Lesson 11: Budget Tracking and Cost Management

Date: October 16, 2025
Session Time: 8:00am-12:00pm EST
Duration: 4 hours (including 15-minute exercise)

Key Learning Objective

Monitoring project expenses systematically and implementing cost control measures to ensure the project stays within budget constraints.

Lesson Overview

This session teaches essential financial management skills for construction projects, including expense tracking, variance analysis, and cost control strategies.

Main Activities (3 hours 45 minutes)

  • Budget tracking systems and tools
  • Expense categorization and recording
  • Variance analysis and reporting
  • Cost control strategies and techniques
  • Financial communication and reporting

15-Minute Exercise: Budget Variance Analysis

Exercise Description

Review actual expenses incurred so far, compare them to the original budget estimates, and create a brief variance analysis report with recommendations for cost control.

Materials Needed

  • Original budget estimates
  • Receipts and expense records
  • Calculator or spreadsheet
  • Notebook for analysis
  • Budget tracking template

Exercise Steps (15 minutes)

  1. Expense Compilation (5 minutes)
  2. Gather all receipts and expense records
  3. Categorize expenses (materials, tools, permits, etc.)
  4. Calculate total spent in each category

  5. Note any expenses that don't fit planned categories

  6. Budget Comparison (4 minutes)

  7. Compare actual expenses to budget estimates
  8. Calculate variance (actual - budget) for each category
  9. Identify categories that are over or under budget

  10. Note any significant variances (more than 10%)

  11. Variance Analysis (3 minutes)

  12. Identify reasons for any over-budget categories
  13. Note any cost savings in under-budget categories
  14. Assess whether variances are one-time or recurring

  15. Consider impact on overall project budget

  16. Cost Control Recommendations (3 minutes)

  17. Suggest 2-3 specific cost control measures
  18. Identify potential savings opportunities
  19. Plan how to prevent future overruns
  20. Note any budget adjustments needed

Deliverable

  • Expense compilation by category
  • Budget variance analysis report
  • Cost control recommendations
  • Budget adjustment plan (if needed)

Success Criteria

  • All expenses are accurately categorized and totaled
  • Variance analysis identifies specific causes
  • Recommendations are practical and actionable
  • Budget adjustments are realistic and justified

Integration with Overall Project

This exercise develops the financial management skills essential for successful project completion and teaches how to maintain budget discipline while ensuring project quality.

Previous Session: Lesson 10: Progress Tracking
Next Session: Lesson 12: Mid-Project Review