What does your monthly budget review process look like?

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1

What does your monthly budget review process look like? Walk us through it. I would give an example of mine, but I haven’t yet made this a part of my workflow, so I’m really curious what others are doing and if something similar will help me!

2

I don’t do a monthly review in a traditional sense, I use the Savings Budget, so I true up the categories with monies from other categories as you would if you use an envelope (and that is part of your strategy I suppose). If I notice an upward trend in spending, I do adjust my budget. I have a Misc category that is also used for sinking funds, so generally I pull from there. Or in a more recent case, I have adjusted books and entertainment as I am buying more books than going out. My bigger process for budgeting is at the end of the year setting things up for the next year.
I too am curious to see what others do. I love seeing the other processes out there.

3

We like looking at the Year to Date Comparison, sorted by Favorability. We can see where we are over/under budget and know if it is conscious decisions or just overspending. This way we can decide not to worry about being over budget in a category in any given month, as long as the year is trending in a good direction.

I made a slight modification to include all transactions for the current month are included (I do a lot of future dated recurring bills) and this is also the sheet where I get my “uncategorized transactions” count in case I missed something as it came in.

4

I first reconcile my latest account statements.I then review any large expense category that is trending to go over my total yearly budget estimate for that category. I also look for any expense category that is trending to be significantly less than what was budgeted for that category for the year. I also account for any new expenses that were not planned by adjusting the budget or creating a new category. I move excess budgeted dollars or savings where needed to keep the total budget balanced.

5

I have a “Month End Close” process that I manage in Todoist which I use for all task / project management. I’m retired now so my processes have on one hand simplified while bolstering others. For the latter that really means tracking some task stuff that in the past I never really did because it seemed pedantic. I now have the time, so I track those items now.

Anyway, my process is the following and usually in this order:

  1. Balance Fidelity Spending account using Account Reconciliation sheet.
  2. Balance my two credit card accounts using Account Reconciliation sheet.
  3. Reconcile the Savings Budget sheet.
  4. Update Categories and Group level Budget sheets to account for one-off or outlier expenses that shouldn’t apply going forward.
  5. Review and update our Subscriptions which have their own Budget Plan worksheet feeding Categories because the monthly rates tend to change on those somewhat frequently and I’m ad-hoc activating / pausing them fairly often depending on how we use them. (On a separate note, I bastardized @jpfeiber Budget Plan process for my own use so I have separate Budget Sheets for most of my Groups in Categories).
  6. Pay off credit card balances to zero.
  7. Update Categories or any of my Group specific Budget Plan sheets for upcoming month if I know of a one-time expense that is going to hit that I didn’t already know about.
  8. I then transfer money into Fidelity Spending for the coming month’s planned budget from (1) my wife’s separate business revenue account at Fidelity, if applicable and/or (2) our online savings account.

Step 8 has recently changed for me and I’m still getting the hang of what I want to be doing here. We went from a consistent, paycheck direct deposit + more rolling CC payoff process to a more manual one that requires me to do more transferring of funds. We both went from corporate jobs to ultimately me being retired and wife running her own business with sporadic pay. Thus, moving money is more manual and math crunching now. Pretty much always ran a surplus when we were dual income and never really worried about rolling the month over too much back then, but now I have to be more on the ball with how much money I really need in our account.