Savings Budget EOM Thought Process

The month has ended and I am trying to determine how to balance my budget to my actuals. It seems we overspent this month than what we budgeted (higher total actuals than total budget). What should my thought process be in balancing the budget each month?
Should I make all “available” funds for each account zero if I plan not to carry it over to the next month? Should I be matching total Actual to total Budget?

I guess the general question is how to actually navigate each month depending on if I overspent or underspent. Is there a step-by-step or can it vary too much?

Appreciate any insight on this!

What our family does is sit down on the last day of the month, and we do 4 things:

  1. We go over what we want to buy in the next month.
  2. We go over what we went over budget and under budget this month.
  3. Determine if the items in #2 will be the new norm.
  4. We then adjust our budget for the next month using the Savings Budget solution.
    4a. If we spent more than we were planning on spending, and it wasn’t a “new normal”, we subtract that from the next month’s categories.
    4b. If we spent more or less than we were planning on spending, and it is going to be a “new normal”, we take note of that and adjust the next month’s budget appropriately.

This ensures that our budget for the next month is as accurate as we can possibly plan and it gives us something to be held accountable for.

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That is very helpful. Thank you for sharing!

Do you balance anything between Budget vs Actuals from a total number standpoint? i.e. balancing your budget income to your budget expense?

Yeah, I suppose we do 5 things haha. If any of the overspending is not going to be a “new normal”, and we have unspent money elsewhere, we go in and do our best to zero things out. That being said, because we do this on the last day of the month, it’s more of a doing it do to it. It would be different if we did it a few times a month.

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Thank you so much for sharing. It really helps to have an example of the utilization of the resources. If you have any other useful tips and tricks your family uses to better use the budget document, it is totally welcomed. Thanks again.

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I think of a budget as a plan, not a report of what has happened. If I plan to spend x and end up spending y, I analyze the spending. Say I’m a Wednesday grocery shopper, then 4 months a year I go shopping 5 weeks a month instead of 4. As long it averages out over time, no need to adjust. However, if it is inflation that causes the over spending, you might need to adjust.