Abstract: This study examined the effect of Financial Monitoring on Financial Overruns of Rwanda Urban Development Project (RUDP) in Nyarugenge District, Rwanda. Specifically, it assessed the effect of budget monitoring on the reduction of financial overruns in the Rwanda Urban Development Project (RUDP) in Nyarugenge District, Rwanda. It focused on regular budget reviews, comparison of actual expenditure with approved allocations, identification of budget deviations, financial reporting, and corrective action. A descriptive and correlational research design using quantitative and qualitative approaches was adopted. The target population comprised 477 stakeholders involved in RUDP implementation, and a sample of 217 respondents was determined using Yamane’s formula. Questionnaires were distributed to 192 respondents, of which 179 were returned, while key informants provided additional qualitative information through interviews. Quantitative data were analyzed using SPSS Version 25, descriptive statistics, Pearson correlation, and multiple regression, while interview data were analyzed thematically. The findings showed that respondents generally viewed budget monitoring as an important practice for controlling project spending. Budget monitoring was positively and significantly associated with the reduction of financial overruns, and regression analysis confirmed that it made a significant contribution when considered alongside other financialmonitoring practices. The study concludes that systematic budget reviews, timely financial reporting, and prompt responses to budget deviations can strengthen financial discipline and help prevent unnecessary cost escalation in RUDP. It recommends that project management reinforce routine budget review processes and ensure that monitoring information informs timely financial decisions.