Why You Might Need A Multiple Budget?
Budgeting will help you manage your personal finances. A practical budget sustains your
regular expenditures and prevents you from debt. However, there are circumstances that
necessitate more than one budget.
Here are some reasons why you need multiple budgets:
#1 – You encounter significant life changes
Life shifts and events can cost you money. Examples are job loss, giving birth, sending
children to school, or moving out to a new house. These are some of the major expenses
that happen as you grow older.
Advance planning is necessary. Modifying your budget is important to accommodate the
changes. Set aside your regular budget for a while. Create a second budget plan that
involves cutting down of some expenses.
#2 – Your paycheck comes twice a month
If this is the case, budgeting becomes a bit complicated. You need to make a bi-monthly
budget plan and factor the expenses. If the utility bills are paid during the second cut-off,
immediately separate the fund to pay them.
Sticking to one monthly budget when your paycheck comes twice a month sometimes give
you an illusion of a surplus. If you are not careful, you might spend it on something that you
want. One way to prevent overspending is to place the amount into your emergency fund.
#3 – You have a fluctuating income
If you are a self-employed or freelancer, your income is not regular, then you really must
practice the art of budgeting. You might want to create multiple budgets for every
situation. Create a budget for “lean months” when your income is low. Make a budget for
“average month” when your income is just enough for your needs. Finally, have another
budget for “ample month” when you receive more income. Save your extra money to
finance your future plans or goals.
Advance planning helps you manage your money well. Create a budgeting system that
works on any scenario of your life.