I think I just learned something important

Here it is, my aha , moment.

If I start budgeting in the middle of the month, but include total monthly expenses, it's a bad thing. But...in my case it looks like I'm going to have more left over at the emd of the month.

For example, if the starting balance is $10,000 (based on a bank balance of $1,000 and new income of $9,000 - real income) on April 10, and I budget $10,000 for payroll...yup, nothing left.

Instead, I really started on April 1 with $5,000, add $9,000 of income from April 1 to April 10, budget for an entire month of payroll of $10,000 and I'm left with $4,000.

Am I missing something?

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    • nolesrule
    • Been waiting 5 years for the Stealing From the Future fix...
    • nolesrule
    • 2 yrs ago
    • Reported - view

    Yes, in your first partial month you would only budget for remaining expenses in the month and ignore expenses that were incurred prior to starting. Remember , the starting balance is the sum of all previous transactions going back to the beginning of time. You do not need to budget for previous transactions (credit card spending excepted).

  • Do you still have to pay the whole 10,000 for payroll? If so, you'll really have nothing left at month's end. After all, by April 10 you had already spent 4,000 $, otherwise your starting balance would have been higher. 

    Now, if you've already paid out part of those 10,000 payroll from your 5,000 income on April 1, just budget for the rest you still have to pay and you'll have something left over at the end of the month. 

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