The House That Wisdom Built - EP 04: Budget Smarter, Not Harder

Welcome to  a laugh-filled, insight-packed episode. Vince and Nathan crack open a couple of brews (yes, even a surprising hat-tip to Miller Lite) and take a deep dive into one of the most misunderstood parts of building: the budget.

They pull back the curtain on how budgeting works in custom home building — from the emotional rollercoaster of early pricing conversations to what really drives costs (labor, materials, and professional services). You’ll learn why pre-construction is like a dress rehearsal, how to plan for unknowns, and the difference between smart splurges and cost-effective saves.

Whether you’re dreaming of your forever home or knee-deep in planning, this episode is your guide to budgeting smarter, not harder — with plenty of stories, real talk, and a little bit of builder banter.

Key topics:
 • The “Jets Syndrome” and how to avoid it
 • Why your builder’s pricing sticker shock is actually a good thing
 • How to plan for contingencies without losing sleep
 • Where to save (like light fixtures) and where to invest (like windows and outdoor living)
 • The 3 biggest cost categories every homeowner should know
 • What “budgeting early and often” really looks like

Pull up a chair, crack a cold one, and let’s talk money — the smart way.
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Building Brews & BBQ
Instagram: @buildingbrewsandbbq
YouTube: YouTube.com/@BuildingBrewsandBBQ

Hosts:
Vince Longo
longocustombuilders.com
Instagram: @longocustombuilders

Nathan Walters:
massarossa.com
Instagram: @massarossa

Produced by:
Michael Newman
michaelnewmanfilm.com
Instagram: @michaelnewmanfilm

Transcript

Vince (00:08)
Hey, welcome back to another episode of Building Brews and Barbecue, where we're taking you through our latest series, The House That Wisdom Built. Built. Ruth. Yeah, that's wisdom. The babe, Ruth. The babe. The Not Ruth from the Bible? That too. Here we go. Here we go. Agree to disagree again. Sorry for our listeners that things happen off camera. We're not in sync on a lot of things. What we are in sync on today, my friend,

Nathan (00:17)
House at Ruth.

Vince (00:36)
is in the bruise portion, I did decide, I put my hat on, a hat tip, a hat tip to my friend, Nathan. I did put the hat on today to imbibe on a Miller Lite.

Nathan (00:50)
And can we all go back to the last couple of episodes where he made disparaging remarks about Miller Light?

Vince (00:59)
That's right. And if I knew what the word disparaging meant, I would probably be thankful. Anyway, listen, hey, we just got done with a two part. We had the bonus bonus that we hope you really enjoyed about the power team. You gave my boots away, walked home, caught a cold, but that's all right. But now today we're getting into our budget smarter, not harder.

Nathan (01:17)
Save your boots.

Vince (01:27)
series, okay? And we hope that this doesn't go as long-winded as the rest of them, but we hope you found interest in it. And so today, we're gonna talk about budgeting for your dream home or your remodel. And the key takeaways, the importance of it, just the quick once through, things to be cognizant of, and the different ways to approach it. And so, we're gonna break down the cost.

how to budget smarter. that's what it boils down to, because we want our listeners, which hopefully are going to be building a home remodeling, to be smarter with the budgeting phase.

Nathan (02:08)
And

be educated on what it looks like. I want them to know what it looks like because, know, everybody is... That's the hardest... It's all hard. To me, though, I feel like that, you know, on the emotional roller coaster of a build, when you're budgeting and you start talking about what it costs, that's always the... It's always the weird part, and it's the weird part for the customer and the builder. Generally speaking, that first budget we give is more than they want to spend.

Vince (02:37)
And I love what you pointed out, Nathan, is that it is a roller coaster, right? It's so funny, we have this detail on the wall in our workroom that is the customer emotional roller coaster through the entire build. And you see, just like you're at a fun park, you're at Six Flags, right? And you're going up and down. And then the big up, and these are highs and lows in building. even in the initial phases, people think, it's...

It's high when you start to build and then low here. No, no, no. It's like all the different undulations, right? know, and you get that initial high when you first start off, you've made your plan, you go into the design with the architecture, picking things. Now comes the hard part. Now we're going to, we're coming down the downhill and we're going to get into the bottom of the first loop-de-loop right now.

Nathan (03:28)
And the bottom is the first time we share our numbers.

Vince (03:31)
That's right. When we really get through the budget, but it's not that bad. It's like the small one because we're going to share it early enough, right? And we touched on it before and that's the most important part of budgeting early and often. know, we want that dip in that roller coaster to be as shallow as possible. And with that said, what we try to do, you mentioned simplify and you've really hit the nail on the head because budgeting can be this big, giant, crazy

thing, elephant, that's like, my gosh. We try to break it down into three simple, also the biggest, cost categories. And that's what I wanted to talk with real quick as we move through. And that's the breakdown of those three biggest ones. One is definitely labor, is gonna be the biggest cost category. Second, just as big as materials. And then the third is professional services. So Nathan, in terms of labor,

You know, break that down a little bit for us. You know, when we're budgeting for those labor.

Nathan (04:38)
we're

budgeting for labor, those are prices that we have pretty dialed in because we're using, we should be using the same guys. So we're going to have those labor numbers pretty well died in, but then going back through pre-construction as we've kind of beat that horse in the ground in our past episodes, it makes it important because look, a trim carpenter isn't $4 a square foot on every house.

How many rooms have moldings in them? How many rooms have crown molding? How many rooms have paneling? So going through that, having your labor, knowing their base price, getting architectural and design plans to them is very important.

Vince (05:17)
Well, I'm going to come move to Oklahoma because I can't get my trim carpenter to pick up the phone for $7.00 or so. But hey, but it is different in different markets, and that's why this is so important. We're typically seeing labor costs somewhere between 30 and 40 % when it really breaks down of the total cost of the job. Sticks and bricks, not including land. We're just talking sticks and bricks now.

Nathan (05:24)
$7 a foot.

Vince (05:46)
That's where we try to see if there's any undulations around that and differences, right? And the second biggest thing is materials. right now, we're doing this podcast in early 2025. right now, we don't know day by day what materials are gonna go up in price. Everything's so tied to what we do. And if the listener doesn't know, the majority of what a home builder does for your home,

is tied to the commodity stocks and in the commodity markets. it can be this, the lumber can be this one day and then all of sudden it takes off. A couple of years ago, you saw it almost triple. yeah. Right? And what we're seeing this year is we get normal increases at different times of the year. You can almost set your clock by it. And the dirty little secret is things never really go down. Ever. In price. No.

I hate to sidebar us here, but one of the big things, and I think this is a huge takeaway for our listeners when it comes to budgeting, and I'm dropping away from materials, but it just hit me and I have the brain span of a gnat. Yeah, yeah, of course. seen it? Of course. What is your name? What? It's a very short brain span, and so I got to get it out. Okay. Or else I'll forget it. I'm ready. No. crap. I forgot. No, I forgot.

Nathan (07:14)
us.

Vince (07:14)
I am serious.

Geez. Anyway, sorry.

Nathan (07:19)
It'll make- it'll make me laugh.

Vince (07:22)
Did you just spit up? We're on camera.

Nathan (07:26)
I know, we're gonna let that stay though. no.

Vince (07:29)
might come back,

okay, materials, it's going to ... I can't believe it. Up and down. But listen, I remember all my customers and stuff. Yes, you do.

Nathan (07:38)
I will tell you this so would you said something I'm gonna disagree a little bit. Yes We used to be able to set our clock To hey, you know, you're getting a letter. Okay. Hey the concrete company in November is gonna send you a letter that January 1 prices are going up that used to be true I Feel like it's quarterly. Yeah quarterly with drywall shingles concrete

The mint- the- the- You know where I feel like we're getting hit as builders, what's hard to keep up with, is not even drywall. It's the ancillary products that go with drywall. The bullnose. The metal edging. Like, it's- it's all these little components that keep taking price increases as well. And you're right. We used to set our clock to it. Now, it's- it's quarterly year. And I no longer get one sheet, hey, drywall's up. It's multiple sheets of drywall and all the components with it around.

Vince (08:35)
That's right. Yeah, that's right. And so with materials, we usually gauge that, of the total cost of the job, that cost category for materials is probably gonna be about 50%, plus or minus of the overall cost. So we're at about 30 to 40, right around 50. And that remaining, call it 10 to 20, 10 to 15%, whatever it is, is I call professional fees. That's your interior designer, your architect, engineers, things like that.

Nathan (09:04)
Power Team if you will.

Vince (09:05)
Yeah,

except for the builder. And the, yeah, yeah, guess the landscape architect too. So maybe closer to 20. Yeah. Right? So that kind of makes up the 100 % of your build. And you got to move things around accordingly. Oh yeah. Right? And be cognizant of that. So those are the three biggest cost code categories. Key additions from pre-construction. know, again, we'll just touch quickly on this, that...

a really thorough pre-construction upfront is going to catch a lot of these budgetary things and allows us to get those things honed in, moved around, cost-coded. So we have the big cost categories, in our systems, everything's down to the individual line item cost catalog or cost code. so we'll align those out and we'll present that stuff to the customer just depending on what type of contract they want to do with us.

and is how we present those numbers to them. But the other thing it does is a thorough pre-construction. You had said before, it helps identify cost drivers up front.

Nathan (10:13)
What allows us, yeah, it allows us to have the conversation. What I like to tell customers, it allows us to have the conversation at this table, not out when we've already broken ground. That can still happen even with a thorough pre-construction, but what I love so much about the pre-construction and budgeting early is it allows me to tell you, hey, here's where we're at. Here's ways that we can help reduce this to get this into your budget or do you...

and your spouse want to have a conversation about knowing, well, this is what we're going to spend to get what we want. And it allows us to show you, because our meetings that we like to tell our customers, hey, we're going to send this to you. I do not get shocked. Know that we're going to have a very large meeting. Same thing that you have at your office. We're going to put it on the TV. We're going to run line item by line item. We're going to talk about these things, what it is. And if we're in a, and we'll get to it later, if we know we're going into a cost plus contract.

We'll also have the bids. I'll show them the bids. Hey, this is how I got this number. I got this number because we sent it off. Here's the bid.

Vince (11:21)
So what you're saying is think of pre-construction as a dress rehearsal for the build. That's I love that. That's it. And I've always wanted to be in a dance routine on Broadway. That sounds about as close as they'll let me get to the stage. You weirdo. Get out of here.

Nathan (11:28)
the project. That's right.

doing dress rehearsals that's for the for the rock

That's exactly right.

Have you remembered what you were going to say? No.

Vince (11:46)
I still have no idea. It'll come to me when I'm at home. Yeah, when I'm in the bathroom, Raider. anyway, what we want to jump to now is one big thing when we're talking about budgeting. Yes, it involves a detailed pre-construction process. Yes, we're going to get you as accurate as possible. And that's going to evolve through as we're working through pre-construction with the power team, honing in those, you know, yes, we want this in here, this in there. Okay, select it in our system and co-construct.

Nathan (11:48)
when we're done.

Vince (12:15)
or if our users, other builders use builder trend, lock it in. Lock it in. Get it on order. Order early. Yes. For a couple of reasons, right? What I tell my customers is we do an awesome job in pre-construction. And one of the huge benefits that comes from that is my purchasing manager, he can release purchase orders. Yep.

The minute that we get the permits, the minute that our contract is finalized, we get the permits, we're ready to do our handoff, which is an official meeting that we'll talk about later from our pre-construction team in-house to our field team that's gonna physically build the house. My pre-con team is not building their house. So that team then takes it over and takes the lead. And they're the first line of defense for building the home, first place that the customer

and people that they go to talk to, then my pre-construction team becomes the helper, the assist, so to speak. And while we're in pre-con, my field team does the assist, probably like you, where they'll go out and check a measurement on the field, check a topo, to help the estimator and the project manager and the pre-con coordinator get things honed in. So that being said, we get through that.

we develop the full blown budget, things are locked in, we get to place the order, because purchase orders are released, we're securing items so we don't lose them, go, they're not available, we're locking that in. So, even though there's gonna be unknowns, you get started, what do you, Nathan, tell your customers from the budgetary standpoint to set aside?

Nathan (14:06)
So what we like to say is industry standard is 10%. And we like to tell all of our customers that, and we're like, listen, as we've said in other episodes, from pad to drywall, we are pretty good at being 1 to 2%, OK? After that, does the customer want something more expensive? Do we run across problems like you talked about? Did we hit rock?

at excavation, even with a civil engineer involved, we didn't know was there. Okay. I would say some of my happiest customers have been those customers that we've given the budget. And I have, have a few of them that are running through my head. still remember one of my first ones, one of my first real custom customers, I gave them their budget and let's say it was like 789. And I still remember her saying, I'm comfortable with that number.

don't want to start there. What can we do to get this lower? So we worked through the budgeting process to roll this. We got it down and I think the contract price was at $717 something like that. We go through the build and what was great, I still remember to this day, this was back in like 2000. God man, this was a long time ago. I forget when it was. So what I'm going to say won't seem as expensive then, it was now, but it was expensive then. She wanted a $4,000 kitchen faucet, just a kitchen faucet.

That wasn't just one. Not one. Not two. Just one faucet. She's like, I'm going to take it. That's what want. And she was able to say yes to things along the way. Right? She's like, yes. Okay. And it didn't give her anxiety. And what was great is by the time we get to the end of the build, we ended up with the build at like $7.94. And my first budget was $7.87. Well, we lowered it down. And then she was able to spend a little more money, get about

Vince (15:33)
20th.

Nathan (16:01)
10 % over budget bet feel good because we ended where she wanted to. Where I see frustration is if they don't take into consideration that 10%. If they start kind of where they want to max out, then you add 10 % to that, that can be uncomfortable.

Vince (16:18)
Right, that, and I guess you call that the contingency. That's right. And that's what we like to do. like to tell, hey, 10 to 15%. Yeah. And that's just for the unknowns. And here's the thing, what if they say, oh, they saw it? Oh, you still have to explain why you ran into it, right? But they don't mind if they're making the selections and they're adding the things. And we tell them, listen, keep to the side. And once we get through your fits and finishes and we're out of the unknowns. Yeah.

then we'll give you the green light to start using some of that. It's safe to use it or do whatever you want with it.

Nathan (16:55)
Keep it whatever bit, but you're right. Like the... It's just good for them to know, okay, I have this set to the side. And like you said, hey, have a set to the side for if you end up at the countertop store. And you're like, I gotta have this. I gotta have this piece of Carrera marble. I gotta have it. So I'm gonna take it even though it's not in my budget.

Vince (17:15)
Yeah,

yeah. And so that's step one, right? Step two is, do you ever tell your, you know, I'm sure your customer's asking this, where to save and where to invest. They do. You know, cause I like to be good steward of their money. Around here, our motto is every dollar has a name. And we steward that customer's project as if it was our own money. Yep. You know, and where would we spend it? And since we also flip houses and do those other things, keep investments.

We're really skilled, I know you are too, because you do the same thing in Oklahoma. You're really skilled with where you get the biggest bang for the buck. so that we're to save and we're to spend, what do you think is a good place to save? What do you tell them?

Nathan (18:02)
So what I tell my customers, you're asking, you're asking the round about the right question of it. But what I like to tell my customers is listen, when we're building your home, save on the things that you can replace later. Easily. Okay. Light fixtures, plumbing fixtures, heck even countertops really. Hey, if the budget, if we hit rock or something happens and

no, we've hit our contingency. I'm very big on guys. Listen, move in and you can change plumbing fixtures. Don't try to save on something that is very hard to redo. Trim. Don't save on your windows. Don't save on your brick and rock work or your exterior facade. Those are things that are very hard to change and very expensive to change.

Changing certain selection arms, I know you want it, you're building your new house, but changing your plumbing fixtures is very

Vince (19:05)
Yeah, that's right. And so that, like what you're saying. I think that's your first line of defense with where to save. And then I would say second, more intrusive, like you were going towards, you're not gonna really want to take it out and replace it, or it's more intensive, would be like those secondary baths, your tile. That's right. You know, they make really great looking porcelains now. They do. That are cost effective. So save there.

find more cost-effective products in those rooms, the secondaries in the bedrooms, things like that.

Nathan (19:40)
call them level one tiles, People put their nose up at a level one tile. I've seen some, like you said, level one porcelains that look like marble. know, put those in your secondary bathroom.

Vince (19:42)
So people-

Yeah, yeah. And opposed to that is where to invest. My opinion of where I try to direct my customers is, and I would say the listeners is invest in high traffic areas. Of course. Where you're going to use it the most, where you're going to feel the most proud and take pride when you have family over friends, having a party, and that could be your kitchen. Right. Your primary bathroom and bedroom.

Nathan (20:18)
but you're outdoor.

Vince (20:18)
Outdoor

kitchen, that's huge now. Invest there. Hey, in that outdoor area, we're doing it now where if there's a pool or something like that, we're doing turf there, because it's green year round. And then doing your regular grass more native around the perimeter. So invest in those areas. I think that's a big budgetary thing. So save, invest. I think we've nailed that on the head. Those are smart choices.

And you can always consult your builder on these things. And they'll be able to help direct you.

Nathan (20:50)
And

it's ultimately, as I went back to earlier in custom homes, it's your home. Yeah. As in to the customer, this is your home. I'm going to give you my opinion. I'm going to ask you how you live, what you want to use. But from there, I think we got some good ideas.

Vince (21:04)
Yeah, I think so. I mean, anything else you can think of from a budget standpoint or a process or procedure that you think just kind of stands out to you that our listeners can get benefit from.

Nathan (21:17)
I mean, I really, I know it sounds like we've beat a dead horse into the ground, due to the builder 20 group, due to the things we've done.

Pre-construction in solidifying what you want in pre-construction is going to help you, and I'm talking to you consumer, beyond more than you could imagine. Solidifying those things. You've nailed it. Hey, solidifying. We went through a couple of years ago where we, and when I say allowed, where we struggled was customer service was almost letting the customer drive the ship, right? And that's what we thought.

And it's not good because we allowed so many things to be TBD and you can't build TBD. No, it's not. That's exactly right. It's a, it's a disease. And it's a disease you don't want because you can't, you can't build. That's right. You can't build. And so we, we've been really big. You got to make your decisions. Let us price it. And then whatever builder you're working with, do not.

Vince (21:59)
in this TBD and that's not just a disease. It is a disease in construction. I'm being treated for TB.

Nathan (22:26)
freak out at your first pricing. It's going to be over. And I want them to understand that, my goodness. But if, like we've talked about, it is detailed, walk through that. And hopefully your builder can walk you through that. Okay, where is it? What can we do? Then from there, it really is as simple as it's your decision to the customer. Do you want to pay it or do you want to find ways to save money?

Vince (22:51)
That's right, that's right. And one of the things that we like to do on top of the budget is what we call the look forward. And that's what we'll take the schedule and we'll overlay on the schedule. What does this look like monthly as your project rolls along of funds needed per month? And so they get a really good, and it's not hard to do, because we know the schedule, we know tentatively about what's gonna be required of the customer, whether it's meeting a phase,

completion, giving that and knowing that ahead of time allows the customer to pre-plan their draws. Pre-plan what's going to be owed at specific times. And I found that that helps them tremendously in the budget phase. Because they're already thinking, okay, I'm going to need this eight months down the road, 14 months down the road, 18 months down the road, depending on the build. I mean, we have some builds that'll go for two years, two and a half years.

You know, we don't see them much less than 14 or 16 months now with what we do. Yeah. You know, and so we try to let them know that this is a long run. This is a marathon. Yeah, it is. And, you know, that's really where we are. And something that I've learned from a really good business consultant, Todd DeWalt, he's said this many times, and that's the Jets syndrome.

Now I've done my own little spin on it, right? Because I am originally from New York. Oh no, don't talk, because I'm going to forget. So wait a I'm from? No, Mississi... So I'm from New York, right? And in New York, upstaters hate the Jets. We're Bills, Giants fans, right? So in my whole world, the Jets always suck. But it also sucks in construction. Because Jets stands for just enough to start.

Nathan (24:21)
going to remember it.

Vince (24:47)
whether it's the budget, whether you know just enough to start with the budget, whether you know just enough to start with the selections. know, builders are always in a hurry to start because they're short-sighted and they wanna just get going. What do builders do? You've told me a million times. We build. We build. We don't pre-plan. We build. We build. But it's changing. It is changing. The adage is changing. A good builder that's gonna provide the best customer experience is the one that has the best...

pre-concerned.

Nathan (25:18)
Yes. And it takes time. Yes. It takes time. And that's what I think I want the most out of this is for customers that are going into this to know what they're going into because it almost shocks people. In that very first meeting, they're like, okay, so how long is this going to take? And for me, it's always, okay, well, if today you sign a design contract, 16 to 18 months today, today, and that that's always a what?

It's like, they're because, you know, they got that energy to we're starting. We finally made this decision, but I I'm hoping that we are educating people of knowing that's what I try to educate them when they get to me. Cause I'll get people that are like, well, we really don't want to break ground until next year, whatever. like, so let's start now. Right. Because if you want to break ground next year and you come to me next year, when you show up to me, we're six months away from picking. Let's let's start. Let's pre-plan. Let's do this.

Vince (26:12)
Yeah, that's right.

That's awesome. Well, I think we know a lot about the budgets, and I hope our listeners have learned a lot about the budgets. And if they do have any questions, just please feel free to reach out to us. DM us. We love questions around here. Yeah, that's right. Yeah, just can't remember them.

Nathan (26:31)
Yeah, no, we will. We don't remember the questions or the answers.

Vince (26:35)
So I think that's just a preface for us. So if we forget your question, blame it on me. Yeah, that's right. Well, I hope you enjoyed this episode. If you want to learn more, we'd love it if you would tune into the next episode for now. Like, subscribe, give us a review. I think that's not what we asked for before. We'd love a five-star review, but don't gauge it off of this one.

Nathan (26:39)
Yeah, that's.

Or don't gauge off any of them. Just give us a five. Yeah, that's right.

Vince (26:58)
Just give us a thumbs up. Yeah, that's preferable. The check's in the mail.

And like I said, like and subscribe. You can find us on YouTube or whatever you get your podcasts. And we'll see you on the next episode. That's right. Right? We're gonna dive into some other cool stuff. in the meantime, I'm Vince. We'll see you on the next one.

Nathan (27:15)
and I'm Nathan.

you