The year 2020 taught us to expect the unexpected. For the year ahead, consider making a budget with that in mind.
“There’s no reason to set a budget for the whole year,” said Abigail Sussman, associate professor of marketing at the University of Chicago. “A year from now is really like 20 years from now. Time isn’t normal right now.”
Enter the micro budget. Instead of setting a budget for the year, or even for the season, try structuring your spending and saving plan on a much smaller scale.
This approach has several key advantages: You’re able to better monitor your cash flow, pivot plans with greater ease and reclaim some of the “fresh start” energy as the new year arrives. Here’s how it works.
The Small Budget
Choosing a time frame that works for your budget—say, a month, a pay period or even a handful of weeks leading up to a big event or purchase—is key to your success.