What do you do with extra money in your budget

I recently had a friend reach out with a question about what to do with extra money in his budget. He reached the end of the month and still had some money in a few categories.

The first thing I said was congratulations! That’s exactly what you want. That means you’re living below your means and spending less than you make. But there are some things to think about in this situation.

What can you do with the extra money?

The first thing you should do is make sure you aren’t over spending in another category. If you’ve gone over somewhere else, cover that with the categories where you’re under. You don’t want to end the month with any category showing negative.

The second thing you can do is just leave the money where it is, and let it roll into the next month. For example, if you budget $50 into restaurants and you have $7 left, you can start the next month month with $7 already there. Then you’re just deciding if you want to budget $43 to bring the $7 up to $50, or, if you want to budget the full $50, keep the extra $7 and have $57 the following month for restaurants. Maybe you know you’d like to go out a little more and the extra money makes sense!

The third thing you can do is to apply anything extra towards a goal. Usually these would be big goals, but it can be anything. For example, you can send any extra money each month towards paying off your mortgage early. Or maybe you’re saving for a big vacation, you can put the extra money towards that.

The great thing is that there’s really no wrong answer here. Having a little extra money in your budget at the end of the month is a fantastic place to be.

Can I give you something?

If your budget needs work, I have something for you. It’s my completely free Master Your Budget Categories guide, with over 270+ categories laid out and organized specifically to help you budget better. I’ll even show you exactly what goes on my budget.

Think of it as the foundation to your perfect budget. Can I send you my categories?

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