Why Your Budget Needs To Be Flexible

The past two months have shown that unexpected events can have a big impact on your finances. No one could have predicted a year ago that our current climate would be this different. When something unexpected occurs, it is good to be able to be flexible with your budget. The more wiggle room you have within your budget, the more flexible you can be. This is a good thing when it comes to an unexpected situation.

Why Your Budget Needs To Be Flexible

One of the biggest reasons why your budget needs to be flexible is so that you can change it. I have written before about my own budget routine and that it doesn’t take long. The benefit of having a good budget routine means it can be adapted when necessary. Hence why it’s good to be able to be flexible.

What does flexible mean?

If you follow the zero budget based method, which we do, then your bottom line in your budget should in theory be zero. This can also mean that there would be no flexibility in your budget. Having a budget that an be flexible means you can adapt it to a circumstance. If you suddenly find yourself with less income due to an unforeseen event, then your budget needs to be flexible to accommodate this.

Flexible means it isn’t set in stone. So if you’ve budgeted £250 for food for the month, yet it needs to be more because of limited resources, then you can change it. This is why your budget needs to be flexible.

How can you set this up?

The first thing to do is to have a budget set up. A budget where you know exactly how much is coming in and how much is going back out. I have written this post here about improving your budget, should it not be strong enough. Having a concrete budget will help you. So if your budget then needs to be flexible, you know where to start.

After this, you need to look at the different areas, especially your debt repayment parts and your variable expenses. These are probably the two areas which can be the most flexible, if necessary. I’m not saying to stop your debt repayments, but you can change the amounts if necessary. Have a read of this post to look at starting to pay off your debt.

The variable expenses is also an area of your budget which can be changed, if absolutely necessary. If you suddenly found yourself with a reduced income, then you can strip back your variable expenses the easiest. I’m not saying it would be fun, but you can do it. Especially if you have been building your own stockpile and perhaps thinking about ways to reduce waste.

You might also want to leave more of a buffer in your current account, to help with your budget being flexible. A buffer can help with that unexpected expense and it can be up to you how much this is per month. If you were to do this, then your zero based budget would have this number left at the end, rather than a zero. Then, when you need some money in other areas, you have that bit already there. This is another reason why your budget needs to be flexible.

Do sinking funds help?

In short, yes. Having various sinking funds set up can help with expenses, but these are usually for expenses you know are coming up. Having a budget that is flexible allows for the unexpected as well. If you don’t have any sinking funds set up, then have a read of this post to get started.

Taking the pressure off you in uncertain times is the biggest reason why your budget needs to be flexible. In some ways, it might feel great to have budgeted down to the last penny but it doesn’t give you the room to change it, where necessary. There can be a balance of the two, for any unexpected financial worries that might pop up.

Is your budget flexible? Do you have any tips? Leave them below!

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