Major life changes like getting laid off or going through a divorce can really upend your finances.
When your income fluctuates, it’s crucial that you be ready to pivot your spending.
Planning for different budget levels is like adding guardrails to your spending, he said.
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Outline a Lean Budget for Times of Hardship
Consider your lean budget to be yourbare bones budget.
It should only cover your essential expenses what you absolutely need to survive.
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Your lean budget will show you the least amount of money you might live off of.
There are many different ways to structure your budget.
If you want to keep tabs of every dollar you spend, use azero-based budget.
A fat budget is a plan for spendingif you experience a salary boost or financial windfall.
Give yourself realistic parameters to work with.
How would you want to use those additional funds?
But while youre making responsible choices, dont forget to add in some rewards.
Your fat budget is your moderate budget, but with enhancements, Northrup said.
Think of this like turning up the money dial on things you love.
If youre into gaming, you could put money aside for the latest console and an upgraded headset.
If you have a passion for crafting, your fat budget might mean more shopping sprees at Michaels.
If you love traveling, you could book more trips.
Nicole Dow is a senior writer at The Penny Hoarder.
Probably not as good as youd like.
It always seems like an uphill battle to build (and keep) a decent amount in savings.
But what if your car breaks down, or you have a sudden medical bill?
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