Step 2: Setting up Your Budget

You're on Step 2 of Lunch Money's Budgeting Guide!

Before You Start

Before you can start budgeting in Lunch Money, you need to set up two key elements:

1. Categories: If you need some help, check out our guide on budgeting categories here. Make sure you have both expense and income categories set up (categories with the 'Treat as Income' property enabled).

2. Transactions: Lunch Money supports a number of ways to import transactions, such as automatic bank syncing or uploading a CSV or PDF.

Lunch Money supports budgeting by category, with each transaction assigned to only one category. This makes it easy to keep track of where your money is going.

Once you have your categories set up and transactions imported, you'll have a clear picture of how much you've spent and how much you still have left.

Having both pieces in place is the best way to ensure your budget works like it should!

Setting Your Budgeting Period

At the top of the Budget page, you'll see a time period. By default, this is set to monthly, meaning your budget resets on the 1st of every month. In the screenshot below, you can see the budget is set from Saturday, Feb 1 to Friday, Feb 28:

But maybe that doesn't fit your life? For example:

• Do you get paid twice a month?

• Want to budget weekly instead of monthly?

• Would you prefer to start your budget on the 15th of every month?

No problem! Lunch Money lets you choose your own budgeting period.

How do I configure my custom budgeting period?

To set up your budgeting period, click on the button in the upper right corner of your Budget page and look for this option:

What does "Starting On" mean?

Let's say you get paid every 2 weeks and want your budget to reset with your payday. Just choose the date of your first paycheck as your starting date. This date becomes the starting point for all future budget periods.

For example:

• If your start date is Jan 1, 2025, and you are budgeting bi-weekly, your budgeting periods would be as follows:

  • Jan 1-14, Jan 15-28, Jan 29- Feb 11…

• If your start date is Jan 2, 2025:

  • Jan 2-15, Jan 16-29, Jan 30-Feb 12…

Now that your budget period is set, it's time to decide whether you'll budget with money you have or money you're expecting.

Managing Your Income Settings

Ask yourself this: will you budget with money you expect to receive, or only with money that's already in your account? Lunch Money lets you choose– including a flexible option that uses whichever amount is larger. This helps you plan in a way that fits your real life.

You can manage your income settings in the 'Other Settings' section of . You have three choices:

Budgeted Income

Plan your budget using the money you think you will receive during this period (from the 'Expected' column).

• Good for: People with steady, predictable income like regular paychecks; those who want to plan ahead for the full period

• Why you might not want this: Your actual income might be less than expected, leading to overspending

Actual Income Activity

Budget only with the money you’ve already received during this period (from the 'Activity' column)

• Good for: Living paycheck to paycheck; variable or unpredictable income; freelancers or gig workers; anyone who prefers the security of budgeting only with money in hand

• Why you might not want this: Can't plan ahead for the full period; might need to adjust your budget multiple times as income arrives

Larger of Budgeted or Actual

Uses whichever is bigger– your expected income or what you've actually received.

• Good for: People who get a regular paycheck plus extra money sometimes (like overtime, commission or bonuses); anyone who wants to start planning their budget right away but have more money to budget if they earn more than expected

• Why you might not want this: If you often earn less than expected, you might overspend; can be confusing since your “available to budget” might change during the month

Defining Rollover Options

Depending on your budgeting strategy, you'll want to define your rollover options.

What's a Rollover?

A rollover is when money from one budget period carries forward into the next. This can happen in two ways:

1. For individual categories: When you don't spend all the money budgeted for a category (like Restaurants), that leftover amount can roll forward. Same goes for overspending– if you spend more than budgeted, that deficit can carry forward too. These amounts show up in the 'Available' column.

• Leftover money example: Budgeted ($150) - Activity ($100) = Available ($50). The money you budgeted, but did not spend:

• Overspending example: Budgeted ($50) - Activity ($100) = Available (-$50). The money you spent, but did not budget for:

• For your overall budget (the "general pool"): The general pool is your total money available to budget across all categories. If you don't assign all your income to categories, that "Left to Budget" (positive) or “Overbudgeted” (negative) amount can roll into the next period's general pool. This gives you more flexibility in future months.

  

  For example, if you budgeted all but $410.00 of your income in January, you could roll over the remaining $410.00 to be used in February instead.

By default, rollovers are turned off when you first start. Depending on your budgeting strategy, you'll want to define your rollover options. Let's explore how they work!

Rollover Options for the General Pool (Income)

In Lunch Money, all income goes into the general pool — this is your full amount of money available to budget for the period. Imagine it like a big pool of cash 💸.

It includes:

• This period's income (activity or budgeted value, depending on your Income settings)

• Leftover money (in the 'Available' column) from expense categories that rolled into the general pool

• 'Left to Budget' or 'Overbudgeted' amounts from previous periods (if general pool rollovers are on)

General pool rollovers are off by default. When you enable them, any 'Left to Budget' or 'Overbudgeted' amounts will automatically roll over to the next period. There are no rollover options for individual income categories.

Reasons to Turn ON General Pool Rollovers

1. You are using a zero-based or envelope budgeting method. These budgeting methods encourage you to create buffers in your budget by carrying forward savings into future budget periods.

1. Useful if your income fluctuates. If your income changes from month to month, rollovers can help smooth out lean periods by letting you carry forward unspent income from higher-earning months.

Reasons to Turn OFF General Pool Rollovers

1. You are budgeting a set amount every period. If you plan to budget a specific amount each period, say $5,000, regardless of your income, general pool rollovers will only confuse the situation.

1. You prefer a clean slate each month. Some people find it easier to start fresh each budget period without a carryover.

How to turn on General Pool Rollovers

1. Go to

2. Find "General Pool Rollover Setting"

3. Toggle on the "Rollover 'Left to Budget' and 'Overbudgeted' amounts":

1. Pick a date to start the rollover from. If you're just starting your budget, use the first day of the current budgeting period.

2. Click on "Start Rolling Over"

Rollover Options for Expense Categories

Think of your expense categories like envelopes of money. Let’s say you put $200 in your "Restaurants" envelope for May, but you only spent $160. What should happen to that leftover $40?

In Lunch Money, each category can have its own rollover setting. You have three options:

• Do nothing: The leftover money disappears, and you'll start fresh next month.

  • Good for: Simple tracking with no carry-over.

  • Why you might not want this: You don’t want under- or overspent money to “vanish” next period.

• Rollover to the same category: Any leftover money stays in the same envelope.

  • Good for: setting up a sinking fund for large future expenses, following an envelope budgeting approach, or making up for overspending.

  • Why you might not want this: You don’t want overspending in one month to affect your next month or you want to move your leftover money somewhere else.

• Rollover to the general pool: Leftover money is moved to the general pool for future use.

  • Good for: Flexible budgeting. Extra money isn’t locked to one category; you can use it wherever you need it in the following period. It also keeps your categories tidy.

  • Why you might not want this: You want to track your progress in a specific category. If you’re saving up for something big, the extra money won’t stay in that envelope.

Category Rollover Example

Here’s what this looks like in action. Below is a snapshot of three budget categories at the end of January, including their rollover options.

January budget

• Restaurants: You overspent by $10, so that category will start with $-10 in February

• Cafes and Transportation: You had a total of $35 left over. Since both categories roll into the general pool, the general pool will start with $35 in February.

So, for February, your "Restaurants" category will start with a $10 deficit, and your general pool will include any unbudgeted income (including income rolled over from January), and the $35 rolled over from the "Cafes" and "Transportation" categories.

How to turn on Category Rollovers

1. Click on the > icon for the category you want to set

2. Find 'Rollover Options'

3. Choose the rollover option you want for this particular category

   
4. If applicable, pick a date to start the rollover from. If you're just starting your budget, use the first day of the current budgeting period.

Enabling Category Group Budgeting

Category groups let you organize related categories together (like grouping Airfare, Hotel and Dining under "Travel"). If you use category groups, you can choose to:

• Budget by individual categories

• Budget by category group

If you budget by category group, you can set one budget amount and rollover option for the whole group. The group acts as one combined envelope– all the money rolls up to the group level, and rollovers happen at the group level. You'll still be able to budget different amounts for each subcategory within the group's total.

This works well if you know how much you want to spend in an overall category, such as travel, but don't care about exact amounts for each subcategory, like airfare, hotel, dining, car rental..

Setting a category group budget is optional. If you don't set one, the group budget automatically becomes the sum of all subcategory budgets. You might want to:

• Skip setting a group budget if you want it to simply total your subcategory budgets

• Set a larger group budget if you want extra flexibility to move money between subcategories without having to adjust individual budgets

How to turn on Category Group Budgeting

1. In the Outflow table, click the arrow () to the right of any category group

2. In the 'Edit Category' panel, scroll down to "Category Group Budgeting"

3. Toggle the option labeled "Enable Category Group Budgeting":

   

Final Setup Checklist

Before you start using your budget, make sure you’ve covered everything:

• Set up your income and expense categories

• Import your transactions into Lunch Money

• Choose your budgeting period (default: monthly)

• Select how your income will be handled (budgeted, actual, or larger of)

• Decide on general pool rollovers (default: off)

• Choose rollover options for each expense category (default: do nothing)

• Enable category group budgeting if needed (optional)

All set? Let's explore your Budget page! 👇

Go to Step 3: Navigating the budget page