10 Golden Rules for Saving Money on Construction

By: Becky Striepe  | 
Brick by brick, you can save money on construction in suprising ways. See more home construction pictures.

Key Takeaways

  • To save money on construction projects, review all project costs line by line with your contractor to eliminate unnecessary items, decide what work you can do yourself and identify parts of the project that you can postpone.
  • Source your own materials when possible to find cheaper options than what your contractor might provide. Also, consider doing some work yourself to save on labor costs, but be realistic about your skills to avoid costly mistakes.
  • You might be able to save money by building during the offseason, when subcontractors are in lower demand and therefore may have lower pricing. Additionally, investing in energy-efficient features may mean higher upfront costs but could save you money in the long run by lowering your utility bills.

Whether you're doing a home renovation or building from scratch, it's nice to be able to cut back on expenses in any construction project. Construction can get expensive, and since it's not as easy to get a loan as it was before the housing bubble burst, chances are you're working on a tight budget.

My husband and I added on to our house in the winter of 2011 and replaced the roof on the older part of the house in early 2012, so construction was a fact of life around here for about half a year. In the process of hiring contractors, working with an architect, and dealing with the day to day headaches of a large-scale renovation, I learned some of these money-saving tips the hard way, lucked out with others, and wish that I'd known a few more before we broke ground.


There are three ways to save money on construction projects: Cutting back on up-front costs, avoiding expensive mistakes, and making the finished structure less expensive to inhabit. From hiring workers and sourcing materials to doing some of the work yourself, there are lots of tricks to stay within your budget without cutting too much out of your project.

10: Go Over the Project Line by Line

Most contractors will meet with you to go over the construction schedule and break down all of the costs. This is a great opportunity to save! Sometimes, contractors will assume you want things you don't, and you can often find elements of the project that you can do yourself or put off until later, when you have more money on hand.

When you go line by line through the budget, don't be shy about questioning anything that you don't understand. Your contractor may have assumed that you want crown molding in your renovated space, for example. If you don't care about crown molding, you can save hundreds of dollars just by taking it off of the quote.


This is also your opportunity to decide which parts of the project, if any, you want to take on yourself and discuss anything you want to source for yourself. Going the do-it-yourself route means extra work for you, either on site or at the home improvement store, but it's worth the extra effort if it means the difference between being able to afford your project or having to cut things out that you really wanted. When you're taking on any part of a construction project, you need to communicate frequently with your contractors and make sure that you lay out your responsibilities clearly from the start. If the project ends up delayed because you didn't know you needed that bathroom vanity on site by a certain date, it can cost you money.

9: Do it Yourself, Unless You Can't!

Whether you're a die-hard do-it-yourselfer or just handy with a paint brush, you can probably pick up a few of the tasks on the construction to do list. Contractors make an average of $18 to $25 per hour, so when you do some of the work yourself, you're saving all of those labor costs [source: PayScale]. The trick is to be realistic about what you can do.

Only you know what your skills are. If you can do something yourself, it can save you a bundle, but if you don't know what you're doing, there's a chance you'll end up paying more to have a contractor fix your mistakes. Certain things, like installing a toilet properly, are more difficult than they may seem. Plumbing mistakes in particular can be very expensive to fix, since leaks can cause water damage that you'll have to pay for on top the cost to have things plumbed properly.


It's also important to make sure you know what you're getting yourself into. Some parts of a construction project have more to them than meets the eye. If you agree to paint, make sure to find out if you're just painting the walls, or if you'll have to paint the trim and the ceiling, too. My husband and I got burned a little on our home addition when we said we would paint. Let's just say that the addition has been finished for almost a year, and I'm still staring at unpainted closet doors and trim and kicking myself!

8: Source Your Own Materials

When it comes to items like fixtures, door knobs, and even cabinets, you can often find less expensive options on your own than through your contractor.

Most contractors will work with you, if you want to source some of the materials yourself, just make sure you agree before the project gets started. For example, if you're building or renovating a kitchen, you might be able to find cheaper counter tops at home improvement stores than through your contractor. You can also look for reclaimed materials to use in your project. If there's a Habitat for Humanity ReStore near you, it's worth a trip to see what they have. You can often find gently used elements like shelves and fixtures there for a deep discount.


Don't wait until the project has started to decide what you will and won't be sourcing on your own. Instead, sit down with your contractor before the project starts, and go through the budget line by line. You want to make sure you know when they will need each item on site, what the measurements need to be, and what the labor costs cover, if they are putting anything together for you. In the bathroom that we added, an IKEA sink base would have cost less to buy, but the labor to put it together made it more expensive than the one our contractors sourced.

7: Shop, Shop Around

Make sure you get a least three quotes for any job.

Never go with the first estimate. This may seem like a no-brainer, but when you're eager to get started on something like replacing your roof before the next big storm, it's tempting to just hire the first contractor you talk to. I've heard that three estimates is a good rule of thumb, but in my experience it takes more like five quotes to really give you an idea of the price range out there.

When we needed a new roof, I was very close to hiring the first contractor that gave us a quote, but my husband convinced me to make a few more appointments with roofers. That first quote ended up being almost double any of the others! Not only did talking to several contractors keep us from overpaying, but we were open with them about getting several quotes, and some offered to price match.


Shopping around doesn't just go for hiring workers. You also want to get mortgage quotes from more than one bank. Shaving even part of a percentage point off of your loan can cut down on your new mortgage payment. There are also different renovation loans that you can look into, like the 203(k), a home equity line of credit, or just plain refinancing your existing mortgage. Shopping for a loan is no fun, but finding the right one can save you a lot of money!

6: Go Green

The cost of construction includes what it will cost you to occupy the finished space, so take efficiency into account. If you can save money each month on energy and water bills, you can see a return on the up-front investment for things like double pane glass windows or beefed up insulation.

Efficiency goes beyond structural features. If you're redoing your kitchen, consider replacing your appliances with Energy Star and WaterSense models. In Georgia, for example, if you replace your old fridge and freezer from the early 90's with an Energy Star model, you can save more than $100 per year in energy costs [source: Energy Star]. Even simple eco-friendly choices like water-efficient fixtures in the kitchen and bathroom can help you reduce your utility bills and make that construction project work for you.


If you're really serious about cutting your energy bills, you can also look into alternative energy options for your renovation, like a solar hot water heater, solar panels, or a home wind turbine. You don't have to power your entire home with alternative energy to see savings. Many homes combine solar or wind power with power from the grid as backup. If your alternative energy system does produce more power than your home uses, though, your utility company may buy that power back from you [source: Gangemi]. Imagine getting a check in the mail from your electric company instead of a bill!

5: Consider Prefab

Prefab can save a bundle -- and it doesn’t have to look tacky either.
John Coletti/Photodisc/Getty Images

Prefabricated homes have come a long way, baby! Whether you're thinking about new construction or building an addition to your home, prefab just might be the way to go, if you're looking to save a buck [source: Garskof]. Modern prefabricated homes can be well-built, energy-efficient, and sometimes downright stunning. Companies like Method Homes or Rocio Romero offer high-end prefabs that look great and can save you money over new construction.

Depending on where you live, you might be able to build with reclaimed shipping containers. A large part of construction costs are for framing and enclosing the structure, and shipping containers essentially allow you to skip a lot of those steps. The trick with a shipping container project is to find a contractor who knows how to work with them and making sure your area's building codes allow you to use them.


As with any contractor, you want to pick and choose if you decide to go prefab. Check resources like Modular Today or the Modular Home Rating Guide to see if the prefab company you're considering has a good reputation for quality. It's also a good idea to compare prefab prices with construction prices in your area. Depending on what you're looking to build and where you live, you may find that prefab is not the cheapest solution.

4: Stay Organized

Unexpected hiccups can mean additional costs, so stay on top of your construction schedule. If you're sourcing any materials yourself, have them on-site when your contractor needs them.

Make sure you know what areas of your house need to be clear of furniture and take care of that before workers arrive. It's not cost-effective to pay expensive workers to stand around while you clear dishes out of your kitchen so that they can cut a new window in the wall.


For a larger renovation, you may have to stay in a hotel during certain parts of the process. Book that room well in advance to save money.

Keep track of any special requests that you made. While we painted our addition ourselves, we did pay the contractors to prime the walls and paint the ceilings. The day that the painters arrived, I randomly asked to see the low VOC paint and primer that we'd requested and paid extra for. It turned out that there had been a mixup, and they had to head back to the store. If you have special requests like this, especially ones that cost more, don't let that money go down the drain!

Staying organized also means keeping up with any paperwork and staying on top of your contractor, if necessary. If your contractor is responsible for pulling permits, make sure you know what's due and when, so you can check to see that everything is properly permitted. If your city slaps you with a stop work order, you can face costly delays in the project and possibly fines.

3: Think Small

Making that new bedroom a couple feet smaller not only saves on construction costs, but also on heating and cooling bills.

In construction, more square footage equals more money, so think about your project's size and ask yourself how much space you really need. Of course, you want to balance this out by considering resale value, but if you can cut back a few square feet here and there, you can save quite a bit. Depending on where you live and what the construction market is like, home construction can cost between $80 and $200 per square foot [source: Braley]!

Cutting back square footage doesn't have to mean living with tiny rooms in your new space. When we were talking to the architect about our home addition, we'd originally wanted the guest bedroom we were adding to be 12 x12 feet (3.6 x 3.6 meters). By cutting back to 10 x 10 feet (3 x 3 meters), we shaved more than $4,000 off the price of our addition. The guest room is a bit smaller, but with the money we saved we were able to add a back deck to our home, which was totally out of our budget before we played with the room sizes a bit.


Any time you add on to your home, your power and gas bills are going to increase. Remember that you'll be paying to heat and cool that extra space when the project is done. By opting for slightly smaller rooms you not only save on construction costs on the front end but reduce your cost of living on the back end.

2: Build During the Off Season

Fixing or replacing that roof in winter could save you 10 percent over summer.

We broke ground on our addition in late February, which means we were getting quotes and talking to contractors beginning in mid-December and through early January. One contractor flat out told us that by getting quotes now, he'd be able to get lower prices from his subcontractors, because winter is a slow time for the construction industry.

Like many industries, the construction business has busy and slow times each year. You can save between 4 and 5 percent by starting your project when contractors tend to be slow — right after Christmas [source: Glave]. On a more seasonal project, like a roof, you can save as much as 10 percent by doing the work in the winter [source: Gordon].


Not only can you save money, but you'll get better service from your contractors during the off season. Since contractors are less busy, they have more time to meet with you, answer your questions, and go through those budgets line by line to see where you can save some cash.

Of course, there is a reason for those off seasons. We saved a lot of money on labor a few years ago by replacing some of our windows with energy-efficient ones in the middle of winter. The thing we didn't consider: Replacing those windows meant that for most of one day, our home was exposed to the elements. Make sure you're ready for some unexpected inconveniences that can come with off-season construction, like spending the day huddled next to a space heater for warmth.

1: Know When to Save and When to Spend

Sometimes, saving a buck now will cost you in the future [source: Salant]. A builder who gives you a lower cost per square foot may seem like a bargain, but sometimes that can portend shoddy work [source: Salant]. When you're looking at quotes, it's usually best to go with a middle of the road estimate from someone who gets good reviews on sites like Kudzu and Yelp. You're not really saving money if you have to redo the work in just a few years.

The same thing goes for sourcing materials. If you're redoing your kitchen, don't choose the cheapest appliances. Read reviews and choose efficient, quality appliances that will last longer and help reduce your energy and water bills. Opting for quality may cost more up-front, but how much did you really save if you have to replace or repair those kitchen cabinets every few years?

Saving money is great, but home construction is an investment. When you're trying to cut back on costs, it's sometimes easy to forget about your home's resale value. Laminate may look good on paper, but springing for tile or hardwood flooring makes your home more salable down the road.

Whether you're renovating a single room or considering some major home construction, the key to saving money is considering your costs at every step of the project.

Frequently Asked Questions

How can I ensure the quality of materials when sourcing them myself?
To ensure quality when sourcing your own materials, research suppliers with good reviews, request samples when possible and consult with your contractor to verify the materials meet project standards and building codes.
Is it cost-effective to hire a project manager for a small construction project?
Hiring a project manager for a small construction project can be cost-effective if it means keeping the project on schedule and within budget, especially if you don't have construction experience. A project manager can negotiate better prices and manage contractors more efficiently.

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Author's Note: 10 Golden Rules for Saving Money on Construction

As I'm sure you picked up on in this article, my husband and I have been through quite a few construction projects, big and small. Adding a master bedroom and bathroom along with a guest room and back deck was by far the biggest, but I think that my favorite project we took on was replacing the windows in the older part of our house.

I hadn't really considered what window replacement involved, and it was fascinating to watch the workers pop the old windows right out of the wall and put in the new ones.

You wouldn't think that replacing windows could be a gratifying project, but it really was. Our house was built in 1929, and in the winter when you sat on the living room sofa -- right in front of a large window -- you could actually feel cold air blasting you through the single pane of glass. Our temporary solution was to build a pillow fort in front of the window if we were sitting on the couch on a cold winter evening. Just being able to relax on the sofa in comfort in the middle of January made that project worth the money, and our lower heating and cooling bills were icing on the cake!

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  • Energy Star. "Refrigerator Retirement Savings Calculator." (March 27, 2012) http://www.energystar.gov/index.cfm?fuseaction=refrig.calculator
  • Gangemi, Jeffrey. "Selling Power Back to the Grid." Bloomberg Businessweek. July 6, 2006. (March 27, 2012) http://www.businessweek.com/smallbiz/content/jul2006/sb20060706_167332.htm
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  • Gordon, Suzanne. "Money-Saving Ideas on Target in the Off Season." Chicago Tribune. September 6, 1994. (March 27, 2012) http://articles.chicagotribune.com/1994-09-06/business/9409060014_1_remodeling-projects-homeowner
  • PayScale. "Hourly Rate for Certification: General Contractor." March 22, 2012. (March 27, 2012) http://www.payscale.com/research/US/Certification=General_Contractor/Hourly_Rate
  • Salant, Katherine. "Building, and looking beyond cost per square foot." Herald-Tribune. July 29, 2011. (March 19, 2012) http://www.heraldtribune.com/article/20110729/ARTICLE/110729448
  • WaterSense. "What is WaterSense?" (March 27, 2012) http://www.epa.gov/watersense/about_us/what_is_ws.html