Project budget

Budgets go wrong in two ways: forgotten costs and optimistic guesses. This skill builds the budget from the task list, replaces guesses with quotes, sets a reserve, and tracks the real spending as the project goes.

When to use

• After work-breakdown, before committing money.
• When collecting quotes (vendor-selection compares them).
• When spending starts to drift from the plan.

Inputs

1. The task list and deliverables.
2. Quotes, price lists, receipts already available.
3. The budget limit and how the project is paid for (savings, loan, company budget, grant).

Method

1. List the cost lines from the deliverables: materials, labor and services, fees and permits, equipment, travel, insurance, taxes, and the costs people forget (delivery, waste removal, cleaning, temporary housing, training, subscriptions).
2. Price each line from a source: a quote, a catalog price, a past invoice. Mark guesses as estimates and replace them with quotes before committing. Prices change: note the date of each price.
3. Add a contingency reserve, sized to the uncertainty of the project, and say where the figure comes from. Large projects overrun often, as Flyvbjerg and Gardner document, so a reserve is planning, not pessimism.
4. Plan the timing of payments: deposits, installments, final payments, and when the money must be available.
5. Set up the tracker: planned, committed (signed but not paid), paid, and the remaining forecast for each line.
6. Review it at each milestone: explain every gap, decide whether to use the reserve, cut scope (scope-change) or find more money.

Output

### Budget: <project> (version <n>, <date>)
| Line | Source of the price (quote, date) | Planned | Committed | Paid | Forecast | Gap |
|---|---|---|---|---|---|---|
| Contingency reserve | … | | | | | |
| Total | | | | | | |

### Payment calendar
| Date | What | Amount | Paid from |
|---|---|---|---|

Quality bar

• Every line shows where its price comes from and the date; guesses are labeled.
• The reserve is explicit and justified, never hidden inside the lines.
• The tracker separates planned, committed and paid.
• Taxes, fees and rules come from official sources with the date when they matter.
• Written in the user's language, with the terms below.

Terminology

Sources

• Flyvbjerg, B., & Gardner, D. (2023). How Big Things Get Done. Currency.
• Project Management Institute. (2021). A Guide to the Project Management Body of Knowledge (PMBOK Guide) (7th ed.). Project Management Institute.