It can be tough to know where to start when it comes to budgeting for a project. That’s why we put together this guide that will help you get started on the right foot. By following these simple steps, you’ll have a much better chance of correctly estimating your project budget and making smart choices about which expenses to include.
Budgeting Tools and Techniques Used in Project Management
Project management budgeting is the action of determining the total funds that are allocated for a specific project. The budget is usually estimated by the project manager along with the project management team and consists of all the projected costs for the upcoming project. The main challenge in creating a realistic budget is understanding and correctly estimating individual costs for all the elements that go into the project.
Some of the things that need to be determined when calculating a project’s budget are:
- How the project’s costs would be continuously tracked until its completion
- How the costs are spread out across multiple project phases and milestones
- What tools would be used to store and report cost data
- What the plan is for situations in which the project is either under or over budget
- How the project’s budget fits into the parent organization’s overall strategy
Given below are some of the most noteworthy project management techniques that are commonly used in the industry right now.
1. Analogous estimating
This method of estimating a budget consists of analyzing an already completed project with a similar scope to the current one and using its budgeting calculations, adjusted for differences in scope, quality, term of execution or any other relevant parameters. It is not always a completely accurate method, but it can be an appropriate method in situations when there is limited information regarding the upcoming project and a quick estimate is required. This method is usually quicker and less costly than others, but can only be used by companies that have had similar projects in the past.
2. Parametric estimating
This estimating method consists of using historical data and other related variables for estimating the project’s scope, duration and total costs. This is usually achieved by researching past data, calculating various per-unit costs for various aspects that are common to the current project and adjusting the proportions to fit the scope of the new project. The accuracy of this method is usually proportional to the quality and relevancy of the historical data it is based on.
3. Top-down method
This method consists of looking at the project budget in its entirety and then calculating individual costs for each of the required processes. Each part of the overall project is analyzed, with its exact costs calculated and then compared to the initial estimates for each. Based on the results, project managers can see how cost-efficient each process is and may decide to reduce the scope of some parts of the project, so it fits within its total allocated budget.
4. Bottom-up method
Unlike the top-down method, which divides the project into multiple processes and calculates the individual costs for each, by using the bottom-up method the project manager attempts to directly generate a total project budget, with the help of their project management team. As a general rule for this method, the budget estimation’s accuracy is usually proportional to the accuracy of the information and expert advice received during the budgeting period.
5. Three-point estimate
This method uses three different calculations to estimate a budget: the most expensive scenario, the most cost-effective scenario and the scenario that’s most likely to occur. By using these figures you can roughly estimate there required budget, but also assess some of the risks involved in the project.
6. Earned value analysis
This method is a way of estimating the accuracy of a project’s budget during the execution of the project. It consists of constantly comparing the costs for each phase of the project with the ones that were previously estimated, typically by using one of the four previously-mentioned methods.
Tips for accurate project management budgeting
Consider these tips when determining a project’s budget:
- Focus on the organization’s needs. When creating a budget for a particular project, it is essential to remember that the ultimate goal of any project is to help its parent organization reach its goals. By knowing exactly how valuable a project is to the organization you can improve your odds of accurately determining its budget.
- Keep open communication with the stakeholders. Throughout the project’s budgeting and execution phases, you must constantly communicate with the people who stand to benefit from its successful completion. Depending on their priorities and needs, you can determine if the project is correctly budgeted or if it needs adjustments in scope and budget.
- Adapt to changing parameters. Various unforeseen events and situations may occur from the time a project is budgeted until its execution. When creating a budget, you need to plan for this eventuality and have enough flexibility to adapt to any change, internal or external.
Project Management Budgeting Software
Mint
Best budgeting app overall
Cost: Free
Mint is one of the most popular budgeting apps and for good reason. It is free to use, something rare among the best budgeting apps, and you get financial budgeting shared by 24 million users.
The app allows you to create a personalized budget and will then monitor your spending. It studies your spending habits and advises how to increase your savings. It will also check your subscriptions to ensure that you are not paying for services you do not need. With MintSights, you can set goals to reach financial milestones and build a stronger financial foundation. Once you connect your accounts, you can easily navigate between outstanding account balances, your monthly expenses versus spending, and even access your free credit score. Mint is compatible with not just banking accounts, but also your credit cards, loans, and investments. You can even file your IRS taxes and receive your refund through the app’s integrated TurboTax services.
Goodbudget
Best budgeting app with digital envelopes
Cost: There is a free version with ads, or you can upgrade to an ad-free plan for $7 per month or $60 per year.
Goodbudget is a budgeting app that helps you create and stick to a budget. There is available debt tracking to keep you motivated and on track. It also helps with money management so you know exactly where your funds are and how they are performing. You will have to subscribe to Goodbudget, but once you do, you will have wide access to the app through both the web and multiple phones. This means that it is easy to share your account with others, like a spouse or family member. It helps you stay connected financially even if you are physically apart, helping to prevent miscommunications and financial mishaps. All transactions are synced to the cloud so you never have to worry about certain financial transactions going missing. Review pie charts and reports to track your spending, with generated reports to show your finances in greater detail. Digital envelopes help you categorize your finances into available funds with each envelope assigned to certain expenses. It is a visual way to improve your finances through the help of virtual tools.
Personal Capital
Best budgeting app for investors
Cost: Personal Capital is free to use.
More than 2.8 million people utilize Personal Capital, and it is a portfolio tracker specifically designed to help with your investments, offering a unique digital approach to your personal finance. The app works with several different types of accounts, including your normal banking accounts, as well as investments, stocks, and retirement funds. The exclusive Retirement Planner tool helps you view your 401K, IRAs, and also your debt so you can have a complete, well-rounded portrait of your finances at the click of a button. The Cash Flow graph stacks your income versus your expenses for an overall financial snapshot that is easy to understand, plus there is an Investment Checkup tool that checks your investments, looking for ways to minimize risk while maximizing rewards. The Retirement Planner is an excellent option when you want to create and manage your retirement. You also have the option to join Personal Capital as an investment client so you can receive direct support from its financial advisors.
Pocketguard
Best budgeting app for overspenders
Cost: There are three subscription plans, in addition to a basic plan with limited features for free.
| Type of plan | Cost |
| Monthly | $7.99 |
| Annual | $34.99 |
| Lifetime One-Time Purchase | $79.99 |
PocketGuard takes a different approach to budgeting, utilizing smart algorithms to manage and track your spending. It also monitors your bills, helping to ensure that you do not miss a payment and risk falling further into debt. There is a bill tracker and organizer available as soon as you link your bank accounts. Any subscriptions you have will be automatically flagged and built into your monthly budget. With the IN MY POCKET feature, the app will automatically calculate your monthly expenses and then advise you on what is left over to spend. It also can help you negotiate better interest rates on your existing accounts, helping you save those extra dollars. It is easy to identify what disposable income you have to spend when the app does all the calculating and reporting for you. You do not have to pay to use PocketGuard, although you will need to subscribe if you want to access all of the best.
Basic Project Management Tools
1. Instagantt
If you want online Gantt software, this is the way to go. It’s designed to work with Asana (which we’ll talk about in a moment) and also allows you to link schedules from other sources. That means you only have to put in all of your information once, and you’ll be able to see it across each of your different platforms. You can set up timelines and tasks as well as managing and monitoring your teams’ workload. While you’re at it, you’ll be able to see everything in a format that works for you and your team.
If you’re not using Asana, you can still get a lot out of this system, including monitoring and assigning tasks, assigning due dates, and evaluating progress. All of these things come in several different price points that will help you work with the team that you have and keep apprised of everything that needs to be done.
Some of Instagantt’s awesome features are:
- Gantt and workload view
- Task and subtasks
- Public snapshot sharing options
- Timelines
- Multiple projects and workspaces
- Dependencies and milestones
- Critical path
- Team collaboration options: notification and task assignment
- Estimated and actual cost
- Custom view and custom fields
- Custom color options for progress bars
- Risk and priority
- Baselines
- Drag & drop
- Diverse exporting options: Excel, image and PDF
2. TeamGantt
With this tool, you’re creating workflows, and you’re doing it in a way that’s simple for people to understand and get a handle on. You can create different projects, milestones, and tasks and even use it on any of your devices. This system works on iOS, Android, Google Chrome, and Web. That means any of your users and team members can access it no matter where they are or what type of device they use. And you can check in to see just what they’re doing through the snapshot view.
You get to assign high, low, and medium priority to tasks, see how your team is doing and even set up the start dates and due dates for everything. You’ll also be able to use Gantt style timelines to keep an eye on everything. And you can try out the whole thing for free for 30 days. Then you pay based on the number of people who are on your team.
Some of TeamGantt Features:
– Drag&Drop
– Guest permission
– Baselines
– Multiple project view in one Gantt chart
– Guest permission
– Baselines
– Tasks & Subtasks
3. Asana
You want to be able to keep track of everything that everyone is working on, and that’s where Asana does well. This program gives you the ability to create the task list you want and then move it as much as you like. You also have a visual project timeline that you can use to see everything you need to get done. You can even set up your progress, note due dates, and make sure that scheduling and rescheduling are simple and easy.
What makes this application even better is that it works with several of your other favorites. You can link it to your Slack, Outplanr, Google Calendar, and Dropbox. All of these links make it easy to integrate, and they also ensure you don’t have to put in information all at once. Plus, you can choose between different fee schedules to find what works for you. From free to enterprises.
Asana Features:
- Document Management
- Project Management
- Time & Expense Tracking
- CRM
- Collaboration Tools
- Portfolio Management
- Resource Management
- Integration with Instagantt
4. Click Up
If you want to manage tasks efficiently, including managing your more substantial tasks, full projects, small tasks, and notes, you’ll want to check out this service. It’s designed to let you customize everything, so you have a system that works for you. It also enables you to do automatic scheduling with estimated times, and you can choose who gets to see what on the system. That way, when you bring your team into the system, they’re not automatically privy to everything.
You can set goals and see how they’re doing as well as changing up the view that works best for you, check on the status of projects and more. You’ll also have an inexpensive rate because this system is paid based on how many people you have on your team. You only pay $4.99 per person each month.
Click Up Features:
- Task tray
- Notepad
- Assigned comments
- Dark mode
- Integrations
- Assigned comments
- Multiple views
5. Wrike
This tool will give you the ability to communicate with your team through what they call ‘best-in-class’ collaboration. They also have document management tools and different communication features. You can even set up priorities for what needs to be done and make sure that your team is working more efficiently at the tasks that matter. If you already use Outlook, iCalendar, or Google, you can even sync your tasks or your milestones to keep everything working together.
With this system, you can use Gantt charts, which help you to create the timelines you’re looking for. You also get a more straightforward process for staying up-to-date on what’s happening in your projects so you can send the information on to your clients. Pricing is also based on the number of users that you have signed up with the service during the year.
Wrike Features:
- Critical path
- Collaborative team editing
- Folder hierarchy
6. Smartsheet
If you want your team to be able to collaborate on anything and everything, this is a great way to go. It offers you attachment options so you can upload files directly into the system from Google Drive, Onedrive, Dropbox, and many of your other favorites. You can even see who is busy and who isn’t on your team so you can contact people at more convenient times. All you need to do is take a look at the dashboard.
While you’re at it, you’re able to set up different permissions, and you can make sure everything is maintained and updated correctly along the way. That’s because it sends out automatic update requests to make sure everyone is on the same page. When you’re ready to try it out you’ll find time-tracking, reporting, resource management, and planning. It’s all entirely cloud-based, too, so you can access it from anywhere. Plus, some plans vary from $14 to $25 per month.
Smartsheet Features:
- Spreadsheet templates
- Predecessor tasks
- Automated workflows
7. Trello
Here you’re going to have a basic but easy to use a system for keeping track of all of your different tasks. You can create entirely different boards for different types of jobs, different projects, different teams, or anything else you like. What’s great about this system is that it’s a Kanban management tool, which is one of the most popular methods available. You get to switch between boards however you want and create any tasks that you want within them.
You can drag and drop your cards, add tags, fields, priority levels, and a whole lot more. The interface is user-friendly, and there are even power-ups that help you add on different features that you may need. You also can choose between different modes that range from free for individuals or small groups up to an enterprise version that’s available for each member of your team.
Trello Features:
- Kanban View
- Drag & drop
- Detailed & Quick Overviews of Front/Back Cards
- Tasks and subtasks
- In-Line Editing
- Deadline Alerts and Notifications
8. Monday
What if you could have a system that makes things easier for you and is named for everybody’s least favorite day of the week? Well, you can with Monday. This system offers you plenty of features, including following Twitter and LinkedIn threads and even commenting on different tasks. You also can customize who can access various projects. If you already use other systems, you can integrate them into your account, including Google Drive, Dropbox, and Zapier.
The open-source framework is one of the best parts of this tool, letting you create any integrations and other features you may want. You can also get more detailed reports, and you can add on any people you want, including third-party agents or freelancers. You can choose between different pricing structures depending on the size of your team.
Monday Features:
- Collaboration tool for multiple employees.
- Visual display of progress.
- Easy communication: tag people.
- Email notifications
- Execution Board – with big screen display
- Integrations: Dropbox, Google Drive, Pipedrive
9. ProofHub
The user-friendly aspect of ProofHub is one of the first things you’re going to like. From there, you’ll love that it’s got a minimal learning curve. You can organize the projects you want to create, the teams that are responsible for them, and more. You get to customize everything from the color scheme to the names and logos that you use. There are even six different language options, so you can make it work for your team even if you’re international.
When you set up each of your team members, you’ll be able to assign roles and provide only the level of access that each team member needs. You also get mobile options that work with both iOS and Android devices. On top of that, you can choose between two different versions that vary from $55 to $99 per month
ProofHub Features:
- Collaboration
- File sharing
- Gantt charts
- Idea management
- Product roadmapping
- Multi-language
- Chat
10. Teamwork
With this tool, you’re creating workflows, and you’re doing it in a way that’s simple for people to understand and get a handle on. You can create different projects, milestones, and tasks and even use it on any of your devices. This system works on iOS, Android, Google Chrome, and Web. That means any of your users and team members can access it no matter where they are or what type of device they use. And you can check in to see just what they’re doing through the snapshot view.
You get to assign high, low, and medium priority to tasks, see how your team is doing and even set up the start dates and due dates for everything. You’ll also be able to use Gantt style timelines to keep an eye on everything. And you can try out the whole thing for free for 30 days. Then you pay based on the number of people who are on your team.
Teamwork Features:
- Workload
- Templates
- Collaboration
- Board View
- Time Tracking
- Milestones
Conclusion
Properly planning for a project can save you time and money. By having a clear goal, estimating the costs, estimating the timeline, and estimating the results, you can make sure that your project is on track. While there are some tips specific to certain types of projects (like construction), all projects must be planned in a responsible manner in order to avoid wasting time and money.