Master Your Monthly Rollovers

You’re buzzing along, getting the hang of YNAB, and then the calendar flips to a new month. You open YNAB and—oh man!—things look different. Some of the numbers have changed, but not all of them. Everything is fresh, but also still familiar. You’re asking, “Am I supposed to do anything special? What happens now?” 

Don’t worry, it’s actually really simple. Let’s demystify the monthly rollover. We’ll go over what stays the same when a new month starts, what changes, and what you need to do to embrace this new phase of your financial journey with confidence.

What stays the same?

Categories, targets, and accounts remain.

When you first started YNAB, we walked you through an onboarding process to get your categories just right. You also may have set up targets on most or all of your categories so you know how much you need in a typical month. You also set up your accounts in YNAB to reflect your banking life in the real world. Basically, your spending plan is a work of art. Chef's kiss.

All of that will stay the same every month. Your target amount for a category might stay the same depending on how much you’ve set aside for a savings goal, but the target itself will keep on humming along in the new month. Your accounts and categories will stay the same too. 

Positive available amounts roll over into the new month.

Any positive available amount from the previous month rolls over into the new month. Here’s why: Imagine you’re using a cash envelope system to manage your money. (Did you know that’s what YNAB is based on?) Each month, you put a little cash in various envelopes: groceries, electric bill, fun money, etc. You only spend from the appropriate envelope.

Let’s say you put $500 in the groceries envelope but spent only $480. That crisp, left-over $20 bill stays in the envelope. When the new month starts, what happens to that $20 bill? It’s still there! That’s why positive available amounts roll over into the new month in YNAB.

And here’s where YNAB gets really awesome. Each category is like a cash envelope—and also a mini savings account. For groceries, you might move the extra $20 to another category (or treat yourself to some fancy cheese!). For other categories, let it ride to save for a specific purpose.

For example, you added $100 to your Car Repairs category but didn’t spend it last month. Let it roll over. Add another $100, and you’ll have $200 available! You’re getting ready for that $500 repair you don’t even know about yet (but you know it’s coming sometime!). Or maybe you’re saving for a beach vacation next summer. No need for a separate savings account because you’ve got a mini savings account right there in YNAB.

Positive available amounts roll over to help you spend and save exactly how you want!

What changes?

Negative available amounts go back to zero.

While positive available amounts roll over to the new month, any negative available amounts (aka overspending) do not. YNAB accounts for overspending in previous months in one of two ways depending on whether you overspent with cash or credit. So here’s what that means in detail:

‍Cash (red) overspending in a category will reduce the amount available in Ready to Assign (the big number at the top) in the current month. If you overspend by $50 on groceries, that amount will be deducted from your Ready to Assign balance in the new month. 

Remember, a core part of the YNAB Method is Give Every Dollar a Job! That means if you have any red overspending in your categories, that money is coming from somewhere else, so you can’t really trust your plan if you don’t handle that overspending. 

Ideally, you’ll cover red overspending from another category as soon as possible. But if you let it sit until the end of the month, YNAB will take it out of Ready to Assign in the next month so you can rest assured your plan is accurate once the new month starts. 

‍Yellow (credit) overspending in a category will result in new debt on the card. YNAB alerts you to the new debt by showing an Underfunded alert in your Credit Card Payment category. That alert will prompt you to make a plan to pay off the new debt. This keeps your credit spending in check and helps you avoid falling into deeper debt. 

Assigned amounts go back to zero.

When you assign money to a category, you’re assigning it for the current month specifically. Going back to our envelope analogy, the assigned amount represents how much money you’ve put in that category (envelope) in the particular month you’re viewing. Therefore, all of your assigned amounts in the new month will reset to zero unless you’ve assigned money in the new month. (Look at you, getting ahead already!) 

For instance, if you assigned $200 to dining out in June, that category will reset and you’ll need to assign new funds for July. 

Ready to Assign will change (maybe).

If you have any cash (red) overspending last month that you haven’t covered, your Ready to Assign number will be less than it was in the previous month. Remember, any cash overspending from last month is covered with money from Ready to Assign. 

In other words, once Ready to Assign is at zero in the current month, you don’t have to worry about going back to deal with overspending in previous months. This ensures a fresh start every month, letting you focus on the future without the baggage of past mistakes.

What should I do on the 1st of a new month?

Strictly speaking, you don’t have to do anything! YNAB will do all the fancy calculations you need to start a new month with your money plan. But over the years, we’ve developed some best practices to work into your YNAB routine at the beginning of a new month.

Reconcile your accounts.

The new month is a good time to make sure all your account balances are correct in YNAB. Cross-check your accounts with your bank statements to ensure everything is accurate. This step is crucial for maintaining the integrity of your plan. If you need help learning to reconcile, you know we’ve got you!

Check ready to assign at the top of your budget.

If the big number at the top of your Budget screen is red and negative in the new month, remove money from your categories until it’s a happy zero. If it’s positive, assign that money to categories! This helps you start the month with a clean slate and ensures that every dollar has a job.

Check over your available amounts in all your categories.

Do they align with your priorities? Make any changes you see fit! Maybe you need to adjust your grocery budget or allocate more funds towards an upcoming event. This is your chance to realign your spending with your goals.

And that’s it! You’re ready to start your new month with YNAB! Embrace this opportunity to refine your financial habits and make each month better than the last. 

Now that you've mastered your monthly rollovers, it's time to go deeper in your relationship with money! Sign up to get your free Change Your Money Mindset workbook and email series.