When should a person regularly review their budget?

Regularly reviewing a budget is essential for effective financial management, allowing individuals to make informed decisions based on their current situation. The best practice is to review the budget monthly or after significant financial changes. This frequency helps individuals stay on track with their financial goals and promptly adjust to any shifts in income, expenses, or financial responsibilities.

For instance, if someone experiences a change in income, such as a raise or a job loss, or if they incur significant expenses like medical bills or moving costs, reviewing the budget enables them to adapt their spending and saving strategies accordingly. Monthly reviews also help in identifying trends in spending and making necessary adjustments, fostering better financial habits over time.

Engaging in this regular practice allows for proactive management of finances rather than reactive adjustments that may come too late to avert financial strain. It cultivates awareness of financial health and ensures alignment with personal financial goals.