MW This is the biggest weakness in most people's budgets. Here's how to fix it.

By Venessa Wong

'Most people don't blow up their budget because they're careless,' one financial planner says. It happens because they neglect this critical detail.

Rising prices and inflation are the top reasons people say it is difficult to manage their finances. Financial advisers suggest building a buffer into monthly budgets to account for variable costs.

There is a common oversight in monthly spending plans that can sabotage well-intentioned budgeters' ability to stay on course, especially when prices are rising: not having a buffer to cover price shocks for expenses that can vary significantly month to month, such as groceries, gas and utilities, financial experts told MarketWatch.

"Most people don't blow up their budget because they're careless. They blow it up because the budget they created was built around an unrealistically precise number," Juan G. HernandezAriano, a financial planner and principal at WealthCreate, told MarketWatch.

To keep rising prices from showing up as credit-card debt or forcing people to dip into emergency funds, experts generally suggest that people add 10% of their regular monthly expenses to their budget to account for variable costs - and that they keep that money in their checking account, separate from their emergency funds.

This amount can be included in the ambiguous "other" line commonly included in budget templates - a line that many people may not use. People can also add in a "variability cost" budget line, said Grant Gallagher, director of financial well-being at Affinity Federal Credit Union.

In particular, the prices of "groceries, gas and utilities move around a lot during the year," HernandezAriano noted. Consumer prices rose 2.4% in January compared with the same period a year earlier, but some costs rose more steeply, according to the Bureau of Labor Statistics. Electricity prices, for example, were up 6.3% and the cost of household gas was up 9.8%.

Read more: Gas and electric bills are still painfully high for many Americans, even as inflation cools off

Liz Windisch, senior wealth adviser at Maia Wealth, said people whose spending or income is less stable might want to add a cash buffer of as much as 15% of their regular expenses. Anything higher than that, however, "may just keep money out of retirement savings or limit spending on enjoyment."

For many Americans, this advice will mean keeping an extra few thousand dollars in a checking account to absorb price increases, said Catherine Valega, a financial planner and founder of Green Bee Advisory.

Gallagher noted that in a "worst-case scenario, you can just roll that [money] into the next month's budget, or you can put it into your emergency savings fund. You just really don't want to be caught with that month-to-month surprise."

Experts suggest that people add 10% of their regular monthly expenses to their budget to cover variable costs, and that they keep that money in their checking account.

While the vast majority of Americans report using a budget, sticking to that budget may not be easy. Just 59% of people were at least somewhat consistent in following a budget in 2025, with a smaller share of low-income people saying the same, according to LendingTree (TREE). Rising prices and inflation were the top reasons people cited for finding it difficult to manage finances.

Many people dipped into their emergency savings last year for monthly bills and day-to-day expenses like food, Bankrate data show. However, these funds should ideally be set aside for one-time events, such as a medical bill or car repair, rather than to cover price increases for regular expenses, said Ashley Agnew, a behavioral scientist in the high-net-worth segment at Edward Jones. Expenses that shoot up due to rising prices or increased personal usage "can be a real hit to savings," she said.

For those without adequate savings, variable expenses can lead to high-interest debt: 33% of people who carry a credit-card balance told Bankrate the debt was primarily a result of day-to-day expenses.

Go deeper: MarketWatch's 7-day money challenge to get rich(er) in 2026

A 10% cushion may be sufficient for people with stable incomes and more than six months' worth of emergency savings, but HernandezAriano said people who have savings covering less than three months of usual expenses, unstable income, or who tend to spend emotionally might consider a buffer of 20% of their variable necessary expenses.

For many households, building a buffer into an already stretched budget can be difficult, Gallagher acknowledged. Easy, recurring savings can often be accessed by switching cell phone or internet plans or insurance companies, or by refinancing a car loan, he said. At the very least, people who tend to spend more than they budget for should add 20% to their normal grocery and utility budgets, as these two costs are highly variable.

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-Venessa Wong

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February 19, 2026 15:59 ET (20:59 GMT)

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