming document and the binder are. You will have the categories broken down into finishes. For example, flooring, paint, cabinetry, furniture, etc. You will need your floor plan to capture quantities of items needed. You don’t have to input the materials yet; just set this up to get ready to start plugging in ideas. You can create this in an Excel document, then list all rooms with their square footage, quantities, and high/low range. Include a space for labor if required. There is a great website that can help you budget for some of these items: This will give you an idea on what to expect when planning for each line item. I included a link to an example below for your reference. This is set up to give you a range of pricing so that you can determine what you overall budget will be and what price range to stick within. This is not a necessary step at this stage if you don’t have a budget you have to stick to. Eventually, you will want to create a budget. Later, I will give you another example of your actual budget that you can transfer this information into or just start with that layout. The budget will serve as your quick reference point because it should contain all information pertinent to each product. For example, you could include the item, room location, model number, finish, vendor, dimensions, cost per items, quantity ordered, total amount, date ordered, lead time information, and then, when it arrives, you can list where it is stored. So, for example, when the plumber asks which faucet is for the guest bathroom, you would have your binder on-site, and you would open to your budget locate the plumbing section. Look for “guest bathroom faucet” and then read the model number and give him the specs. When there are a lot of products for the entire house, I like to give each subsection a numerical value. The guest bathroom faucet would be PL-2 (for plumbing – 2) and then I would go into the garage and look for PL-2, which I wrote onto the box when it arrived, and hand it to the plumber. I would also flip to the plumbing section in my binder, look for PL-2, open to that page, and show him the specifications /installation instructions for him to follow along with. This budget, along with the binder, which I explain next, will be something you can provide to your CPA to account for depreciation costs and when/if you go to sell your house it can also increase the tax basis of your home so that you end up paying less taxes in the transaction.   

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