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What is a Budget Variance?

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Budget variance is the difference between the budgeted amount and actual spend for a department, team, project or activity. This is often expressed as a percentage of the budget.


If you have spent 120% of budget then you have a 20% budget variance. It is also possible for a budget variance to be an underspend such as a project that comes in at 50% of budget. Although this is favorable, it is viewed as a planning error that unnecessarily committed funds to a project that weren't needed. As such, it is common for the effectiveness of financial planning and control to be evaluated by variance whether positive or negative.
Overview: Budget Variance
The difference between budgeted amount and actual spend often expressed as a percentage of budget.
Evaluating financial planning and controls.
Related Concepts

Project Management

This is the complete list of articles we have written about project management.
Action Plan
Change Analysis
Change Readiness
Change Request
Cost Baseline
Cost Variance
Due Diligence
Fast Tracking
Issue Management
Program Metrics
Program Planning
Program Success
Project Change
Project Controls
Project Deliverables
Project Leadership
Project Outcome
Project Output
Project Quality
Project Requirements
Project Scope
Project Status
Project Support
Quality Management
Schedule Compression
Schedule Risk
Scope Risk
More ...
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Project Management

A guide to project management.

Change Characteristics

A list of change characteristics for change management.

Change Readiness

An overview of change readiness with examples.

Schedule Risk

An overview of schedule risk with examples.

Schedule Compression

An overview of schedule compression with examples.


An overview with schedule crashing for projects with examples.

Fast Tracking

An overview of fast tracking with examples, advantages, disadvantages and alternatives.

Scope Risk

An overview of scope risk with examples.

Project Requirements

An extensive list of project requirements including functional and non-functional examples.

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What to put in a project proposal.

Terms Of Reference vs Project Charter

The difference between a terms of reference and a project charter.

Project Charter

The common elements that are included in a project charter.

Program Management Examples

An overview of program management with examples.

Common Project Risks

A list of common project risks.

Lessons Learned Examples

An overview of lessons learned with examples.

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Project Status

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