Most software budgets are one number: the build quote. Then reality invoices you for everything around it, and the project that was “on budget” somehow isn’t. Here’s the worksheet I actually use — five lines instead of one — so the number you approve is the number you spend.

Line 1: Discovery — small, fixed, first

A fixed-price discovery engagement produces the requirement, wireframes, and the real build quote. Budget it separately and treat it as de-risking money: whatever you decide afterward, the blueprint is yours, and it’s the reason lines 2–5 are facts instead of hopes.

Line 2: The build — phased, not swallowed whole

Discovery ranks features by business value, which lets you budget phase one around the features that carry the return and park the rest. A phased budget also matches spending to evidence: each release shows working software before the next check clears. Cash flow prefers this; so does risk.

Line 3: Contingency — 10–15%, written down

Something true will be discovered mid-build — a workflow nobody mentioned, an edge case that matters. A written contingency turns that moment from a crisis into a line item. If discovery was thorough, you often don’t spend it; if you didn’t budget it, you spend it anyway, plus stress.

Line 4: The year-two line

Hosting, updates, watching, and small fixes: plan 15–20% of build cost per year. I’ve written a whole maintenance budget guide; the summary is that software you don’t maintain doesn’t get cheaper, it gets brittle. Put the number in the approval memo so nobody is surprised by year two.

Line 5: The people cost on your side

The budget line everyone forgets isn’t money — it’s hours. Someone on your team reviews releases, answers questions, tests with real data, and champions the rollout. Roughly an hour or two per release, plus training time at launch. Budgeting it makes it happen; projects where the client has no time are the ones that drift.

The payoff of budgeting this way

A five-line budget makes vendors comparable (ask each one for all five), makes the ROI conversation honest (returns get measured against the whole cost), and — my favorite part — makes the project boring financially. Boring budgets are the ones that finish.