How to plan for your next project brought to you by American Express Plan It™ Instalments

IMG_7987.JPG#asset:2026


So you have decided to bite the bullet and you are planning a new renovation, or building your dream home. The key to a successful project is budgeting. Whenever I am looking over a project for myself or for a client one of the first questions I ask is, “what is the budget?” There is a huge difference between how much you want to spend and how much something actually costs. How do you work out what your project will cost and then track spending once you start to avoid major over-runs? 

It’s actually easier than you think - and all comes down to doing the right research, planning and quoting before you start. Skip this vital step, and your dream project could turn out to be your biggest nightmare! The importance of knowing just how much something really costs can’t be overlooked. As dreamy as some things may look on the gram, they can in fact be super expensive to manufacture and install, so knowing the upfront costs is essential to knowing where you are prepared to invest your budget and if you are going to need a little bit extra financial help. Here’s how to do it…

First things first, you need a floor plan for a new build, or a good sense of any structural and aesthetic changes for a renovation. This piece of paper will be your golden ticket to tendering out your project and ensuring it is executed as you dream it to be. This will form the Scope of Works when you’re ready to speak to builders or contractors regarding pricing. This is relevant for a single space in your home like a kitchen or bathroom, or for a full-scale build or extension. 

  1. What are you building?

First things first, you need a floor plan for a new build, or a good sense of any structural and aesthetic changes for a renovation. This piece of paper will be your golden ticket to tendering out your project and ensuring it is executed as you dream it to be. This will form the Scope of Works when you’re ready to speak to builders or contractors regarding pricing. This is relevant for a single space in your home like a kitchen or bathroom, or for a full-scale build or extension. 

Nectaar-Portraits-023-2.jpg#asset:2027


 2. Go Window Shopping and get Quoting

As unappealing as talking numbers may sound, a successful project simply doesn’t happen without it. The old “I’m going to renovate my house for $100k” simply isn’t realistic, and setting yourself an accurate budget is near impossible when you don’t know what you want or how much it costs. Your next step is to do a little window shopping or internet browsing to research products: 

  • Investigate big ticket items - fixtures and fittings, including tiles, tapware, flooring, appliances and lighting to name a few
  • How much cabinetry are you planning for? What materials and bench tops do you want? Is this all custom cabinetry or are you able to find a flat pack option?
  • Will you also need new furniture? This is often something people overlook. You don’t want to be moving into your new home and sitting on the floor to watch TV

Even a detailed builder’s quote won’t necessarily be accurate if you don’t have a rough idea of the types of finishes you want for your home. I think it’s important to have a contingency budget in place for all the variations and unexpected costs that inevitably pop up.

Richmond-Project-014-2.jpg#asset:2028

3. Number Crunching

Now you’re in a position to determine how much your project will cost. A great way to manage costs if you are wanting to save some dollars is to do some of the fixture, fitting and equipment purchases yourself. This means that you are not going to be paying a builder’s mark-up on the product and you can potentially negotiate a good rate directly with the sales staff. 

  • If you’re engaging a builder to complete the trade and labour part of the project, they can quote based on your selections. Giving your builder information like the flooring specification allows them to more accurately quote for your project for the labour. For example, if you are going to have a herringbone floor, the labour costs associated with this are going to be higher than straight boards. The same goes for tiling, mosaics are generally more expensive to lay than a standard 300 x 600 tile.
  • If you’re fully renovating a house or multiple rooms, you can also use the m2 rate to quickly calculate the cost of your build. Then multiply this by the m2 size of the space being renovated or built to get a good idea of cost. If you have your trusty plans with you, the helpful staff will usually be able to help you get your QTY right, plus allow for the correct amount of wastage.
  • I always have a running spreadsheet when planning a project. The spreadsheet format means your running total is always on-hand to see how your overall budget or spend looks. Create a column which is used during the planning and quoting stage, and the Actual Cost column once the project is going to keep an eye on costs. 

Nicks-Place-006_200813_105446.jpg#asset:2029


  • 4. Set a budget
    Although you’ve had an idea of what you’re willing to spend from the start, what you want to spend and what your project will cost are two very different things! Now that you know what your project will cost, you’re in a position to make decisions:
    • Is the cost within your budget, and if not, what products could be purchased with the help of payment options, like American Express’ new Card feature Plan It™ Instalments, so you have the flexibility and control to pay them off over time? 
    • If you’re renovating and the estimated cost exceeds what you’re willing to spend, you can always break the renovation up into sections rather than tackling it all at once. Put a plan in place in the form of a timeline. That way you can work out what you can spend, borrow and how long you have to pay it back. Going through the above process means you can make a decision about if you’re willing to stretch your budget before you start, rather than being caught out halfway through, with the stress of over-runs.
    Screen-Shot-2020-08-13-at-10.57.14-am.png#asset:2031


5. Explore your financial options

While it’s a nice thought to save up for your project and use all your own dollars, this isn’t always achievable, especially in the current climate. COVID has really thrown a spanner in the works for a lot of families wanting to build or renovate their dream homes. Budgeting is essential, and it’s absolutely worth considering financial options that can help you keep that budget in check and ease the stress of financing your project. 
 
American Express have recently launched Plan It™ Instalments, a new payment feature designed to help Card Members manage both their expected and unexpected expenses during these unprecedented times. With Plan It, you can pay off a portion of your Credit Card balance in three, six, nine or twelve months. Instead of paying interest, you’ll pay a fixed monthly fee on your monthly instalment, which is shown to you when you when you create the plan. As I mentioned earlier, you could use Plan It to pay off all the purchases like your fixtures, fittings and equipment for your project (helping you save on the builder’s mark-up costs). But you could also leverage it for some of those inevitable unexpected costs, which you’ve hopefully put a little contingency budget aside for. Eligible consumer Card Members can access Plan It on their existing Credit Card. You just need to set it up in three easy steps via the American Express App or your Online Account.
 
Here is a little breakdown of how Plan It works – and why it could be the perfect solution for your next project:
 

  • Card Members can choose a three, six, nine or twelve-month instalment plan, selecting how much of your statement balance you want to pay off. For example, say you purchase all your appliances, tapware and sinks for your new kitchen using your American Express Credit Card and this totals $14,000. You can select to pay off this amount over a 12-month period (or, perhaps you might choose to pay $7,000 upfront and the second half over a 12-month period – it’s totally up to you). There is a fixed monthly fee shown to you upfront when you set up the plan, but ZERO interest, making this a hugely attractive way to get through your renovation without getting stung by hidden interest costs.
  • T&Cs apply: See more here