How to Budget in Monarch | Flex Budget
This Monarch Money budgeting tutorial walks users through a step-by-step process for setting up an effective budget, from linking financial accounts and categorizing transactions to leveraging Monarch’s unique Flex Budget system. The guide highlights best practices for estimating income, managing recurring and variable expenses, and planning for non-monthly costs to prevent financial surprises. Users will learn how to track spending in real time, make data-driven adjustments, and ensure their budget aligns with financial goals. Whether you’re new to budgeting or refining an existing plan, this video provides actionable strategies to maximize Monarch Money’s features for smarter financial management.
Introduction to Budgeting in Monarch (00:00)
The video focuses on setting realistic budget targets based on past spending data to create an intentional money management plan.
Preliminary Steps Before Budgeting (00:29)
Users should have linked all financial accounts, renamed them for clarity, updated spending categories, reviewed transactions for accuracy, and identified non-monthly expenses.
Budgeting Methods in Monarch (03:21)
Monarch Money offers two budget types:
- The traditional category budget
- The flex budget, which organizes spending into fixed, flexible, and non-monthly categories
Setting Up the Flex Budget (04:40)
- Users can choose the Flex Budget system in Monarch’s settings.
- All changes apply to future months unless manually adjusted for a one-off month.
- Monarch calculates a default budget based on 3-6 months of historical data.
Reviewing and Adjusting Income (06:56)
- Income should be estimated based on the minimum expected monthly earnings.
- Historical averages and fluctuations should be reviewed to set a realistic baseline.
Assigning Fixed Expenses (12:25)
- Users categorize recurring monthly expenses, ensuring accurate amounts based on past spending trends.
- Helps determine an emergency fund baseline.
Managing Non-Monthly Expenses (15:25)
- Expenses that occur periodically (e.g., quarterly or annually) should be divided into monthly savings contributions.
- This prevents financial strain when these expenses arise.
Allocating Flexible Spending (18:32)
- Users can distribute the remaining budget among flexible categories (e.g., groceries, shopping).
- Adjustments can be made based on past spending patterns.
Tracking Spending and Adjustments (22:09)
- Monarch provides real-time tracking of expected vs. actual spending.
- Users can adjust budget categories and disable or exclude certain expenses if needed.
Finalizing the Budget and Next Steps (26:57)
- The budget setup is reviewed.
- The importance of rollover funds in non-monthly categories is explained.
- Users are encouraged to revisit and refine their budget regularly.