22.11.2019

How to Start a New Month, in YNAB

One day—probably more than one day—but less than 32 days after you start (okay, definitely less, definitely), the month is going to roll over. And, with the new month, new YNABers across the land are faced with the exhilarating feeling of the budget screen in YNAB zooming forward into the now.

The thing is, as exciting as a fresh month may be, it doesn’t actually change your marching orders. You’ll simply continue YNABing, just like you have, so far. Namely, you’ll …

  1. Record your income.
  2. Give those dollars a job.
  3. Spend. (Don’t forget to check your category balances, first, of course!)

These actions are based purely on how much income you’ve got, not the calendar month. Remember, you’re not forecasting the entire month (a common misunderstanding for new YNABers). You’re simply making a plan for the money that you have in your bank account, right now.

If you’ve got those three steps nailed down, tight, you’re already doing great. Now, let’s take a look at a few things to expect in your budget:

Same Budget, New Month

Your YNAB budget displays the current month at the top of the screen. It looks like this:

How to Start a New Month, in YNAB

When Friday, February 1st, rolls around, it’ll change to this (without you needing to do a thing):

How to Start a New Month, in YNAB

You can look at January’s budget by clicking the left arrow, or peek at March by clicking the right arrow. The important thing to note is that you don’t have to create a new budget. Everything is still there.

Your Overspending Disappears

If you overspent in cash, last month’s category balance will display in red, but the current month will show a balance of zero. So, what happened? YNAB automatically deducts the amount that you overspent from “To Be Budgeted” in the new month.

If you overspent in credit, last month’s category balance will display in orange, and the amount that you overspent will be added to your credit card balance. If you can’t cover the overspending in the same month that it occurs, you’ll need to budget directly to the “Credit Card Payments” category to pay back the debt.

Budgeted Amounts Disappear

WIth the new month, all of your budgeted amounts will be empty. In other words, it’s time to budget, and there are a few ways that you can tackle it:

  • Go category by category, working down your priority list and using the Inspector as your Guide. When you get to $0.00 “To be Budgeted,” stop!
  • Use the “Underfunded” option in Quick Budget to budget one category, or category group, at a time.
  • Use the “Budgeted Last Month” option in Quick Budget to fill in this month’s budget with the same amounts that you budgeted last month. Then adjust, as necessary, for the current month.
  • And, when you’ve got more history—at least four months or so of YNAB experience—try out “Average Budgeted” or “Average Spent” in Quick Budget. These options rely on data that ties back to your actual spending habits, so the longer you’ve been budgeting, the better the data will be.

You Might Have Leftovers

If you didn’t spend all of the money that you budgeted, last month, lucky you. Those remaining, positive category balances will still be sitting there, just where you left them.

If your category balance is orange, it means that your category has a funding goal. The number indicates how much money you’ve got left from last month, and the orange means that you need to add more dollars to meet your goal for this month.

You’re Doing Great

If you just joined YNAB (you know, a month ago), then congratulations on your first, official month as a budgeter. The first step is definitely the hardest, and things will only become easier. As more months pass by, you’ll get better at allocating your dollars and refining the categories that best serve your financial goals. Plus, it’ll become second nature. So, keep going!

And, if you need encouragement, drop into YNAB’s Facebook fans group! Make a few friends, see how they budget and keep yourself in the game by sharing your wins.

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