EveryDollar icon for copying a budget

How to Close Out Your Monthly Budget

When you were young, you probably believed in the tooth fairy: a spritely creature with an affinity for enamel who fluttered in and traded quarters for dislodged teeth.

You’re all grown up now and put those flights of fancy behind you—yet maybe you still hope for a budget fairy to track your expenses, update your spending totals, and set up next month’s budget categories.

Nope. This is the real world, with adult teeth and adult financial responsibilities. One of those responsibilities is closing out your monthly budget. Even though that sounds overwhelming or like one more task to clutter your to-do list, it isn’t that bad. We promise.

If you want to know how to close out your monthly budget, you don’t need magic. You just need to follow these six, simple steps. 

Mid-Month Actions

Animation of copying your budget to the next month

Step One: Go ahead and create next month’s budget. You’re not going to fine-tune it yet; you’re just copying it over. 

Why now? 

At this point, your budget hasn’t gone too crazy with all the adjustments you need to make throughout the month. So just copy over your current budget. Later, you’ll refine it for the upcoming month’s specific needs. 

Animation of how much money you have remaining in your budget

Step Two: As you’re tracking your expenses, now’s the time to see if any totals need to be tweaked. Did you pay the electric bill, but all your energy-conservation speeches to the household created a lower payment than you budgeted for? Change your planned amount to what was actually spent!

Why?

Because life has a way of balancing out. And just as sure as the electric bill goes down, the water bill goes up. Blame the stressful week that meant the need for three detoxing bubble baths. Or stop blaming anything and just keep on budgeting. So, you have to change the water bill’s planned amount—it’s okay! 

We know some of you are gasping in utter indignation right now and thinking: Change the planned amount? But it was the plan. And plans don’t change. 

Just like life, the phases of the moon, and the cuteness of child actors—budgets change. If you’re able to properly estimate every single budget line amount in your entire budget, you might want to try out for America’s Got Talent because you have an act ready for Vegas. 

If you’re like the rest of us, you try to get really, really close—based on the last couple months of expenses and what you know might change in the upcoming month. But you’re rarely spot on, unless it’s a stable bill like your streaming services or your ribbon-dancing class tuition. 

You want to keep a zero-based budget, so you’re going to alter the planned amounts when they don’t align with the actual amounts. Keep doing this until you get back to zero. Then you’ll be able to see where the spending needs to slow down to make up for anything that was more than you’d bargained for.

End-of-Month Actions

Adjusting your budget
Step Three: It’s time to tweak those totals again! We know some EveryDollar users prefer to tweak throughout the month. Our recommendation is to adjust as needed at least twice a month, but the more the merrier! 

Step Four: Is there extra cash? Bravo! Do the running man in your kitchen and high-five the nearest person or pet. Then send that money on its way to make a money goal happen. Pay extra on debt. Build up that emergency fund. Whatever Baby Step you’re on, you’re hitting it harder this month. We’re so proud!

Step Five: It’s time for a reality check. 

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 some sport or musical practice every night for two weeks, so we ate out too much this month,” and “Wow, we’ve been living that restaurant lifestyle pretty hard for a while now.” One indicates an off month. The other indicates an off priority. You’ll probably need to spend more time on your meal planning and less time in the drive-thru.

What budget lines were set on unreasonable or unrealistic plans? They need to be changed next month. What budget lines were blown because of poor planning? Those habits need to be changed next month as well. 

Step Six: Armed with all that learning—and the commonly missed budget items we email you each month—you’re ready to review, revise and revamp the next month’s budget.

That’s it. Follow those six steps, and you’re ready to move from one month to the next.

And come to think of it, EveryDollar Plus is awfully close to a budgeting fairy. (Yeah, we’re bringing this full circle.) It links with your bank accounts and streams your expenses. We know this upgrade isn’t magic—it’s a bunch of hard work by developers on the EveryDollar team—but it is magical. You should give it a try, especially since you can try it for free.

That’s right—start your free trial of EveryDollar Plus today and regain a bit of your childlike wonder. *

*Return of childlike wonder not guaranteed.