How often should an individual review their budget?

Regularly reviewing a budget is essential for effective personal finance management, as it allows individuals to make necessary adjustments based on changes in income and expenses. Life circumstances can change frequently—such as job changes, unexpected expenses, or fluctuations in income—making it crucial to keep the budget updated. By reviewing the budget regularly, individuals can identify areas where they might be overspending, areas that may need more financial resources, or opportunities to save and invest more effectively. This proactive approach helps maintain financial stability and reach financial goals more efficiently.

Reviewing a budget only once every few years or only when financial issues arise does not provide the necessary oversight to maintain financial health; it can lead to potential surprises and inadequate financial planning. Additionally, focusing solely on fixed expenses limits the understanding of the overall financial picture, as variable expenses can significantly impact one's financial situation. Regular review fosters awareness and allows individuals to adapt their financial strategies in response to emerging needs or goals.