End-of-the-month YNAB checklist

The end of the month is a special time in YNAB. When the calendar month rolls over, things happen. Luckily, they’re predictable, so you can prepare for them (though it took me quite a few months before I stopped being taken by surprise). Some of the things you’ll observe include:

• Any unbudgeted expenditures made from a checking account are subtracted from the next month’s Ready to Assign. (Those are the red bubbles in your budget.)
• Any unbudgeted expenditures made on a credit card are turned into debt. (Those are orange bubbles in your budget.)
• Transactions come through dated the past month that can create overspending in the previous month.

When I overspend in a category, I always move money from a different category to cover it. (Rule Three!) I typically do it at the time the overspending occurs because I hate those red and orange bubbles. But the rollover to a new month can be tricky and require a little extra effort.

These are the best practices I’ve devised for myself for the last day of the month and the first few days of a new month to stay out of trouble. Perhaps they’ll help you.

Last day of the month

• Make sure all transactions (including pending transactions) are categorized.
• Correct any overspending.
• Reconcile all accounts.
• Look at targets to see if any need revising.
• Make sure the amount in the payment column for each credit card matches the account balance (unless you’re carrying a balance).

First few days of the month

• Budget! My personal preference is to put any funds for future months in a “Future Months” category, rather than by moving ahead to a future month in the budget and assigning them to a category. On the first day of the month, I move the money in the Future Months category to Ready to Assign and assign every penny of it. It’s my favorite day of the month!
• Pay close attention to the dates of incoming transactions. If they’re from the prior month, be sure to check that month in the budget to make sure they don’t result in overspending. (Alternatively, you can change the date of the transaction to the new month, though then YNAB doesn’t reflect reality.)
• Go back a month and look at the budget to make sure no overspending resulted from end-of-the-month transactions.
• Look at Average Assigned and Average Spent for each category (you’ll find it in the right sidebar in your budget under Auto Assign) and do a reality check on your targets. You can use those averages to assign money, if you’d like, rather than assigning the targeted amount.

The turn of the month is a big day in YNAB. I think it’s worthwhile to pay attention in the waning days of a month and the first days of a new month so that you don’t end up with unnoticed problems in the previous month’s budget.