Month End & Month Beginning

Because it is the end of the month, I wanted to talk a bit about closing out the current month and starting the new month. Since I use YNAB as my spending plan software, I am going to give instructions using that program, but you can take these principles for any program.

Closing Out the Month

Tip: Always keep your receipts until the end of the month in case there is a discrepancy between the bank and your recorded spending. Once you have closed out the month and all is reconciled, you can shred or throw the receipts away.

  1. Finish entering all spending and income into the application so you are up to date.
  2. Reconcile your account with your bank statement or online. You can read how to do that here.

    If the amounts don’t reconcile, you will need to figure out what happened. That is one reason I keep my receipts. Sometimes, I enter the amount wrong in YNAB and by digging out the receipt, I will see that.

  3. Once you have reconciled, your accrued amounts will be accurate and you are ready to discard your receipts (as long as they are all accounted for) and begin the new month. If there are any expenses that have not yet shown up in your bank, please keep the corresponding receipts until they do. I keep a box on my desk where I throw all my receipts for the month. When I have completely reconciled, I discard my receipts in an inexpensive shredder that works great!
  4. Next, if you are using YNAB, go to your “Budget.” (Sorry, but that is their terminology!) You want to check to be sure that you have accounted for all your income properly and that you aren’t over in any categories.

    (Click on the image to enlarge it)

    Note that on the left is October, the month we are closing, and on the right is November.

    First, look at October to be sure Available to Budget is 0.

    Next, look at November near the top, where it says Overspent in October. If that is anything but 0, you will need to scroll down through October to see if there are any balances in the red. If so, you will have to fix this by moving money into the category.

    I strongly suggest that the way to do this is by talking it over with your sponsor before making any change. Mistakes happen and if you are over in a category, your sponsor will help you figure out a category from which to take the money to cover it. This is part of the humility we exhibit in program, acknowledging that we are no longer alone and in charge of our money. Plus, you may not make the best decision on your own about which category you should take that money from.

    Remember, this disease is cunning, baffling, and powerful. Debting is spending money we don’t have. Going over in a category reflects such an issue. So you may need to have a PRG to add more funds to that category or you may need to be willing to spend less. Sometimes, it is just an honest mistake, for instance, if we thought there was enough but had forgotten to enter an expense before looking at the category.

Beginning the New Month

If you have fixed income (e.g., regular paycheck, social security), you will ensure that the current month has all the planned spending amounts as usual. If you have sporadic income, you can figure out the average over the past year and use that. See my posts on creating your spending plan for more help.

If you are using YNAB, there is an easy way to populate the next month with all the planned spending from the previous month.

Tip: Once you get a basic spending plan, you can populate a number of months. If you have just started using YNAB, I strongly suggest this. I have found that by the time the month is over, I have often had to move money around and it is not really the accurate basic spending plan anymore.

For instance, this month, I needed more in grocery, so had to (with the help of my sponsor) take money from another category to cover it. If I copy over the amounts, they will not reflect the actual amount I plan for groceries. But since you can easily change any planned amounts in a category, it doesn’t matter if you do it one month at a time or not.

Here is how to get your next month started in YNAB:

  1. Click the lightening bolt in the next month, in this case, November.
  2. Generally, you want to make sure the new month is all 0 in the “Budgeted” fields. In this case, it is now October 31, so we are talking about November as the new month.
    • If you are sure all amounts are 0 or you have changed the value in one or more categories and don’t want them to be overwritten – Select Budget Values Used Last Month.


    • If you aren’t sure whether all the amounts are 0 and you want to be sure they are:
    1. Select Zero All Budgeted Amounts for This Month after clicking the lightning bolt.
    2. Click the lightning bolt again.
    3. Select Budget Values Used Last Month.
  3. You can do the same thing for December, etc.
  4. Save your YNAB file.

You are now ready to move into the next month!

I’m a bit concerned that these instructions may seem overwhelming. But if you just read one instruction at a time, I am hoping it will be as simple as it actually is. Please email me if you need more clarification at arecoveringlife at gmail dot com (I had to write this out to hopefully keep bots from sending me spam).

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