Budgeting is like creating a roadmap for your project’s money. It’s super important because it helps you plan and track where every dollar goes. Imagine you’re organizing a school event like a dance. With a budget, you can figure out how much you need for decorations, food, music, and more. It keeps you from running out of money and helps you stay on track with your spending. Plus, it’s a smart way to make sure you have enough funds for everything you want to do, so you can throw the best dance ever! 

Creating a budget helps determine how much money is needed for a project, how to track expenses and how to utilize the budget throughout the project.

• Estimate Project Costs

Create a list of things that are needed for the project that you plan on starting. Consider materials, resources, labor, marketing, technology, transportation, and any other relevant costs.

• If you want to practice the list of project costs here are some scenarios.
  • Community Service Project: Estimate costs for a community service project like organizing a clean-up drive or starting a food drive by budgeting for supplies, volunteer training, transportation, and promotional materials.
  • Event Planning: Estimate costs for organizing a school dance or a charity fundraiser. Budget for venue rental, decorations, catering, entertainment, promotional materials, staff, and contingency for unexpected expenses.

• Track Project Finances

It is important to monitor expenses throughout the project, identify variances (differences in projected cost and actual cost, and adjust budget allocations if necessary.

To do this, create a google sheet for your budget. If you don’t know how to do that, here are some steps to follow.

1. Open Google Sheets: Go to Google Drive, click on “New,” and then select “Google Sheets” to open a new spreadsheet.
2. Create a Header Row: In the first row, create headers for different categories such as “Expense Description,” “Estimated Cost,” “Actual Cost,” “Notes,” etc.
3. Format the Cells: Format the cells as needed for better readability, such as aligning text, adjusting column width, or applying borders.
4. Enter Expense Details: Start entering your expense details under each corresponding header. For example, list the expense description (e.g., “Materials”), estimate the cost, leave the actual cost blank for now, and add any additional notes if necessary.
5. Formulas for Calculations: In the “Actual Cost” column, you can use formulas to calculate the actual expenses. For example, you can use formulas like “=SUM(B2:B10)” to automatically calculate the total of the estimated costs entered..
6. Color Coding: You can use color coding to visually differentiate between different types of expenses or highlight important cells. This can make it easier to identify key information at a glance.
7. Keep Track of Actual Expenses: As you incur expenses during the project, regularly update the actual cost column to reflect the real expenditure. This will help you track your budget and make adjustments as needed.
8. Find Your Variances: Subtract the estimated costs from the actual costs to find the budget variance for each category. A positive variance indicates you spent less than expected, while a negative variance means you overspent.
9. Review and Analyze: Periodically review your budget sheet to compare estimated costs with actual expenses, identify any discrepancies, and evaluate your spending patterns.
10. Share and Collaborate: Google Sheets allows for easy sharing and collaboration. You can share the budget sheet with team members or project stakeholders to keep everyone informed about the project finances.

• Create a budget template for your project.

Share your budget on the path and comment on another project’s budget.

To continue, return to Module 3 Opportunity Card.