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Budgets That Bend

Finance experts agree that having a family budget—deciding in advance how every dollar will get spent or saved each month—is key for fiscal well-being. But then the brakes on the car go. Your son needs braces. There’s an emergency trip to the vet. And by the end of the month, your bottom line is blown. Again. “Expenses change all the time, especially when you have kids,” says Chrissy Pate, founder of becentsable.net. Plus, if your income is unpredictable—say, due to fluctuating work hours each week or self-employment—sticking to a budget can seem like a pipe dream. But it’s not impossible, provided you reframe your thinking.

Status Quo

When life is relatively stable, stick to a middle-of-the-road budget. “A lot of people hate the B word, so I like to say it stands for ‘Baby, U Deserve Getting EveryThing,’ ” says Chellie Campbell, author of From Worry to Wealthy: A Woman’s Guide to Financial Success Without the Stress. Or you can spin it more positively by calling it a spending plan.

Create one by mapping out a year of your family’s typical monthly expenses—you can run the numbers however you wish, with pen and paper, a basic computer spreadsheet or an app like Mint or YouNeedABudget (YNAB). Include occasional bills for things like property taxes, cheerleading camp, school supplies and holiday gifts. Then add in a little more for inevitable—though not precisely predictable—costs. Divide by 12. “This is your normal operating budget,” Campbell explains. The amount in each category should guide your spending in an average month. Deposit any extra dough in a short-term savings account to cover unexpected items.

Jackpot!

Perhaps you make at least a few hundred dollars on a yard sale or score a bonus at work. (Hey, a person can dream.) Feel free to take a brief break from watching every dime. Buy a pair of shoes, sign up for a fun art class or treat the family to a night out. Whatever you do, just don’t spend all the extra money. “A good rule for windfalls is to put a third of it toward paying off debt, a third into savings and a third toward having a good time in the present,” says Campbell. Funds earmarked for savings could help build up your emergency fund (pros say you should have at least six months of basic living expenses to fall back on in case of job loss or major illness or injury) or be used to maximize your retirement contributions for the year. If you’re nearing the limit on your 401(k), check whether you might qualify for a Roth IRA at rothira.com/roth-ira-eligibility.

Belt-Tightening

A plumbing disaster or fallen tree results in a big fat bill. Or maybe there are travel expenses for a family reunion. Budget-wise, you’ll need to downshift. “In some categories, like mortgage or rent, you have no choice,” says Pate. “But in others you can definitely scale back.” If things get tight, she cuts her grocery budget by 25% and makes time to plan low-cost meals. Entertainment is another no-brainer. Put off pricey theater outings and stream movies or shows you’ve been meaning to catch up on. Borrow books and DVDs from the library. In other words, fall back on the money-saving moves you let slide when cash isn’t quite so tight.