Starting in the Middle of the Month
Starting a budget in the middle of the month might feel overwhelming because it doesn’t feel like the right time to start. It’s not the first of the month and you’ve already paid some expenses. Fun Fact: Out of 365 days in a year, only 12 of them would be that “perfect” day—and you need a budget for every one of those not-so-perfect days, too!
When is the best time to start? Today! Better yet— right now! Now is always the best time to start your budgeting journey. As the famous Chinese proverb states: "The journey of a thousand miles begins with a single step." And rest assured—YNAB is designed to set you up for success no matter when you start!
What Should You Do First?
Now that you're on board with starting your budget, follow these steps:
- Customize your Categories and Set Targets: We've provided a template, but your budget should represent your priorities; make your budget your own! Setting targets helps you prioritize and make a plan for your money.
- Add your Accounts: Each Account has its own account register, where you'll add transactions.
- Schedule Transactions: Scheduled transactions help you prepare for upcoming expenses.
- Assign your Money: Give your existing dollars jobs by assigning money to your categories. If you've added a savings account, be sure to set that money aside in a savings category, so you don't assign it to expenses. Ask yourself, "What does this money need to do for me before I get paid again?", and stop when Ready to Assign reaches $0. When you get paid again, pick up right where you left off and continue funding your categories.
I've Already Paid that Bill, Why Am I Being Asked to Assign More?
When you set a target in a category, you’ll see a yellow underfunded alert until you’ve met the target amount by adding funds to that category. You'll only need to budget for expenses that haven’t yet been paid. In your first month of budgeting, you may set a target for an expense you’ve already paid. Weekly targets will not prompt you to fund prior weeks, but other targets (such as monthly targets) will still prompt you to assign the full amount of the target for this month unless you tell YNAB you don't need the target to be met in this month.
If you're starting your new budget after paying that expense, this can be confusing or even frustrating.
There are two ways to handle this situation:
- Ignore the yellow on that category. I know, it feels wrong to ignore it, but remember, red means stop, yellow means "proceed with caution". You can begin assigning money for those targets when the month rolls over.
- Instead of setting the target this month, set up your target amount in the next month by advancing to next month's budget and editing the target there, since you don’t need to assign money towards that expense this month. This will tell that target to begin in the new month and it will be absent in your current month.