My first-day-of-the-month routine

It’s July 1 and this morning I had the pleasure of assigning money to meet all this month’s targets. Being a month ahead makes everything easier, including assigning money in YNAB.

Since I was fully funded on June 1, all money that came in to my bank account in June was assigned to my Next Month category. By the end of the month, I enough money in that category to cover all my targets for July. I feel very fortunate to be in this position. It took me a number of years using YNAB to get there.

Here’s my routine. On the last day of the month I always enter (but I don’t clear) any pending transactions and cover any overspending. Then on the first day of the month I do the following, in this order:

1. I approve and, if necessary, categorize any transactions that have come in overnight.
2. I flip back to the previous month in the budget and correct any overspending. Sometimes I have to take money from the Next Month category to do that and that’s okay.
3. I go back to the current (new) month and move all the money from the Next Month category to Ready to Assign (RTA).
4. I assign all money in RTA. My preference is to do it by category group, rather than simply clicking Underfunded and assigning money to all my targets in one click. Clicking the checkbox next to a group name and then clicking Underfunded to fund those categories’ targets, gives me more awareness and makes the enjoyment last longer. And it allows me to see if any of my targets aren’t behaving as expected.
5. I move any money left over after I’ve met all my targets for the brand-new month into this month’s Next Month category to be assigned in a month.

I prefer to have a Next Month category, rather than assigning money into future months as it comes in. The latter is perfectly fine, of course! And YNAB has made it easier. But this works well for me. And if I assigned money as it came in, I wouldn’t have a thrilling first day of the month!