A 12 month rolling average calculation is a dynamic average calculation that averages data over the previous twelve months. Note: you can have a 6 month rolling average, 8 month, whatever works best. Here is an example of a 12 month rolling average calculation: Suppose you spent $100 on entertainment for January to June 2022. Next, suppose you spent $50 on entertainment for July to September 2022. Finally, assume that you spent $200 on entertainment for October to December 2022. Your 12 month rolling average spent on entertainment for 2022 is calculated as follows:
((100+100+100+100+100+100) + (50 + 50 + 50) + (200 + 200 + 200)) / 12 = 1350 / 12 = $112.5. This can be helpful if in January you spend $150 on entertainment, you can note that it seems like your expenses for this category are increasing and you might have to adjust your budget to entertainment to account for the increase.
12 Month Rolling Average
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