Monthly Budget Reset
Every month, your budget resets. Understanding what resets and what carries over is crucial for successful long-term budgeting. This guide explains how the monthly cycle works in Balance.
How Monthly Budgets Work
Balance budgets operate on a monthly cycle:
- Each month starts fresh
- Your budget amounts reset to what you’ve set
- Spending starts at $0
- Progress bars reset to empty
Think of it like a new blank page each month.
What Resets Every Month
Budget Amounts
Your category budget amounts stay the same month-to-month (until you change them):
January:
- Groceries: $600
- Spent: $575
February:
- Groceries: $600 (resets to budgeted amount)
- Spent: $0 (starts over)
Spending Totals
All spending totals start over at $0:
January 31:
- Entertainment: $250 spent
February 1:
- Entertainment: $0 spent (reset!)
Progress Bars
Progress indicators reset to 0%:
January 31:
- Groceries: 95% used ($575/$600)
February 1:
- Groceries: 0% used ($0/$600)
Allocation Status
Your overall budget allocation recalculates:
January:
- Total Income: $8,000
- Total Expenses: $7,500
- Allocated: 94%
February:
- Same if you didn't change budget
- But spending is $0
What Carries Over
Carry Over Categories
If you’ve enabled “Carry Over” on a category, unused amounts roll forward:
January:
- Entertainment: $300 budgeted
- Entertainment Spent: $200
- Remaining: $100
February:
- Entertainment Budget: $300
- Carried Over: +$100
- Total Available: $400
Example in Action:
Month 1:
Vacation Fund: $200 budgeted
Spent: $0
Carry Over: $200
Month 2:
Vacation Fund: $200 budgeted
+ Carried Over: $200
Total Available: $400
Spent: $0
Carry Over to Month 3: $400
Month 3:
Vacation Fund: $200 budgeted
+ Carried Over: $400
Total Available: $600
Spent: $0
Carry Over to Month 4: $600
Month 4 (Take vacation):
Vacation Fund: $200 budgeted
+ Carried Over: $600
Total Available: $800
Spent: $800 (vacation!)
Carry Over to Month 5: $0
Negative Carry Over
If you overspend a carry-over category, the negative carries forward:
January:
- Car Maintenance: $100 budgeted
- Spent: $350 (major repair)
- Over by: $250
February:
- Car Maintenance: $100 budgeted
- Carried Over: -$250 (negative!)
- Total Available: -$150 (already over before month starts!)
- Need to "pay back" the overage
Category Settings
Your category configurations persist:
- Category names
- Budget amounts
- Carry over settings
- Category order
- Icons
These don’t reset - they continue month-to-month until you change them.
Transactions
Past month’s transactions remain in your history:
- January transactions stay in January
- You can always view them
- They don’t affect February’s budget
- Historical data is preserved
Monthly Cycle Calendar
Week 4 of Current Month
What to do:
Review current month’s performance
- Which categories went over?
- Which came in under?
- Any surprises?
Discuss with partner
- What worked well?
- What needs adjustment?
- Any upcoming changes?
Plan adjustments for next month
- Income changes?
- Known large expenses?
- Need to adjust any budget amounts?
Last Day of Month
What happens automatically:
- Current month finalizes
- Carry over amounts calculate
- Next month’s budget becomes active at midnight
What you should do:
- Categorize all remaining transactions
- Review final spending numbers
- Make any last-minute adjustments
First Day of New Month
What resets automatically:
- Spending totals → $0
- Progress bars → 0%
- New month selected by default
What you should do:
- Check that any budget changes took effect
- Verify carry over amounts look correct
- Start fresh tracking for new month
Throughout the Month
Daily/Weekly:
- Categorize new transactions
- Monitor progress against budget
- Make mid-month adjustments if truly necessary (rare)
Mid-Month Check-in:
- Quick review with partner
- On track or need to slow spending?
- Any issues or concerns?
When Budget Amounts Change
Changing for Future Months
If you edit a category amount, it applies immediately to the current month and all future months:
Current: February
You change Groceries from $600 to $700
February: Now shows $700 (changes immediately)
March onward: Will show $700
January (past): Still shows $600 (doesn't change history)
Mid-Month Changes
If you change an amount mid-month:
February 15:
- Entertainment: $200 budgeted
- Spent: $150
- Remaining: $50
You increase to $300:
February 15 (after change):
- Entertainment: $300 budgeted
- Spent: $150
- Remaining: $150 (instant increase!)
Progress bar adjusts immediately.
Planning for New Month
Regular Monthly Planning Session
Recommended: Last week of current month
Time needed: 30-45 minutes
Agenda:
1. Review current month (10 min):
- Go through each category
- Budget vs. actual
- Note patterns
2. Discuss changes (15 min):
- Income changes?
- New expenses coming?
- Any budget adjustments needed?
- Life changes affecting budget?
3. Make adjustments (10 min):
- Update category amounts
- Add new categories
- Remove unused categories
- Reorder if needed
4. Confirm and save (5 min):
- Both partners review final budget
- Agree on changes
- Save for next month
5. Set goals (5 min):
- What are we focusing on next month?
- Any specific savings goals?
- Areas to watch closely?
Questions to Ask Each Month
Income:
- Any changes to income?
- Bonuses or extra income expected?
- Income reductions?
Expenses:
- Any upcoming large expenses?
- New subscriptions or bills?
- Anything we can cancel?
Goals:
- On track for savings goals?
- Any new financial goals?
- Emergency fund status?
Life:
- Any life changes affecting money?
- Travel plans?
- Home repairs needed?
Seasonal Adjustments
Some months require different budgets:
December
Typically increase:
- Gifts: +$300-500
- Entertainment: +$100-200 (holiday activities)
- Food: +$100 (holiday meals)
- Travel: +$200-500 (visiting family)
Adjust early: Set December budget in November so you’re prepared.
Summer
Typically increase:
- Entertainment: +$100-200 (outdoor activities)
- Travel: +$500-1,000 (vacation)
- Utilities: +$50-100 (AC)
Back to School (if kids)
Typically increase:
- Clothing: +$200-300
- School Supplies: +$100-200
- Activities: +$50-100 (sports, clubs)
Your Birthday Month
Consider budgeting extra for celebration:
- Entertainment: +$100-200
- Dining Out: +$100
Carry Over Strategy
When to Enable Carry Over
Good for:
- Irregular expenses (car maintenance, medical)
- Savings categories (vacation fund, emergency fund)
- Variable spending you want to smooth (entertainment)
Not needed for:
- Fixed expenses (rent, car payment)
- Regular essentials (groceries)
Managing Carry Over Categories
Review quarterly:
Vacation Fund with Carry Over:
Q1:
- Jan: Budget $200, Spend $0, Carry $200
- Feb: Budget $200, Spend $0, Carry $400
- Mar: Budget $200, Spend $0, Carry $600
Q2:
- Apr: Budget $200, Spend $0, Carry $800
- May: Budget $200, Spend $0, Carry $1,000
- Jun: Budget $200, Spend $1,200, Carry $0
Took $1,200 vacation, back to $0
Car Maintenance with Carry Over:
- Jan: +$75, Spend $0, Bank: $75
- Feb: +$75, Spend $0, Bank: $150
- Mar: +$75, Spend $350, Bank: -$125 (deficit)
- Apr: +$75, Spend $0, Bank: -$50 (recovering)
- May: +$75, Spend $0, Bank: $25 (back to positive)
- Jun: +$75, Spend $0, Bank: $100
Smooths irregular large expenses!
First Month vs. Ongoing Months
Your Very First Month
Expect imperfection:
- Budget amounts might be guesses
- You’ll probably go over some categories
- You’ll probably underspend others
- That’s okay! You’re learning.
Focus on:
- Setting up all categories
- Categorizing all transactions
- Learning the system
- Gathering data
Don’t stress about:
- Being perfect
- Coming in exactly on budget
- Having ideal amounts
Month 1 goal: Complete data collection and learning.
Month 2
Now you have data!
- Review Month 1 actual spending
- Adjust budget amounts to reality
- Add any categories you missed
- Remove categories you didn’t use
Month 2 goal: More realistic budget based on Month 1 data.
Month 3
Patterns emerging:
- Compare Month 1 vs Month 2
- Identify consistent patterns
- Fine-tune amounts
- Getting more accurate
Month 3 goal: Find your rhythm and establish routines.
Month 6+
Budgeting becomes second nature:
- Know your patterns
- Automatic categorization
- Quick monthly reviews
- Accurate projections
Ongoing goal: Maintain system, achieve financial goals, live with less money stress.
Troubleshooting
“I forgot to plan for next month”
No problem! Your budget automatically continues with same amounts. Just:
- Use current budget
- Make adjustments throughout month if needed
- Plan better for following month
“Every month I overspend the same categories”
Solution:
- Increase those budget amounts
- They’re unrealistic
- Budget reality, not wishful thinking
“I never spend some categories”
Solution:
- Reduce or remove them
- Reallocate to categories you actually use
- Or redirect to savings
“Our carry over categories are getting huge”
Options:
- Reduce monthly budget if building too much
- Use the money - that’s what it’s for!
- Reallocate to different goal if priorities changed
“We forgot about a big annual expense”
For current month:
- Temporarily reduce other categories
- Or accept going over budget this month
For future:
- Add category for that annual expense
- Divide by 12
- Budget monthly so money is there next year
Best Practices
1. Consistent Monthly Planning
Set a recurring event:
- Last Sunday of every month
- 30-minute budget meeting
- Both partners attend
- Review, adjust, plan
2. Don’t Over-Adjust Mid-Month
Resist the urge to constantly tweak:
- Let the month play out
- Gather full month of data
- Adjust for next month
Exception: True emergencies or major life changes.
3. Use Carry Over Strategically
Not for everything - just categories where it makes sense:
- Irregular expenses
- Savings goals
- Variable discretionary
Fixed bills don’t need carry over.
4. Celebrate Wins
When you stay on budget:
- Acknowledge the achievement
- Discuss what worked
- Reward yourselves (from personal spending!)
- Build positive momentum
5. Learn from Overages
When you go over budget:
- Don’t beat yourselves up
- Analyze what happened
- Was budget too low?
- Was spending too high?
- Adjust accordingly
It’s data, not failure!
Next Steps
Now that you understand monthly resets:
- Managing Your Budget - Advanced management tools
- Budget Progress Tracking - Monitor spending
- Creating Your First Budget - Start from scratch
- Setting Category Budgets - Master amounts
Need help? Contact our support team - we’re here to assist!