How To Budget For Technical Debt

Written by Kevin Liew on 11 Aug 2017
14,637 Views • Miscellaneous

Are you concerned about technical debt? Do you worry that this could come back to haunt your company at some point in the future?

Even if you do your best to avoid technical debt, you know that this could pop up down the road. For this reason, you need to budget accordingly.

Before we go any further, let’s examine the basic definition of technical debt: this comes into play in software development and reflects the cost of additional work as the result of choosing a simpler solution upfront.

Simply put, some companies will choose the easy solution to start, knowing that a better option will take more time or cost more money. While they hope this doesn’t impact them in the future, they know that technical debt is a possibility.

Before we discuss the best ways to budget for technical debt, here are some of the most common causes:

  • Pressure to complete the project as soon as possible
  • Lack of funds
  • Lack of understanding of the project and what is required
  • Lack of documentation
  • Lack of collaboration among team members
  • Poor technological leadership
  • Last minute changes

Sometimes, it’s one of these things that cause technical debt. Other times, it’s a combination of two or more.

Now that we have that out of the way, let’s examine some of the best ways to budget for technical debt:

1. Take the Right Steps Upfront

Let’s face it: Tackling a software development project is more challenging than cleaning your office or even hiring a new employee.

This is why you need to take the right steps upfront. This means many things, such as knowing exactly what you want and doing whatever it takes to reach your goal.

Yes, this may mean delaying the launch of the product. And yes, this may also mean spending more money early on.

As long as you resist the urge to get ahead of yourself, everything will fall into place. This doesn’t mean you’ll never require updates in the future, but at least you know that you did whatever you could to make things right from the start.

2. Leave Money for Future Upgrades

Even if you are confident in the first version of the software, you should never talk yourself into believing that you won’t require changes in the future.

Since you know this is coming, it’s imperative that you leave money in your budget for upgrades.

For example, you may want to change everything from the photos to the color scheme – and those are just two of the simpler edits to make.

It’s always a good idea to set some money aside for the future. This will allow you to better budget for technical debt, since you won’t have to search for the funds when required.

3. Talk to Your Developer Upfront

The last thing you want is a big surprise in the future when your application calls for a change. This is why you should work with your developer upfront to agree on a price for future changes.

Once again, this allows you to better understand how much money you may have to spend down the road.

Budgeting is all about knowing your numbers and preparing for the future.

What About Your Credit?

Any time you talk about budgeting and debt, you need to take a closer look at your credit score.

There are free credit repair services out there that can help you boost your score in the months and years to come. Yes, it’s an uphill climb, but once you reach the top it’ll make your life much easier as a business owner.

For example, you may find that you don’t have the money you need to pay for a future upgrade to your software application. With good credit, you can apply for a business loan to ensure that you can move forward with your project.


There is no sure-fire way to guarantee success when budgeting for technical debt, but there are things you can do to feel better about your situation.

What are your thoughts on technical debt? Have you ever had to budget for this in the past? What steps did you take to reach your goals? Share your personal experience in the comment section below.

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