A budget done well disciplines spending and surfaces variance for review. A budget done badly is spreadsheet wallpaper - set once, never revisited, ignored after month three.
Definition
Budget - a planned commitment to spend a specific amount in each category over a defined period (usually a year), used to discipline spending decisions and surface variance for monthly review.
Common uses
- Spending discipline - the constraint that prevents drift
- Resource allocation - clarifies what gets funded vs deferred
- Variance review - monthly comparison surfaces what's working vs not
Watch out
A budget without monthly review provides no value beyond the initial planning exercise. Discipline comes from revisiting, not from setting.