Here’s one: Say you don’t want to spend more than $X; call it the Spend. How do you determine your Budget? My mistake was thinking the Spend equals the Budget.
I know, those of you who have been there before are laughing at me, and I deserve it.
Obviously (to some, and to me, now, but sadly not to me, then), your project will go over budget. By how much is a gamble, but let’s say 20%. In that case, your Spend = Budget + 20%. If you really want to cap your spending as best you can, your Budget should be about 83% of what you want your Spend to be. That way, your Spend = (83% of Spend) + 20%.
So if I really, really don’t want to spend more than about $100,000 on a project, my budget should be about $83,000. That way, with overages, additional bits and pieces that you didn’t think of, and just things costing more than you had anticipated, your Spend may end up where you wanted it. Your project may end up being a bit more modest than you had hoped when you first thought of it, though.
Lesson learned.
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