Which statement best describes how risk management and budgeting relate in a Mega Goal plan?

• A. Risk management is optional and separate from budgeting.
• B. Contingency costs should be ignored to avoid budget inflation.
• C. Risks should be resolved before budgeting anything.
• D. Risk mitigation costs should be budgeted as line items within the baseline and tracked.

Answer: (C)

In Mega Goal planning, risk management and budgeting are handled together so the financial plan reflects what it actually costs to reduce uncertainty. When the major risks are resolved before budgeting, you start from a clearer, more certain foundation. This means the budget isn’t built on hopeful assumptions about problems that might arise; instead, the spending is anchored to actions already taken to address those risks. The result is a budget that matches a plan you can realistically pursue, with fewer unexpected shortfalls and surprises later on. The other statements misstate how risk and budget relate: risk work isn’t optional or separate from budgeting, ignoring contingency costs invites inflation and surprises, and you generally don’t wait to budget until every risk is completely resolved—you align budgeting with the process of reducing key uncertainties so the plan remains feasible.