How to Save Money When Building a House

Financing the construction of your new house has always been an essential part of the entire construction process. It’s especially true when you consider the climate of today’s market. People who have saved enough money to fund construction are lucky because they do not need a construction loan.

Those who need a loan may find that banks and the general market conditions make it hard to obtain the necessary financing. Of course, you can get a construction loan if you meet their requirements.

This article will discuss the cheapest way to build a house and other tips to ensure that you aren’t spending more than you have to. Even if you’re looking to build something affordable, there are still various features that you may want to consider. 


The cheapest way to build a house is by buying a simple-to-build stock house plan and finding a good and reliable contractor to work with. By choosing a simple design, you’re spending less money on the smaller details and saving 10-30% compared to more intricate designs.

In this article, we’ll also take a look at the following topics:

  • The benefits of these designs
  • The process checklist you need to go through
  • The various types of framing

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Here’s everything on the cheapest way to build a house.

How to save money when building a house

We’ve compiled 15 useful tips on keeping your budget down to a minimum in your quest to find the cheapest way to build a house. You can still avoid sacrificing the types of features that are extremely important to you. Talk to your architect or contractor and see if they agree with these tips.

How to save money when building a house

  1. Buy a large piece of land and share the cost with someone else looking to build.

    It’s always nice to have a large piece of real estate. However, your financial situation may not always make that possible. While this may be a perplexing problem, there is a way to get around it. You’ll be able to get a great building site at an affordable price. How? You get someone to share the cost to pay for the lot. A close friend or a family member whose friendship you value may be a good option. More importantly, someone whom you wouldn’t mind having as a neighbor.

  2. Get a cheap waterfront property.

    If you desire to build a house that overlooks the water while still on a budget, opt for a canal instead of an ocean property. This option helps you save a lot and help allocate the funds to other parts of the project.

  3. Buy low-maintenance materials

    Clay and concrete tiles, architectural asphalt shingles, and galvanized steel and aluminum are good examples of this. Their cost may indeed be high when you initially install them. Their long-term benefits will justify the initial cost, which gives you a lot of advantages in the long run.

  4. Use salvaged materials from demolition sites to supplement parts of your home.

    Quality hardwood doors using bricks and old barn wood from demolished buildings have surprising benefits. They’re cheap to acquire. Some are even given away for free, but they can last long if you refurbish them. Talk to the owner first before you haul them away.

  5. Prioritize your expenditures.

    It’s okay to spend on things you absolutely cannot live without. However, don’t neglect the important structural components of your home or the windows and doors. Safety and security are paramount. You must never sacrifice these aspects to save a little bit of money – it’s just not advisable.

  6. Keep an eye out for construction allowances and make sure that you stick to the initial budget.

    In some cases, you may have to spend more than planned on the actual budget. It includes structural elements and decorative details. For example, you and the contractor agreed to use a particular brand for the insulation because of its quality. Don’t settle for a different brand, especially if he didn’t inform you of the changes and cost adjustments.

  7. Only hire a licensed contractor.

    A licensed professional contractor is worth the money when it comes to building. Their skills are invaluable to the construction process. Their connections with suppliers and subcontractors will help you stick to your budget. They often get discounts and rebates that they have previously negotiated.

  8. Avoid site preparation expenses if you can.

    You’re going to want to choose a site with the least amount of trees and boulders. Find one where none of these exist in the land, if possible. It needs less in-fill dirt and grading, so you won’t have to haul it. These things are expensive and might even cause cost overruns, and are time-consuming.

  9. Say no to change orders.

    Whether the contractor’s architect asks this from you, always say no. Change orders will add more to your projected budget. It can also be frustrating changing things in the blueprint. Plan everything out and stick to that plan, so you’ll have no regrets later.

  10. Vinyl floors work too.

    It’s safe to say that everyone loves to have ceramic tile or hardwood flooring. They’re quite expensive, so you may want to use vinyl flooring in the meantime. That is, at least until you can afford to install hardwood or marble flooring.

  11. Improve the stock plan instead of asking your architect to make a custom design.

    Don’t worry about building a house that may not be unique. You can still make the space unique by how you choose to decorate it. If you buy an existing house plan and the AutoCAD files, you can also use design software to alter them. We have listed several good ones to make your desired changes.

  12. Use your floor space wisely.

    You may think that building a garage with extra space for storage is good, but there are other parts where you can get that space for storage. You can also use other spaces in the house for any purpose, such as attic space or space under a stairwell.

Methods of New-Home Construction

Traditional Stick-Framing for the cheapest custom design

woman looking at house plans

Whether you’ve seen it on tv or in real life, the traditional way of building a house is called stick framing. This construction method started way back in the United Kingdom before the Brits colonized America. The tradition was brought to America by the colonists and then carried on to the mid-20th century when new ways of building were developed.

It got its name because workers created a skeleton for the house using 2 x 4-inch hardwood to form wall studs and joists.

Another name is platform framing. Workers start building the ground floor or first floor right on top of the foundation. Then they install the walls. Once it’s complete, they start work on framing the second floor and follow the same procedure as they did on the lower floor. The last aspect of building your frame is building the roof structure.

This traditional construction method is still popular today in the United States, even with many homes built. Today various things are often made in a manufacturing plant. Wall panels are built with stick framing and then shipped via trucks to the building site and assembled to build modularly. It is sometimes referred to as “panelization.” It is where the entire section of a wall can be constructed inside the safety of a factory.

An engineer will design a plan to include the house’s mechanical components. These components include pipes, wires, and ducts. They inserted software in CAD (computer-aided drawing) before the frame’s construction. Afterward, insulation is placed between the frames. Then the exterior is overlaid with a weather-proof finish like brick veneer and siding.

This construction method has become the staple of American homes, as the American building industry has used it for decades. The National Association of Home Builders (NAHB) Research Center reported that roughly 90% of all new houses built in the United States are stick framing. This is common knowledge to those who work in civil engineering and contractor and sub-contracting firms. In addition, you can easily buy building materials for this kind of construction method all over the country.

True stick framing is ubiquitous, but its great features do not come without drawbacks. The wall structure becomes problematic if you use moistened lumber. They can shrink and warp once they dry, creating cracks on your drywall. Putting in insulation also becomes a problem.

The drywall cracks will let air in and force your HVAC system to work harder during the fall and winter seasons. However, the architect or contractor should anticipate such problems and avoid using moistened wood. It’s great for an inexpensive house.


  • Cheap
  • Easy to install
  • Versatile


  • Degrades over time
  • Prone to supply issues when there are lumber-eating beetle infestations.
Cheap housesCharacteristics
Ease of accessIt depends
Are fireplaces typical?No
Is it good for natural light?Reasonable
Are garages commonNo
Typical ceiling height9 foot
Typical number of bedrooms and bathrooms3 & 2
LimitationsSmall rooms
Low budget?Yes
Is it easy to modify?No
Simple vs complex layoutSimple

Light-Gauge Steel

This method of building is almost similar to wood stick framing, except that it uses metal bars instead of lumber. It provides a rigid frame for the entire structure. When paired with the posts, it will enhance the overall strength of the house. You also get the added benefit of a fire-proof frame and zero rust. There will be no drywall cracks and a termite-free home.

You’ll be happy to know a well-established supply chain for light-gauge steel. It has been used in creating the interior partitions of commercial buildings for more than half a century. But you should also be aware that it may cost more than traditional stick framing and that prices fluctuate and vary from place to place.

One drawback of steel framing is that steel studs are a good heat conductor. This could create a problem with electrical wiring and plumbing. The contractor ought to already know about this and take necessary precautions to avoid problems with heat transfers from the metal bars.


  • No threat of termites
  • Durability
  • Not bio-degradable
  • Fire resistance


  • Studs conduct heat
  • Installation

Modular & container homes for a cheap tiny home

A modular home is made or pre-fabricated in a factory. This is an efficient way of building in modern times and has become more popular as shipping containers are turning into modular ones. Once a module has been completed, it is covered with protective sheathing and transported to the building site. There, the contractor assembles the various modules and forms a hoe. It’s important to note that a modular home differs from a mobile home. The latter is built as a complete package with zero modules, whereas a modular one is built separately with modules.

At first glance, they may look the same. Two halves of a simple box are assembled at their building site. They come in different qualities with different interior functionalities. Some are built like 5-star hotels. Others are minimalist modern designs. A few are environmentally friendly and 100% off-grid. Some are designed with architectural prowess too! Container homes today offer many possibilities and can be the dream home for the family on a budget.


  • Cheaper
  • Efficient
  • Simple
  • Fast
  • Not prone to delays


  • Limitations with models
  • Homes need transportation
  • Site constraints

Structural Insulated Panels

woman choosing design options

A Structural Insulated Panel is a sandwich composed of two oriented strand boards (OSB) between rigid foam insulation. It creates a solid structural panel. SIPs are pre-fabricated with channels for electrical wiring and pipes. Other similar inlaid materials and pre-cut doors and windows are also included. They’re often used as cladding for stick frame panels or post-and-beam structures. A contractor can use them to create an entire house. SIPs will require less HVAC use as the insulation is already installed.

Contractors say that the overall cost to build using SIPs is roughly the same as building using stick framing. They use less manpower to assemble the panels even though the SIP material costs more than traditional hardwood.


Around 70% of the infrastructure in the world uses concrete, especially in commercial buildings and in earthquake-prone areas. However, you will rarely see it in single-family homes in the United States. Typically, the type of concrete that appears in residential places in the United States includes either concrete masonry units (CMUs) or insulated concrete forms (ICFs).

Types of concrete for construction

Concrete Masonry Units:

CMUs are hollow concrete blocks stacked in interval patterns from the ground up. They are reinforced with steel retainers to enhance structural strength. They are covered with foam insulation board either inside or outside to keep the interior at room temperature, even on hot summer days. CMU homes are popular in the Southern United States, particularly in Florida.

Autoclave Aerated Concrete (AAC) blocks

You could even consider this type of concrete as an environmentally-friendly material. It is made from Portland cement, aluminum, fly ash, and other additives. Some of these ingredients are deliberately placed into an AAC block to prevent pollution, which is good. They were also specifically selected to be mixed because their chemical reactions create microscopic air bubbles that help insulate the structure when mixed.

Insulated Concrete Forms:

ICFs are made from hardened foam that looks like Lego blocks that contractors assemble at the construction site. They are then reinforced with steel rods and poured into wet concrete to form the frame. ICFs are good for two things. They are good for thermal insulation and noise reduction. When mixed with concrete, they can withstand high winds. In some cases, they can even withstand hurricanes and tornadoes. Concrete is also good against termites!

Styles to consider
Small ranchTiny homeSmall, with a garage
Small, 2-bedroomSmall & luxurious5-bedroom
engineer inside a building being built


We emphasized that home financing is important in building a new house. It is equally important that the house you’re planning to build is affordable. You wouldn’t want to get stuck with a home you can’t afford, would you? Many aspiring owners go to realtors to look for a new house.

They are oblivious that they could save a ton of money if they build their own instead. You can ask contractors. They will tell you that most customers are very satisfied with building something new rather than buying an existing one. This is especially the case with the options it presents.

Building a new home allows you to prioritize certain parts of the house that need to be built first. Then you can continue building the rest once you’ll have more money to allocate to the rest of the house construction process. It also limits or outright prevents you from borrowing money.

Like any shopper, you probably have lingering questions on your mind. It’s okay to ask them. Shoppers want to know how many bedrooms the house has and the number of bathrooms. Deciding those is just the start! If you’re having trouble weighing your options, consider why building an affordable home is much better than purchasing one.

  • You control the outcome of the final product.
  • You decide how much of your budget goes to each part of the house.
  • Building a new house means installing a brand-new HVAC. It means you will have to do less maintenance work. Enjoy the benefits of energy efficiency. Go a long time before costly maintenance costs start racking up.
  • New construction can help you avoid toxins like mold and lead paint.

Deciding to build your own house can be hard, so take as much time as you need to think about it before making that decision. It’s a leap of faith, and it can be a bit scary sometimes. If you work with a good building contractor, choosing to build your own house can be one of the most rewarding things you will do! To make construction more affordable & cheaper, you’ll want to read this entire article.

Cheap housesCharacteristics
Price$8,000-1,500 house plan prices
Mistakes to avoidEach floor being too small
Typical sizes1,000-1,800 square feet
Design features we loveEfficiency
An alternative style that we recommendMinimalist houses
designer working on blueprints

Different Methods For Building

Together with your home building contractor and your architect, you will have to talk about how you could save on the construction. There may be local incentives you can take advantage of.

In the United States, using the traditional stick framing method is common when building a house, as wood is abundant. However, advancements in construction have come a long way. New methods include light-gauge steel and modular homes built indoors.

Other examples are ones built with structural insulated panels and homes built with reinforced steel and concrete. They are now increasing in popularity. Here are some modern construction methods you need to know before designing and building your new home.

With this guide on how to build a cheap house, you’re en route to make your dream come true.

Shape ​

One of your primary concerns for your building project is finding out how to build without spending too much money. Opting to build a two-story home could be the way to go. Most of the money on house building will go to the foundation and roofing. This way, you’re saving more when you construct a two-story house. You can’t be unhappy about the additional square footage that it brings!

But following the rule of efficiency, you may want to stick to a simpler house design. Keep the design square or rectangular and keep the roofing style simple. Complicated designs will increase the cost of building the roof.

The more complex the design is, the more expensive it is to build it. Adversely, a simpler design is cheaper to build and will save you more money.

Our most popular styles distinguished by shape are the H-shape and the angled-garage options.

You also get homes in these shapes:

  • A-shape
  • Round
  • Tower


You can save a lot on utility expenditures if you spend enough money on insulation when you build your house. Building one that’s well-insulated from the start will help you save money on your utility bill for many years to come. You can even save money on buying your very first HVAC equipment. You’ll only need a smaller HVAC system to keep a balanced temperature inside your home.

Refusing to spend on house insulation often results in leaks. This will cause drafts that will make your HVAC system exert more effort to fight it. More effort means more energy, which will cause more money on your gas and electricity bills.

Here are some different types of insulation:

  • Spray foam
  • Blanket Batts and Rolls
  • Blown-In Insulation
  • Foam Board or Rigid Foam Panels

Appliances and Fixtures

According to HomeAdvisor, people often spend $65,000 when building their kitchens. It includes buying all the appliances you need to make home-cooked meals. On the high-end, some people will spend as much as $130,000 to get the right tools for their kitchen that match the look and feel. However, this isn’t needed if you are on a budget.

You can buy cheap yet useful kitchen appliances that still make it a delight to make home-cooked meals. You can also mix your kitchen range with different appliance brands to get more from your budget.

Here are some common appliance brands to consider:

  • Whirlpool
  • KitchenAid
  • Kenmore
  • General Electric


contracator looking at house plan

We are faced with whether to save money and keep the interior design minimal to save money. Alternatively, you can spend more per square foot to make it look grandiose.

Indeed this is such a predicament! But did you know that you can do things to get still the things you want? For instance, you can install large picture windows to make the room appear bigger.

The benefits of this type of window are that it lets more sunlight in, meaning you won’t need a bunch of artificial light during the day.

Another good idea if you decide to go for huge windows is having an open floor plan. An open floor plan is like a living room within your living room. It allows you to entertain several guests even if the room’s total square footage isn’t that big.


When talking about the land where you want to build, it comes down to two things:

  1. Do you already own a piece of land?
  2. Are you planning to buy one?

If you already own the property you desire to build on, consider a few things before starting. Does your piece of land have shrubs or trees? If so, then how many of them need to be cut down to make room? What is the soil condition of the land? How much will you spend to lay out the foundation? All these things will factor into how much the entire project will cost. Some of the other things that you’ll have to consider include:

  • Is the land a flat plain, or is it full of hills? Does it need to be evened out? How much will it cost?
  • Are there boulders in the area? How much will it cost to remove them?
  • Perhaps you have a narrow lot you’re working with, or you have something that would lend itself well to a Mediterranean home.

Energy-Saving​ Building

When you are looking for ways to save money on homeownership, you may want to take a closer look at energy-saving measures. Look for the most efficient appliances and check out your country’s energy rating labels. By doing so, you find the best appliances that have myriad ways of lowering your bills every single month.

By choosing the right appliances and faucets, you’ll not only save the planet but will also cut back on your expenditures. It is good for your finances.

You can also opt for a semi-off-grid or total off-grid living by using solar panels. A couple of battery banks can help supplement the electrical energy for your house. If you’ll ask whether you’ll still have an electric bill, the short answer is yes.

You will still receive an electric bill when you install solar panels. It won’t ask you to pay anything, especially if you’ve opted to go 100% off-grid. It will simply indicate how net metering credits offset your usage for the month.

Before starting, don’t forget to talk to an architect or a building contractor. They have the skills and experience to guide you in making the right decisions.

Here are some ways to make a house energy-saving:

  • Good insulation
  • Triple pane windows
  • Energy-efficient appliances
architect working on blueprints

Benefits of cheap house construction:

  • Uncomplicated construction process
  • Lower building and maintenance costs
  • Efficient use of limited space

Cons of cheap houses:

  • They don’t have the spaciousness of bigger options.
  • May not include high-end finishes
  • Limited storage options
  • Limited customizability

Process checklist of steps to building a house

1. Know your budget, make adjustments, & consider building materials

First, find the house plan that matches your dream vision. Look for cost estimator software to determine the approximate amount you need to spend to build your dream space. There are plenty of cost estimators available online. Maybe you’re working with a tight budget. Having a realistic budget before having an architect or contractor build your house would be advantageous.

These principles apply whether you’re building an L-shaped home or a mansion.

2. Plan how you want the floor plan to be divided.

The cost to build is usually fairly proportional to the size and how complex the overall design is to be made. So make sure to have the architect divide the spaces of your floor plan efficiently based on how you want to use them.

Purchase a floor plan or have one designed by your architect with plenty of flexible living spaces. This ensures all your family needs are addressed accordingly and no square footage is wasted.

3. Determine how you want to use and experience your floor space

Ultimately, how the architect will draw the different spaces of the floor plan of your house will be based on how you want to use it. If you love to host gatherings for your family or friends, the architect will suggest you design an open floor plan.

Maybe you’re the type of person who loves to have defined spaces like home offices and living rooms. You’ll want an architect to design a compartmentalized blueprint.

Which features are important to you?

  • Being able to entertain
  • Open spaces
  • A mountain retreat

4. Pick a design that suits the location & style

Your design has to be appropriate for the location where it will be built. To give you an example, a single-detached option for a family of 3 – 5 is perfect for the suburbs.

What it will lack in interior space, its exterior space will make up for. You can imagine a sizable front and back yard that comes with it. However, this design will not work in highly urbanized areas. When you live in the middle of the city and have a very small plot of land, you have very few options when it comes to floor space.

You’ll have to expand upwards instead. While this type of design may not include the amenities available in the suburbs, there are public parks that you can go to and unwind at instead.

Here are some additional factors to consider when choosing the right design. Even if you want a cheap one, you may still want one with a walkout basement.

Special factors to consider
ContemporaryNarrow lotLakehouse
AffordableWalkout basementSmall mountain retreat
architect looking at drawings

5. Write down some necessary amenities & cost of each

We all love family heirlooms, and probably a couple of you guys have them in your current home.

Moving your stuff to your new one can be challenging because you might need to carefully consider the floor space and where all this furniture can be placed. A good example is your grandma’s red oak hardwood table or your mom’s dresser.

You’ll need to talk to your architect and discuss how the interior decoration will blend these antiques into the overall design. You don’t want it looking like furniture was randomly thrown in there.

Features to include:

  • Adequate storage space
  • Minimal detail to avoid budget overruns
  • Efficient use of space to maximize square footage
  • Straightforward design

6. Some of your needs require modifications

Maybe you want to ensure your project is successful. Consider all the possible challenges and circumstances before asking your architect to design your perfect dream vision.

The more things you forget, the more modifications to the floor plan will be needed later. Some modifications will be due to budget constraints.

However, this is also good as it will help you work within your budget and maximize floor space. Talk about all your family’s needs before the architect starts drawing anything.

For instance, you may know that your new home must have three bedrooms.

7. Follow the blueprint down to the last detail

One of the things to do to save money along the way is to follow the blueprint down to the smallest detail. You have your architect or contractor whose job is to make sure that this is the case. Keep in mind that they’re going to follow your specifications. So if you get caught up in some of the smaller details, you might miss out on some of the larger things.

Modify the floor plan as much as you desire to accommodate everything you’ve considered before the construction, not after. Making changes once construction has started is very expensive.

8. Learn to live with the fact that no design is perfect

Even with the help of professional architects and with preparation, there may be things you wish you would have done differently. Still, you can be sure that you’re closer to it than those who did not take the time to do a lot of early planning. Do you remember those large windows that we’ve talked about earlier?

They will save you money on the electricity bill throughout the spring and summer seasons. They might be a problem when fall and winter come. They will make your HVAC work more unless you can make a custom outer protective cover for them with proper insulation.

Another issue could be noise concerns associated with an open floor plan. Noise travels easily to the adjacent rooms and might cause some nuisance to other people living there. You may have to give up certain aspects of your dream as you can’t have it all!

What are some features you couldn’t be without?

  • Great views
  • Lots of open spaces
  • Extra bedrooms

9. Trust your instincts when you build

In the end, you will have the final say as to how it will be built. Some designs may seem great on paper, and they might not turn out to be a good idea in the end. Other ideas will make a lasting impression on you. The bottom line is to make sure that the house will work out for everyone in the family.

Otherwise, you’ll end up with family members complaining and regretting your decisions. Your gut feeling will let you know certain ideas work and that trust your instincts is a good idea. An architect may tell you that other ideas may not work as intended.

Mistakes to avoid:

  • Skimping on structural components
  • Not getting a functional design
  • Not getting enough storage
  • Failing to plan for future needs
  • Overloading the space
woman studying a model of a house being built

Final note

woman choosing colors

Now that you’ve been made aware of the different construction methods, it’s time to decide. Ensure you hire a licensed architect or contractor with years of experience. Depending on your chosen method, hire a contractor with the necessary experience using that type of process.

Hiring the best contractor team to assemble your house will be detrimental to your home’s overall quality and durability. You will enjoy living there for many years if they do it right. Otherwise, you might have to hire a different contractor to make costly repairs.

Hopefully, you’re now more familiar with the cheapest ways to build a house.

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