Table of Contents
What Is Flex Budgeting?
Flex budgeting is a straightforward and adaptable way to manage your finances by focusing on your flexible spending. Unlike traditional budgeting, which assigns specific amounts to every category of expenses, flex budgeting simplifies your financial planning by organizing your expenses into three high-level buckets: fixed, non-monthly, and flex. This approach helps you track your spending more easily while still leaving room for life’s unpredictable expenses.
Using Flex Budgeting
Note: flex budgeting is still in a phased roll out and may not be available on your account yet.
To switch from category budgeting to flex budgeting, navigate to the “Budget” tab of your account, then click on “Settings” in the upper right-hand corner. From here, you can select to apply either category or Flex Budgeting, as well as begin a “Budget Walkthrough” that will take you step-by-step through setting up your flex budgeting. You can switch between budgeting types at any time, and any settings saved with one option will be preserved in case you decide to switch back.
With flex budgeting, you will group your expenses into fixed, non-monthly, or flex buckets.
Fixed Expenses
Use this bucket for predictable, recurring expenses that don’t change much month to month and can’t easily be reduced.
Examples:
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- Rent or mortgage
- Utilities
- Subscriptions of all kinds
- Monthly insurance premiums
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How it works:
Your overall fixed expense budget number will remain the same month over month, though the actual amount spent may slightly (example: a monthly utilities cost that varies a bit from bill to bill based on usage). If you have historical data available, Monarch will auto-calculate this amount - just make sure it looks right and adjust if needed.
Non-Monthly Expenses
Non-monthly expenses are less frequent but predictable costs that occur at least once a year. Use this bucket to avoid surprises when these costs come up.
Examples:
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- Annual subscriptions
- Car maintenance
- Holiday gifts
- Seasonal expenses
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How it works:
You’ll set a target amount and a frequency for each non-monthly expense. Monarch rolls over unspent funds in these budgets, so you’re prepared when these costs arise later in the year. Learn more about rollover budgets here: Rollover Budgets Guide.
Flex Expenses
This bucket is for costs that vary month to month and are hardest to predict - but also easiest to reduce if needed.
Examples:
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- Groceries
- Restaurants
- Entertainment
- Shopping
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How it works:
Instead of setting individual budgets for each of these categories like you would with traditional category budgeting, you’ll track your total spending for everything in this bucket against one number - your flex budget. Monarch will suggest an amount for this bucket based on historical data (if available), but you can always update this number.
Updating Your Flex Budget
We know life can change fast, so we created flex budgeting to adapt right along with you. Once you have completed the initial flex budgeting setup, you can make changes at any time.
Changing Budget Amounts
To change the budgeted amount for your flex spending bucket, simply click the text box and update the amount. For the fixed and non-monthly bucket totals, you’ll need to change the budgets for one or more of the categories within those buckets to update the total budgeted amount.
Updating Categories
You might also find that you need to update the categories under each bucket. To change the assigned bucket or make other changes to existing categories, simply hover your mouse to the right of the category name and click on the gear icon that appears. To add new categories to any bucket, visit your Settings page and click “Categories,” then select “Create Category” under the appropriate group.
If you need to re-order categories in the monthly or non-monthly buckets, go into your Settings page and click "Categories." The categories can be re-ordered here, and the update will be reflected in the budget page.
The categories in the flex bucket will always appear in order of the actual amount spent, so the categories that you spend the most in will appear at the top to allow you to quickly visualize where your money is going.
| For even more insight into flex budgeting, check out our in-depth blog posts here: Flex vs. Category Budgeting: How to Chose What’s Right for You and Flex Budgeting: Simplify Your Spending With Just One Number. |
Frequently Asked Questions
What should I do if there’s an expense that falls into the flex bucket, but I want to keep a close eye on my spending in that category and know if I overspend?
The beauty of flex budgeting is that you can track categories under the flex bucket as broadly or as specifically as you want - you can dial into all, none, or some of the individual categories! If there’s a certain area within the flex budgeting bucket that needs extra attention - say you’re trying to watch your coffee spending - you can set a specific budget just for the coffee category. This allows you to see insights into your spending in that one category, while continuing to enjoy the overall benefits of flex budgeting. When you expand your flex budget to view all of the categories within it, you’ll see whether you are over or under your target spending for that individual category. However, as long as you’re still under your overall flex budget number, you won’t get a notification.
I have a category with expenses that are both fixed and non-monthly. How should I handle these?
You may find you have expenses that fall into one category, but some of the expense are fixed and some are non-monthly.
Examples:
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- You have “Child Activities” where certain payments are monthly (i.e. a monthly class charge) and some payments are non-monthly (i.e. a seasonal sport).
- Under “Groceries” you have a monthly prepared meal service expense, but you also go shopping for pantry staples and snacks.
- You pay a monthly pet insurance premium, but toys and food are purchased at different intervals with a different cost each time.
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For these types of expenses, you’ll want to create additional categories so each type of expense can be correctly sorted. For example, you may have “Child Activities - Monthly” and “Child Activities - Seasonal.” You can then place each category into the appropriate flex or non-monthly bucket.
What's the difference between a recurring expense and the fixed or non-monthly buckets?
The recurring expenses section provides a detailed, itemized view of specific upcoming expenses, including the payment dates and amounts, without grouping them into categories. It's a schedule view of your regular payments.
The fixed and non-monthly buckets, on the other hand, are part of the budgeting system. These buckets should generally contain the same expenses as the recurring section, but organized into categories and placed in a bucket based on frequency (whether they're fixed monthly costs or occasional non-monthly ones). Together with the flex bucket, this section of Monarch offers a high-level view of your overall budget.
While the recurring section is all about schedules and timing, the fixed and non-monthly sections focus on categorization and planning your overall monthly budget. Combined, they ensure you have both the details and the big picture of your regular financial commitments.
How do rollovers work with flex budgeting?
You can set any category to be treated as a rollover expense, regardless of whether the category is in the monthly, non-monthly, or flex bucket. Each bucket - and each category - will have a header showing the "budget," "actual," and "remaining" amounts. Rollovers will affect the "remaining" column and amount on both the category and the high-level bucket.
When rollovers are enabled, the remaining number is calculated from the actual amount spent during the month plus the total rolled over from the previous month.
What does “variable” mean when determining frequency under the non-monthly bucket?
Selecting "variable" as the frequency means that this expense doesn’t follow a regular schedule (unlike, for example, an expense that regularly occurs every 12 months). Instead of the system automatically calculating a monthly amount, you’ll manually decide how much to set aside each month based on your needs.
If I change to flex budgeting today, will my previous monthly budgets stay the same or will they also update?
Your historical views will also change to the flex budgeting view; however, your old category-specific budgets (as well as any overages or surpluses) will remain and you’ll be able to view these just like you always have.
What does "Available Flexible Budget" mean when I expand my flex view?
This is the amount of money that can still be allocated to individual categories under your flex budget. This step is entirely optional - you can track individual amounts for all, none, or just a few of the categories that you've sorted into your flex bucket.
I don't have a regular monthly paycheck - my income varies regularly. How do I determine what number to use?
If your income is variable, you’ll need to estimate your annual earnings. You can do that in one of two ways:
1. Project your annual income based on what you’ve made so far this year; this works best if you have a good sense of what you’ll make based on a longer work history, but you can always re-evaluate it quarterly or monthly to make sure it’s accurate. The more variable your income, the more frequently you’ll want to revisit and tweak.
2. Use your average spending across all your spending buckets to set a target for your net income (after taxes and any business overhead). This works best when you have control over how much or little you earn by taking on extra contracts, clients, or shifts.
How are the categories in the fixed, non-monthly, and flex buckets sorted?
Categories within the fixed and non-monthly buckets are sorted according to the sort order in your Category Settings page. Categories within the flex bucket are automatically sorted based on the actual spending in that category, with the areas with the highest spending at the top.
What’s the difference between flex budgeting and category budgeting?
Dive deeper into the differences between flex and category budgeting in our blog post: Flex vs. Category Budgeting: How to Chose What’s Right for You.