How to Close Out Your Monthly Budget

You made a budget, tracked your spending, and (hopefully) stuck to the plan. But before you call it a month and move on, there’s one more thing to do: Close out your budget. Don’t worry. It’s easier than it sounds!

Think of it as one last check-in with your money before the calendar flips. And the more consistently you track your spending throughout the month, the faster the process will be.

Before we dig in, here’s a quick look at what goes into closing out your monthly budget.

When Should I Start Next Month’s Budget?

It's a good idea to start next month's budget before the current month ends. You don’t need to make it perfect yet. Just copy over your current month’s budget so you have a starting point.

Why so early?

Your budget probably hasn't gone too crazy with adjustments yet, so copying it now can save you some time later. Just be sure to review next month's planned amounts before the new month begins, especially if you've made changes to your current budget since copying it.

Copying your budget in EveryDollar is super easy. Here’s how:

1. Open the app.
2. Tap on the current month at the top of the screen.
3. Select the next month.
4. Create that month’s budget. Boom. It’ll automatically copy over the current month’s budget for you.

How Do I Track My Spending and Keep My Budget at Zero?

Track your spending throughout the month and adjust your planned amounts as needed to keep your budget balanced. Remember, with a zero-based budget, your income minus your expenses should equal zero.

Start by recording your transactions in EveryDollar and making sure they’re in the right budget categories. Then compare what you actually spent to what you planned.

Did the electric bill end up being less than you budgeted for? First, yay! Second, change your planned amount to what you actually spent. You can put that extra money toward your current Baby Step. But if it’s higher, you’ll have to take that money from another budget line. (Less restaurant spending this month?)

Now, some of you are probably gasping right now at the thought of changing your planned amounts. But just like life, the phases of the moon, and the fame of child actors, budgets change.

Try to get your planned amounts as close as you can by looking at past expenses and bills. Unless it’s a stable bill like rent, you’ll probably be a little off on a few budget lines. That’s okay! Just make sure you aren’t overspending on your budget as a whole or putting extras ahead of necessities.

How Do I Handle Late Transactions?

If you have transactions that haven’t shown up in EveryDollar yet, enter them manually before closing out the month. That way, your spending totals reflect what you actually spent—even if your bank is taking its sweet time processing everything.

Here’s the deal: That grocery run on October 30 might not show up in your bank account until November 2. If you wait for it to land, it could end up in next month’s budget, making it look like you had money left over when you didn’t.

Enter the transaction yourself and date it with the day you actually spent the money so it counts toward the right month. Then check your Remaining amount to make sure your budget reflects what you’ve spent. And when that same transaction shows up from your bank later, delete it to make sure you’re not counting it twice.

How Do I Handle Leftover Money When I Close Out My Budget?

If you have money left over at the end of the month, put it toward your current Baby Step. That extra money is called margin, and it’s a chance to make even more progress on your money goals.

To see how much margin you have, check what’s left in your budget’s Remaining amounts after all your transactions are accounted for.

Is there extra cash? Bravo! Have a quick dance party in your kitchen and high-five the nearest person. Then send that money on its way to a money goal. Put it toward your $1,000 starter emergency fund if you’re in in Baby Step 1, your debt snowball if you’re in in Baby Step 2, or your fully funded emergency fund if you’re in in Baby Step 3. Whatever Baby Step you’re on, you’re hitting it harder this month. We’re so proud! You should be too!

How Do I Do a Budget Reality Check?

Compare what you planned to spend with what you actually spent. Then figure out whether you just had an unusual month or if there’s a spending habit you need to change. You can also use EveryDollar’s budget reports to get a closer look at your spending over time.

As you close out your budgets over the months, you’ll start to notice a few spending trends on your part. But there’s a difference between “The kids had sports practice every night for two weeks, so we ate out too much,” and “Wow, we’ve been living that restaurant lifestyle for a while now.” One is a sign of an off month. The other is a sign of an off priority. That might be your cue to spend a little more time meal planning and a little less time ordering takeout.

Did you have any unreasonable or unrealistic budget lines? Change those next month. Or did you blow a few budget lines because of poor planning? Change those habits next month too.

What Should I Do if My Budget Won’t Balance at the Month’s End?

If your budget won’t balance to zero, compare your planned amounts with what you actually spent to find the difference. Then move money between budget lines as needed until your income minus your expenses equals zero.

Depending on what’s throwing your budget off, here’s how to get things back on track:

• You keep overspending in the same category. If you’re going over budget every month, it’s time to make a change. Adjust unrealistic planned amounts or cut back on extras. Just make sure you’ve budgeted for giving and saving, followed by your Four Walls (food, utilities, shelter and transportation).
• Your income changes from month to month. If you have an irregular income, budget based on your lowest expected monthly income. When extra income comes in, use it to cover other expenses or make more progress on your current Baby Step.
• An irregular expense sneaks up on you. Cover the expense by moving money from another budget line. Then start a sinking fund so you’re ready next time. Divide the amount you’ll need by the number of months until it’s due and save that much each month.

How Do I Prepare Next Month’s Budget?

Before the new month begins, look over the budget you already copied and adjust your planned amounts for what’s coming. Use what you learned from this month’s spending to make next month’s plan even better.

Think about month-specific expenses you need to make room for: heart-shaped candies in February, fireworks in July, or cans of cranberry sauce in November. Don’t let what’s coming surprise you or your bank account. Plan and budget ahead.

And if you’re married, close out your budget together. Hold a Budget Committee Meeting before the new month starts. Look at how last month went, then decide together where your money will go next month. You’ll be on the same page and a lot less likely to hear “Wait, what’s this charge?” halfway through the month.

Once you’ve agreed on the plan, put it into action with EveryDollar. EveryDollar makes it easy to review your spending and make those final adjustments before closing out the month. Plus, you can copy your budget into the next month so you’re not starting from scratch.

It may take about three months to get a hang of budgeting, but stick with it. Before you know it, you’ll be moving from one month’s budget to the next like a pro.