A budget overrun occurs when the actual expenses of a project exceed the planned budget. This can happen for various reasons, such as unexpected costs, poor planning, or changes in project scope. Budget overruns can affect both small projects and large initiatives, leading to financial strain and potential delays. Managing budget overruns is crucial for maintaining financial health. Organizations often implement strategies like regular budget reviews and contingency planning to minimize the risk. By closely monitoring expenses and adjusting plans as needed, teams can better control costs and avoid significant overruns in the future.