Overspent Categories Going Into New Month
I just checked YNAB this morning and got a direct deposit from work. Since the month ends tomorrow and I have a couple slightly overspent categories, should I use my paycheck to fix the overspending or just starting budgeting my next month and let the automatic correction to To Be Budgeted occur? Does it even matter which I choose?
I think both would work. I myself usually prefer fixing the overspending by hand in the same month, as the choice where to take the money from feels more like a concious choice. Some overspend categories het covered by a different categorie that otherwise would have build up money. Others I would use that money that just came in for.
I'll echo this and say that I typically cover all my overspending from the current month in the current month. Like Grogu mentioned, this is especially important for credit overspending! If you don't cover credit overspending in the current month, it won't be automatically covered by your To be Budgeted amount when you roll over.
Instead, it will be represented by an increased deficit between your credit card's balance and the amount available in your Credit Card Payment category. To cover past credit overspending in a new month, you'll budget directly to your Credit Card Payment category 👍🏻
So a thinking point would be this. If the check you are getting today would normally be a January check and you are not a month ahead, I would cover that overspending not with this check, but with anything else in the budget, and only after I had exhausted all other money in the budget would I use money from this new check. Why? Because getting into the habit of relying on income to cover overspending gets you out of the habit of looking for categories to cut before you overspend, which keeps you in the habit of overspending instead of confronting your bigger priorities.
The only asterisk here is that a lot of “today” checks are really 3 paycheck January checks. So technically they are extra money. And dealing with old mistakes is a great thing to do with extra money. Nevertheless, my preference would be for covering the overspending before budgeting this new money, even if you ultimately decide to use some of the new money to refill the categories you pulled from to cover the overspending. Principles over process here.