How to Start a New Month in YNAB
A Step-by-Step Breakdown
One day—probably more than one day—but less than 32 days after you’ve been using You Need a Budget (okay, definitely less, definitely), you’re going to start a new month in YNAB and the old month is going to roll over. And, with the new month, new YNABers across the land watch the budget screen in YNAB zooming forward into the now. It’s an exhilarating feeling, really. There’s so much possibility.
But 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. You will:
- Record your income (if you received any).
- Give those dollars a job.
- Spend. (Don’t forget to check your category balances, first, of course!)
Watch how the Budget Nerds handle their monthly rollover in the video below:
These actions are based purely on how much money 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:
When February 1st, rolls around, it’ll change to a new month (without you needing to do a thing):
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. Rejoice!
You’ll Deal With Overspending
If you overspent in a category 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 “Ready to Assign” in the new month. After all, those dollars are truly gone from the budget.
If you overspent on a credit card, last month’s category balance will display in orange, and the amount that you overspent will be added to your 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. Make sure your Credit Card Payment category matches what you owe on the card and you’re good to go! If you’re working on paying off credit card debt, they may not match for a while but you’ll get there!
You Might Have Leftovers
If you didn’t spend all of the money that you assigned last month, lucky you. Those remaining positive category balances will still be sitting there, just where you left them. So, if you had $50 left over in your Grocery category last month, you should see $50 as Available in this month’s category. Also, congratulations, because not spending your whole grocery budget is a feat.
If your category balance is orange, it means that your category has a funding target. 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 target for this month.
Assigned Amounts Disappear
With the new month, all of your assigned amounts will be empty. In other words, it’s time to give your dollars jobs, 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 “Ready to Assign,” stop!
- If you have spending and savings targets set for your categories, you can use Auto-Assign on mobile or the “Underfunded” option within Auto-Assign on the web app to fund your targets in order of priority.
- Use the “Assigned Last Month” option in Auto-Assign to fill in this month’s budget with the same amounts that you assigned 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 Assigned” or “Average Spent” in Auto-Assign. 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.
Clean Everything Up With Reconciliation
We recommend reconciling your accounts daily if you’re new, and weekly or monthly if you’re a veteran budgeter. This step ensures your budget and your bank account balances match.
You can reconcile on mobile or web by tapping the “Reconcile” button in the top right of your account register. For an in-depth guide to reconciliation if this is your first time, check out this reconciliation help doc.
With the completion of this step, you know your budget is clean, fresh, and ready for the next 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 the 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, we’ve got plenty of options:
- Take a class. Our teachers show you how to break the paycheck to paycheck cycle!
- Watch a video course. These short clips cover the ins-and-outs of using the software.
- Jump into a fan-led Facebook group. Ask any question that’s tripping you up.
- Drop into the subreddit. There’s a little bit of everything for your scrolling pleasure.
- Browse #YNABCommunity on Instagram. Success stories abound, be inspired.
Make a few friends, see how they budget, and keep yourself in the game by sharing your wins.