Rotating Categories is a method used in budgeting to allocate funds for different expenses. It involves dividing your monthly income into various categories, such as housing, food, transportation, entertainment and savings, among others. However, instead of allocating the same amount each month towards these categories, you adjust the allocation based on which category is currently in need or has been overspent.
For example, if one month your transportation costs were high due to a road trip, then next month you would allocate more funds towards that category. On the other hand, if you didn't spend much on entertainment this month because you stayed home and watched movies, then you could reduce the allocation for that category in the upcoming budget period.
The idea behind rotating categories is to ensure that each expense gets its fair share of funds while also allowing for flexibility based on changing needs or circumstances. This method can help prevent overspending in certain areas and promote better financial management overall.