Narrative A budget narrative is useful in defining the costs included on a project budget. A budget narrative often is used to explain line items in the budget. It can be structured in one of two ways. You can create "Notes to the Budget" with footnote-style numbers or letters on the line items in the budget keyed to numbered or lettered explanations. Alternatively, if there are a number of unusual line items, and an extensive explanation is required for the figures, you may want to structure the budget narrative as straight text.