End of month. Where to put leftover $. Next month vs a misc fund?

We're heading into the end of our first month of YNAB.  We have funds left over in several accounts.  How do I handle this; move funds into next month, or transfer money into a budget category labeled miscellaneous or extra, or things I forgot to budget for?

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  • You don't have to put it anywhere. It will roll over into next month. That's how you follow Rule 2, Embrace Your True Expenses. For example, if you want $1200 for the holidays, starting in January you'd put $100 per month in your Holidays category so you'd have $1200 to spend in December.

    If you budget $500 per month for groceries and you spend $450 this month, you have many choices. Let the remaining $50 roll into next month and then only budget an additional $450. Let it roll over and still budget $500, now you have $550 to spend this month. Transfer the $50 to another higher priority category and then budget your $500 next month. It's whatever your priorities are.

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  • Well done. And take a breath - the end of the first month will show you that YNAB is not the same as other budgeting systems but you’ll get there. And the fact that you’re asking the question shows you’re beginning to understand.  Take some time to observe your budget and what happens when the month changes.

    The previous commenter is correct - maybe you shouldn’t move it.  However the other option is to move some of the extra funds to true expenses you didn’t fund. For example, 1/6th of the insurance bill which is due in 6 months or an allowance for car repairs, which could happen whenever. 

    You might also want to consider why you have funds left over in the specific categories   Was your estimate of how  much you’d need for the month in this category too high or is it a timing issue eg  you didn’t spend in last two weeks but might spend next week?  

    It’s tempting to get excited and throw extra into debt.  However hold on for a month or two and get used to your new budget and the excellent features of the YNAB method  and the software  

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  • Anytime you realize funds could be moved to a higher priority category, then you should do that. Sometimes you want funds to stay in the same category (e.g., Christmas, non-monthly bills, etc). Things like Groceries you may wish to sweep the leftovers into some high-priority goal (e.g., debt reduction).

    Others will leave the money in Groceries, but budget less next to Groceries month (because of the carryover), which leaves comparatively more in next month's TBB which can go to the high-priority goal (in next month's area). This seems a bit round-about to my thinking, but lots of people do it.

    As a heads up, one very useful high-priority goal is to get enough ahead that the current month is covered without using any money received this month. If you have multiple income events per month, I highly recommend it, as it can transform your budgeting process to a single, month-sized, effective paycheck.

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  • Thank you everyone.  What a great group of helpful people!  Making this fun!

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