Holding Cost Calculator

Why this number changes decisions

Most cost overruns that look like material or labor problems started as schedule problems. When you can see what a month costs, several decisions get easier: paying a premium to expedite a long-lead item, hiring a second crew, accepting a slightly lower offer to close sooner, or ordering materials before the price moves.

What drives it

• Interest — usually the largest line on a leveraged project, and it accrues whether or not work is happening.
• Taxes and insurance — fixed, unavoidable, and often billed in lumps that surprise the unprepared.
• Utilities — higher during construction than most people budget, especially with temporary heat in winter.
• The invisible line — your own supervision time, and the opportunity cost of capital tied up in a project instead of the next one.

Use it as a decision tool

If expediting a long-lead item costs less than one month of holding cost, expedite it.

That single test resolves most scheduling arguments on a job site, and it is why builders who track holding cost finish faster than builders who track only the budget. For where the rest of the budget leaks, see our cost-control guide.