How often should you review your budget?

The frequency of reviewing your budget is crucial for effective financial management. Monthly reviews are recommended because they allow you to adjust for any changes in income and expenses that may arise due to shifts in your job, unexpected bills, or changes in your spending habits. This regular review helps to ensure that your budget remains realistic and aligned with your current financial situation, enabling you to make informed decisions about saving, spending, or investing.

By checking your budget monthly, you can identify trends and anomalies that may need your attention, helping you to stay on track toward your financial goals. It also creates an opportunity for you to celebrate your successes and make necessary adjustments if you're falling short in certain areas.

In contrast, reviewing your budget only once a year would likely lead to missed opportunities for savings or necessary adjustments, leaving you unprepared for any financial challenges that may occur throughout the year. Weekly reviews might be overly frequent for many people, adding unnecessary complexity, while reviewing every few years neglects the immediate need to adapt to changing financial circumstances.