It’s almost the holiday season, which means I’ve been doing some damage to my wallet this month.

• $876 on Christmas presents
• $385 on eating out, mostly catch-ups with old friends
• $147 on face moisturizer (stocked up as it was on sale)
• $105 on changing my tires for the snow season

The list goes on and on.

In fact, I’ve already spent twice what I allotted for the “miscellaneous” side of my budget!

But after years of tracking my expenses, day in and day out, I fully expected an increase towards the end of the year.

Does it sting a little every time I tap my credit card? Absolutely.

Am I worried about going over my budget this month? Absolutely not.

You’re doing fine

I often see people stress about going over their budget in a certain category for a month. They might go out for a nice dinner, but then freak out when they see that they’re over their monthly food budget by $200.

Life’s expenses don’t fit perfectly into a monthly budget.

You won’t spend exactly $400 on groceries or exactly $100 on gas every month.

The fact that you’re even budgeting means you’re already ahead of a lot of people.

Most people spend what they earn, or sometimes, even more than what they earn, without saving a penny. This leads to accumulating things they don’t need and racking up bad debt.

By tracking your expenses, you’ll at least know where your money is going at the end of the day.

So what do you do when you go over your budget?

Introducing: Flexible budgeting

Like most things in life, budgeting should be flexible.

Life happens and seasons change. Not to mention emergency situations.

Otherwise, you would be doing the exact same thing every single day, eating the exact same foods, with no variance in your daily life. That’s not how this works.

Let’s look at an example of flexible budgeting.

The 50/30/20 rule

For this example, we’ll use the 50/30/20 rule based on after-tax income.

• 50% of income on needs
• 30% of income on wants
• 20% of income on savings and paying off debt

Let’s say I make $80K/year. After taxes, I’ll take home around $60K/year.

• 50% needs = $30K/year
• 30% wants = $18K/year
• 20% savings = $12K/year

I’ll start the budget by splitting my needs and wants into smaller categories, such as rent, groceries, and entertainment. Then I’ll spread the amounts evenly across 12 months.

But you’re making a huge mistake if you stop there.

Since I’ve been tracking my expenses for a few years, I know that seasonality will affect certain categories in certain months.

Spending on gifts will increase in December, so I make room for an extra $500 in that month.

I usually go on a vacation or short trip in the summer, so I budget an extra $2K somewhere from June to August.

And then I’ll reallocate the rest of the budget after taking into account these special events and expected large purchases.

This way, my budget reflects my real life more accurately.

Average your life out

Now that the budget is set up, it’s time to start living.

But oh wait, even with seasonality accounted for, I still went over my budget for the month!

Don’t worry, it’s not the end of the world. Just average out the rest of your year.

A very basic example

If my monthly food budget averages out to $400 a month, but I spent $500 on food this month, I’ll cut back my spending to $300 next month.

Problem solved. I’m still within my budget for the year.

I like to keep a running average of my monthly expenses year-to-date, so I can gauge how far my spending has been above or below the average. This helps me adjust for the rest of my year to stay within my annual budget.

The only constant in life is change

A budget is a plan to help keep you on track of your financial goals. Whether it’s saving for a down payment or paying off student loans, a budget can be necessary to get your spending and savings in check.

But plans change more often than not. A captain wouldn’t sail into a storm if there was a way around it. In the same way, when life throws you a curveball, you should be flexible enough to adapt to the situation at hand.

Because that’s real life.

Don’t get too obsessed over hitting a certain savings rate each month. And don’t worry if your spending skyrockets during the holiday season.

Just live your life by practicing mindful spending habits and paying yourself first. As long as you can adjust for fluctuations down the road, you’ll be just fine.

“It is not the strongest of the species that survives, nor the most intelligent that survives. It is the one that is most adaptable to change.” — not Charles Darwin