Suppose you sit yourself and your family down at the beginning of every year and figure out what your budget is going to be for that year. If you can, you try to put money aside in case of an emergency situation (not everybody can, of course, particularly those with lower incomes that find themselves living month to month). In other words, if you are a responsible person you try to look down the long year and make sure of what you can and can't pay based on your income projection.

Let's say in that budget you are paying for several recreational activities. You like to golf, so you have a big chunk of your income going for your weekly golf jaunts. You enjoy rodeo and always attend every local event, including a nice big steak dinner beforehand. And you also have a charity number set aside for a religious play which goes far beyond its actual worth, but it makes you feel good to give them a large donation. You also have 3 businesses that you pay into which actually not only don't make a profit but require you to put money in every year-the buildings for 2 of them require quite a bit of repair but you don't have the money at this point to get ahead and fix them.

You also cosigned on a huge loan for a business that was supposed to pay you back but defaulted, so you were having to pay for that payment. You managed to get that business off your books but now it looks like it's going to come back. That's fair because you're the one that said you were on the hook if the business failed to pay. (However, to remind, that business was supposed to start paying back the money with regular payments)

But then something unexpected happens. You have a medical emergency. You have a traffic accident that damages your automobile. You have to take over raising a relative's child. A natural disaster such as high winds or a tornado damages your home. Any number of things that immediately blow a hole in your budget. Now you not only have to reexamine your budget but repriotize how and what you will spend money on. It might also cause some of your reserve savings to be tapped.

Are you going to say "Hey, I made a budget and I have to stick by what I originally said, no matter what" or are you going to reassess it?

Maybe you will have to give up those steak dinners. Maybe for the year you are making that new car payment, you will defer your golf dates. Maybe you will decide that your properties should be sold so you quit sinking money into a money pit. (Even if you had to sell them at a lower price than what you might want under ideal circumstances, after all you are putting in a whole lot of your own money to keep the afloat, so you might cut your losses).

But it would be shortsighted and foolish for you to have an unexpected expense come in and say "I'm going to keep my budget JUST LIKE IT IS, and that new EXPENSE WILL SINK ME".