Many years ago, during a visit to my doctor, he pointed out to me that I had visited him around the same time each year for the past few years for roughly the same symptoms – which were all stress related. It was at that moment when it finally dawned on me how stressful year-end budgeting activities were on me. It was also the moment when I understood how to focus my energy to minimize the amount of stress that this time of the year had on me by approaching the year-end budgeting activities from a different perspective.

I do not recall who I heard the expression “water off a duck’s back” from, but it probably has been a life saver for getting me successfully through many stressful events, including year-end budgeting. The expression brings images of ducks popping up to the surface of the water after diving under the water to eat. Remarkably, the water all rolls off the duck’s back and they are dry immediately after surfacing. I had a friend who had hair like that, but the expression “water off Paul’s head” is not quite as visually effective.

The stress of needing to take an accurate assessment of my project or department’s current condition coupled with having to project and negotiate for those resources we would need to accomplish our goals for the next planning period was much easier to handle if I could imagine the stress falling off me. Equally important in handling the extra stress of this time of year was realizing which goals were real and which goals were what we called management BHAGs (big hairy-a** goals).

My management at the time thought it was a good idea to purposefully create goals that they knew probably could not be attained in the hope that we might complete a significant portion of them with far fewer resources than we might otherwise expect to need. I’m not convinced that the BHAG approach works if you overuse it. If you have too many of them, or they are just too large of a leap, there is a huge temptation by the team to just write off the goal and internally adopt a more realistic goal anyway.

Going over earlier budgeting proposals and comparing them to what actually happened proved to be a helpful exercise. First, it provides a loose baseline for the new budget proposal. Second, it can provide a mechanism for improving your budgeting accuracy because you might notice a pattern in your budget versus actuals. For example, are the proposed budgets even close to the actuals? Are they too high or too low? Do the budgets/actuals trend in any direction? My experience showed that our tend line was fairly constant year over year, but that allocating a portion of the budget to acquiring and updating tools each year was an important part of keeping that cost line from trending upward as project complexities increased.

Do you know any useful tips to share about how to be more effective at estimating projects and performing planning and budgeting activities? Does any type of tool, including spreadsheets, prove especially useful in tracking past, present, and future projects and actuals? What are the types of information you find most valuable in developing a budget and schedule? How important is having a specific person, skill set, or tool set available to making projections that you can meet?