Most of my PPC clients have a set monthly advertising budget which does not vary from month-to-month (but may increase over time if results are good). There are good reasons for this setup: there is consistency for the client which they can plan for, and their expectations for me are clear and don't need much additional coordination. However this may keep some advertisers from getting the most sales possible.
Consider this situation: you sell a popular toy. You spend $1,000/month from January through October and are profitable. But for the Christmas season you expect the number of searches for your product to double. If you keep the $1,000/month budget, your will only be able to show half of the time before your budget is depleted, and you will lose out on half of your possible sales and profit. If you have a more flexible budget, you could capture those extra sales and have yourself a very happy holiday season.
Adding flexibility to your budget will require more work (more frequent checks if you're managing it yourself, more discussion with your PPC agency if you outsource your advertising), but you will be rewarded with more sales and profit.