Finance and Sourcing · tool 3 of 7

Budget and Reserves

Budget and Reserves: builds a budget that survives contact with reality.

Best for: After estimating · Time: Half a day
Domain: Finance · Focus area: Planning

How it works

The cost baseline is your approved, time-phased budget. Contingency reserve covers identified risks and sits inside it. Management reserve covers surprises, sits outside it and needs management’s approval to use.

• Contingency: known-unknowns.
• Management reserve: unknown-unknowns.
• Check timing against funding limits.

How to apply it

1. Add up estimates by work package.
2. Add contingency based on the risk register.
3. Time-phase it, month by month.
4. Agree management reserve with the sponsor.

Use it

• Template: Project Budget (blank), filled example
• Playbook: We are over budget

Last reviewed 2026-11-02 against the PMBOK® Guide, 8th edition · Practitioner review pending · How this guide is made