Letting funds roll over vs. budgeting into next month

If I have $20 left over in my Dining Out category at the end of the month, should it be moved into the next month or left where it is to rollover? Assuming the funds aren't needed to cover any overspending in other categories, is one tactic better than the other?

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  • If you are planning to keep it in the category, then let it roll over.

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  • Hello, kristin !

    For a discretionary category like Dining Out, either way is totally fine. You have several options, all good:

    1. Leave the money there to roll over, budget your usual amount to Dining Out next month, and enjoy an extra trip through the drive-through (or whatever your guilty pleasure) next month.
    2. Leave the money there to roll over, and budget $20 less than usual to Dining Out next month. You'll have your usual amount to spent on Dining Out, plus $20 to budget elsewhere.
    3. Move the money out of Dining Out and into another category at the end of the month. This is a fun way to, say, contribute to funding a vacation, by dining out a little less and knowing that every time you do, you're leaving more money for your Vacation category.

    Of course, 2 and 3 are totally equivalent, but some people prefer one approach over the other.

    Some categories should definitely be left to roll over, however. They are:

    1. Categories where you're accumulating money over time for an annual fee, large purchase, or unexpected expense. (Vacation is a perfect example.)
    2. Categories associated with a variable bill, like electric or water, where you're budgeting the average each month and accumulating money during lower-bill months to cover higher-bill months.
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      • kristin
      • Kristin
      • 3 wk ago
      • Reported - view

      Thanks Matthew!

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  • I prefer to sweep the leftover into some high-priority category in the current month's area.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • Reported - view

      dakinemaui That depends on whether you want the category to grow or not using the leftovers. I don't sweep out of Dining Out on the rare occasion we have much of anything left.

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    • nolesrule I was hoping it would be obvious to leave money in the category if growth was desired. If it wasn't, I figured your earlier response would get that point across. 😉

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