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 Goals: We've provided a template, but your budget should represent your priorities; make your budget your own! Setting goals 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.
- Budget your Money: Give your existing dollars jobs by budgeting money to your categories. Ask yourself, "What does this money need to do for me before I get paid again?", and stop when To be Budgeted reaches $0. When you get paid again, pick up budgeting right where you left off and continue funding your categories.
I've Already Paid that Bill, Why Am I Being Asked to Budget More?
When you set a goal in a category, you’ll see a yellow underfunded alert until you’ve met the goal 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 goal for an expense you’ve already paid.
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 budgeting for those goals when the month rolls over.
- Instead of setting the goal this month, set up your goal in the next month by advancing to next month's budget and editing the goal there. This will tell that goal to begin in the new month and the goal will be absent in your current month.