How to Calculate Financial Variance When Budgeting for a Loss

Even the best budgets rarely turn out exactly the way that planners expect. Whenever you're planning in advance for a period of time, you'll inevitably make some mistakes in your estimates, and it's important to look closely at the financial variances that result in order to learn from those mistakes and prevent them from happening again in the future. Below, we'll go through the simple process of calculating financial variance and the more difficult question of how to work with the results.

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Budget planners strive to keep financial variance to a minimum. However, you shouldn't panic just because you have a financial variance that could result in a loss. You can usually take steps to remedy the situation and stop it from occurring in the future.

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