There’s an old saying that “if you fail to plan, you plan to fail.” Every project manager knows that she has to create a realistic project budget before the project begins. This step is not optional because when you’re midway through your project and realize you’ve run out of money, you’re in big trouble.

Although every project is different, there are some commonalities in the steps to creating a project budget. Here are six steps to creating and maintaining healthy finances for a project.

1. Look through lessons-learned documents

If there are records of similar projects within your company, use their project budgets as a model. There’s no point in reinventing the wheel, and this will save you a lot of time and effort. You may want to talk to other project managers to fully understand how their budget models work. Also, consider having a team member look through similar activity costs from past projects to help determine the activity costs for your project. This is called analogous estimating.

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