Planning Series Part 1: EOY Budget Prep

Thinking about my own preparations for next year – do these things to get ready for starting with a fresh budget January 1st, 2021.

Let’s get ready to Budget!!

Reflect on your goals.

Glance at that goal sheet you filled in last year. If you didn’t write them down (I used a sticky note and put it on the inside of my budget binder), think back to what they were. Also, write them down now. Ask yourself reflective questions, look at the year ahead and see if those financial goals still apply. Jot them on scrap paper, a sticky note, a fancy goal sheet – whatever. Stash them somewhere you’ll not loose them. You will feel immense pride and accomplishment looking back next year, on this year’s goals.

Review Excel Budget Finder Worksheets.

I use one I’m going to publish soon as a template. For me this, this is a simple Excel sheet with all my minor little breakout budget categories and how they roll up into larger, more general categories in my budget. Its how I keep track of my Utilities being $300 a month or $400 a month, or how much I have to put into investments or towards student loan debt. If you don’t use something similar, a regular pad of paper and your online or paper statements are the next best thing. Try to get a sense of what you spend monthly and what you spend it on. Jot it all down and add it all up. We’ll use these numbers for our next month’s budget. Our goal here is to know what categories our budgets will do best with, and what educated target spending or savings goals our budget will have per category.

Create a fresh YNAB Budget.

In YNAB speak this is the “Fresh Start” option that keeps your base categories, goals and notes, but clears away all transactions and balances. Do this after you’ve made a copy of your 2020 Budget. For me, this gives me a snapshot of last year’s thinking and a blank canvas that is more like a paint by number – I just need to fill in the values from my Budget Finder Worksheet. YNAB is everything. At this point, we haven’t budgeted anything – simply identified target spend / save goals and category names for our budget.

Reconcile Your Accounts.


Only budget the money you have. A YNAB rule and quite frankly – common sense. So many budget guidance and older, more established apps like Mint.com use forecasting and transaction reporting and call it “budgeting”. This has confused me since my PARENTS decades ago first tried to get me to write down all my costs on a piece of paper. Listen – budgeting is not forecasting right? So – if we can only budget the money we have, we have to first know exactly what’s in our accounts. Take the time and reconcile at least every month. Confirm those account balances in reality match what you’re tracking in YNAB. Update those account balances. Now, you’re ready budget.

Give those dollars jobs.


Now that your categories are set, goals established, YNAB updated and accounts are reconciled, you are ready to distribute all the dollars you have into some category. Given your priorities, see how far your dollars can stretch. Once they have gone as far as they can ($0), stop budgeting. Don’t add future pay checks in there – that’s forecasting – because the money isn’t yet in the bank. A great tip from the Budget Mom’s Budget by Paycheck method is the printable calendar. For me, its like forecasting – without forecasting. Its looking ahead and mentally mapping what pay checks cover what costs. Pretty soon, paychecks won’t be spent on immediate needs like “Honey, call the power company to turn the lights back on.”, but more future needs – using dollars to pay for future jobs – like paying forward on debt or setting aside money for next month’s water bill.

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