I’m changing my budget again. It seems like I get it to where everything works…then something major changes. This means I change my budget again to fit my new financial situation.
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What I love about budgeting is that it is a living item in my case. Although it lasts a few months and flows smoothly there will always be something major that changes. I like keeping my budget close to the limits of each category as that gives me a better grip on whether I am staying within the boundaries I set for myself.
One thing that I always do is I say I will start a budget in January and have each category roll into the next month. This helps for items like car insurance which is not paid every month. During the month that I do pay the insurance, my auto expenses always go over the budgeted amount. Then the rest of the year it is usually way below as I do not do a lot of driving. If I allow the amounts to roll every month then I can effectively spread the cost of the car insurance over the entire year.
The same goes for other irregular expenses like renter’s insurance, conferences, and professional organization renewal fees and dues. I always have a spike in one month and then have a lower amount in the categories because of the zero based budget.
I think that for 2021 I will attempt the rolling budget method. I will still have a category and amount for my spending of different types but I will allow any overages or unused amounts to roll over to the next month. Then in December I will see where I stand!