One of the most important functions of project management is the preparation and control of the budget, which will ensure the implementation of the project and the achievement of project goals within the given financial and other limitations. The purpose of this paper is to point out the importance of careful budget planning before the start of the implementation part of the project and the importance of optimal budget management during the implementation of the project. The paper defines the basic terms of the cost management process through three main parts of the process: cost estimation, budget preparation and budget control. The paper describes the types of costs that may arise during the life cycle of the project, the structures that are the basis for cost estimation, and the different strategies used for cost estimation. Furthermore, the principles of an effective budget and the process of optimizing the time of project realization and optimizing the allocation of resources with the aim of forming an adequate budget were explained. The empirical part of the paper investigates two case studies – T-REX project and Big Dig project, in which different management approaches were applied in planning and cost management, which had a significant impact on project outcomes.