Financial experts often recommend that people create a budget and spending plan to track monthly expenses and keep financial goals within reach. Yet few seem to be listening. A 2014 study by the National Foundation for Credit Counseling found that only two in five adults, or 39 percent, have a budget and monitor their spending.

There’s a greater risk of overspending when people fail to budget. Then again, being a budget-stickler doesn’t guarantee stellar results either, especially if you’re budgeting incorrectly and forgetting to add in flexible expenses.

What are Flexible Expenses?

Fixed expenses and flexible expenses should be part of every budget. Yet some people only include their fixed expenses  — rent or mortgage payment, car payment and cable TV bill, in other words, costs that typically remain the same from month-to-month — when preparing a budget. These expenses, however, are only part of the equation. Without careful planning, flexible expenses, which typically fluctuate, can subtly wreck a budget and make it difficult to get ahead financially.

If you’re always in the hole or robbing Peter to pay Paul, consider reevaluating your budget plan to include flexible expenses like groceries and entertainment costs, and quarterly bills like insurance premiums, or annual expenses like property taxes.

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