If I’m 30 pounds overweight, would it be better for me to look back and analyze all I’ve eaten that caused the 30 pounds of weight gain? Or would I be better off planning what to eat going forward?
When it comes to managing money, getting out of debt, “finally doing things right”…people are so overwhelmed at the thought of getting started.
If you’re just hearing about YNAB, or just now thinking that maybe we’re right, and maybe you do need a budget, you’re probably incorrectlythinking that the whole task of starting requires something like:
- an analysis of your spending during the past n months.
- importing mountains of historical data and laboriously categorizing it to a level of granularity that would make even the snootiest of accountants raise their eyebrows your direction.
- a knowledge of exactly what you’re going to spend, so you can budget accordingly. (Um, if you knew what you were going to spend…why are you budgeting? :))
It’s no wonder you think this process is going to take hours. I propose starting by doing the following:
- Look at your bank balance online. Add your account to YNAB and make that balance your starting balance.
- Click over to the Budget and adjust the default categories to your liking. You have six minutes to make your adjustments. Any more than that and you’re thinking too hard about it. Plus, you can always change everything later.
- Budget what you have Available. Your starting bank balance is what you’ll have available. Just ask yourself one question, “What does this money need to do before I’m paid again?”
Jesse, I have way more than just a single checking account.
Okay. Repeat steps #1 and #3 from above. (You don’t need to do step #2 each time obviously.) Or, if you really are feeling pretty overwhelmed, just use your “main” or “most popular” account.
Jesse, I have 10 years of Quicken data, and three children. The children are optional, but I’d really like to keep my Quicken data.
Okay. Just don’t import it into YNAB. Just know that you have that Quicken data if you ever need it. (You won’t need it.)
Jesse, we stopped using YNAB for three months, but want to start again. Should we “catch up” then move forward?
Will catching up take more than 30 minutes? If yes, then just do the old and reliable File -> Fresh Start option. It’ll keep your categories around. The adjust your balances to be current as of today, and move forward.
Jesse, my spouse doesn’t want to budget.
They’re probably feeling overwhelmed, and they may not get as excited about 10 years of Quicken data as you do. Maybe consider starting by just using YNAB for one account, then slowly add things as they get used to the idea (and realize that, “Hey, this isn’t nearly as bad as I thought!”).
Jesse, you talk about living on last month’s income, but we will NEVER get there.
On average, it takes YNABers four months to live on last month’s income. Our lead teacher needed a year to get there. Everyone’s different, but it is possible. Tens of thousands of people have proved that. And they were in worse shape than you :)
Oh, and where is the option to import children into YNAB ? ;-)
Mine were exported [to college]. I’m an empty nester. ;-P~~~
My problem with budgeting with ynab is that i recieve my pay check at the 20th of each month and donno how to start budgeting cause i start payments right after the income but its still before first day of the month
Why don’t you allocate one-third of that income to this month, and two-thirds to next month, and do the same with each check from then on. Next month you will have a month’s worth of income and a month’s worth of bills to work with. Eventually you can save some and then pay end-of-month bills with last month’s check, so that the check on the 20th can be budgeted entirely for next month. It won’t take you long to get there.
Had the same problem, thanks! Just did the split on our budget.
Tks for the help. im gonna try that so i hope i can get it right =)
I have the same problem.
It would not be possible to create a choice of when the month starts?
thank you
Just apply it for this month and what ever you haven’t budgeted will roll over to next month’s buffer anyway. Then start budgetting for that month?
I have this same issue, and I do not have the mental skills to budget 20% to this month (I’m paid the 25th) and the rest for the next month. It really would be simpler for those of us who can barely calcuate a tip if we could choose our “month.” In the meantime, mark the income as “this month” and let it roll over to the buffer.
It might be helpful to consider your month going from the 20th to the 20th… so when you deposit your paycheck (assuming you don’t yet have the funds to be living on last month’s income), you’d consider it “income for this month”. Even if you don’t pay your house payment/rent until the first, you can put the money in the ‘rent section’ on the 20th, and the money will roll over to the next month for you to use on the first. Same things with bills you’d pay on the 15th… If you get your May paycheck on the 20th and deposit it, go ahead and budget the June 15th bill and it’ll roll over for you to use on the 15th of June.
I’m paid on kind of an off-schedule like yours and this has worked well for us :)
I’m not feeling overwhelmed, just very frustrated with having to restart 3 times in 6 weeks or so. I’m a newbie and have made mistakes and lost YNAB data and haven’t backed up frequently enough.
YNAB makes an automatic backup in a folder for you – check the YNAB file on your computer to get a previous version. Start from yesterday…
I never seem to get the time to input all of my spending and then I end up getting behind. Even with the app on my phone, I just can’t seem to do it.
Also, is there a way on the app to record income–like when I go to the ATM? I want to use YNAB to record my incoming/outgoing cash too
I, too, would like to be able to record different income sources. My husband and I keep our respective incomes and expenses in separate files but we run our joint accounts and transactions through my file using a Master Category called Shared Expenses and, of course, Joint Bank Accounts and a Credit Card.
When my husband contributes to any of the Joint Accounts I call it Income but when I contribute it is a transfer because it has already been recorded as my income.
Other than exporting to a spreadsheet I find it tricky to ensure that we have correctly contributed to the joint income / expenses.
Any suggestions?
My significant other and I are in the same situation, but I look at it differently. All of my money comes to my checking account, after which I transfer our agreed upon amount to the joint checking. I look at all the money going into our joint checking as “my money,” all transfers into the account by my fiance as “her money” and all of the expenses coming out of that account as paid half by “my money.” This means that I adjust all transfers to that account from my fiance to 0 and all expenses and transfers out of the joint to half of the actual amount (since half of that money was mine). This means that I reconcile the amount YNAB shows for my joint account to half of what I see in on my bank website. This also means that I can track all my personal expenses (so she doesn’t know how much I spend on video games while I don’t know how much of her money she spends on highly specialized baking pans :)) while also easily tracking household expenses (if I ever need it, I double the amounts).
Withdrawing cash from an ATM is not income. You already had the money in the bank. You are simply moving it from one pocket to another one.
If you want to track cash spending, create a new Account named “Cash.” Record ATM withdrawals as transfers from your bank account to you cash account.
As you spend your cash, record the transactions in the Cash account register.
I LOVE the fresh start option…
Jesse, thanks for all your suggestions. At the end of the day, budgeting is simply a tool to keep our finances in perspective and avoid potential catastrophes. Spending just 10 minutes each morning in review, has considerably changed our spending habits/patterns. Thank you for your passion and commitment to YNAB!
This is our 2nd mo on YNAB. We had a birthday & HS grad/open house this wknd. Our budget is in the toilet…..ahhhhhhh!!
My husband is frustrated because we’re “just” making our mo bills…..I’m thrilled BECAUSE we’re making our mo bills! Overall though it seems like we’re not making progress, just treading water.
We’ve tried putting stuff on eBay/Craig’s list but don’t really have any big ticket items to bring in any big cash.
I don’t know what to do……
Give it six months – you will see change. I spent the first few months overspending and eating into my emergency fund, but I started to understand HOW I was spending money, and now things are changing. It also takes time to understand what it means to have money saved in a particular category – it’s like a gift from heaven when you figure it out at the gut level. Life-changing.
We have been trying to pay off some debt and live on less, plus get rid of crap. Even if you don’t sell big things, little things begin to add up. A 10 here, a 20 there– you have dinner or parts to fix something minor around the house. That’s money that is over what you budgeted, so it helps you use the regular income to pay bills/pay down debt. Keep it going!
Sorry if saying “cr..” was bad. There was quite a bit of stuff we no longer needed, lol.
*sigh*
Hitting fresh start. Again.
Banging my head against the spouse anti-budgetary wall. Again.
Giving every dollar a job–and then finding all my dollars are gone. Again.
I think I need to find a new angle to approach this from.
Print out Jesse’s story and give it to your spouse. It’s really an easy read and interesting.
Also, my mom was resistant, but we took this approach. We figured out her monthly amount to spend, and gave her her own account with that amount as income, and just the categories she uses (hair, nails, makeup, lunches out, gas, drugstore items, clothes, shoes, gifts, etc.). We let her budget that amount for just those things, so she can make her own decisions within those parameters. Not everyone needs to see the whole budget, if you can agree on the monthly amount that each person controls.
We have had some carry over debt from things like carpet etc., but most of ours is from our son’s kidney disease these last 3 years. We’ve incured around $20,000 in medical expenses despite help from family and friends. We have trouble living on one income anyway, month to month, but where can we find extra money to pay medical expenses? It seems impossible even with us cutting any extras down to bare bones. Thank you for your help.
This seems crazy, but call the hospital or individual doctors and tell them that you WANT to pay them, but you CAN’T pay them as much as they billed you. It seems crazy to ask for a discount, but do it. It can’t hurt, and many places will actually work with you.
I, too, would like to be able to record different income sources. My husband and I keep our respective incomes and expenses in separate files but we run our joint accounts and transactions through my file using a Master Category called Shared Expenses and, of course, Joint Bank Accounts and a Credit Card.
When my husband contributes to any of the Joint Accounts I call it Income but when I contribute it is a transfer because it has already been recorded as my income.
Other than exporting to a spreadsheet I find it tricky to ensure that we have correctly contributed to the joint income / expenses.
Any suggestions?
About 4 years ago, my husband and I were in the same situation. We had our own checking accounts and had a really complicated spreadsheet to show how much each was to pay into the joint checking account to cover the monthly expenses.
We finally decided to give a simpler approach a try. We combined our accounts into one joint operating account. Both paychecks go in, all expenses go out. We each have $80 per month as “blow” money that we take out as cash and can spend on whatever we like. It is SO MUCH SIMPLER this way. No figuring out how to record transfers in/out from his/my accounts, no his/mine/ours. It is just our money. That’s it. About 2 years after we combined accounts, we discovered YNAB and the task of budgeting just became that much simpler.
If you combine your money like you have combined your lives, using YNAB becomes a breeze.
Sometimes hearing it from someone else makes it seem simpler. I’ve tried to get out of the trap of multiple bank accounts and seem to keep falling back in. Simple is always the key–less brainpower needed to budget so you can focus on the things you enjoy.
Just the jumpstart I needed. Refreshing feeling to be unburdened to have to scour for past years of financial before starting. Ahhhh.
I’m not having to start over for May-June, but we took a huge hit, Landing in the hospital for three days, that was like adding a fully loaded credit card debt to my budget at 8% a month interest! But, a few minor adjustments to the YNAB (the budget that tells me when to breath, making life easier) and we move on. Our “goal dates” have changed, but the goal hasn’t changed. Get out of debt, live under our means and have $ for a medical bills. (not debt!) oh yeah, and fly Fishing in the Bahama’s some day!
Been on YNAB since November. Financial situation is worse because of rising costs out of our control (gas, groceries) and costs higher than estimates provided (heat, electricity in rental house). We bankrupted and foreclosed out of the impossible situation we were in last year. So no long term debt except student loans. Rent about to go up, incomes are flat, costs are rising. Can’t seem to save for oncoming dental nightmare, can’t even get to spending last month’s money. But I really know where I am am financially and it’s so much better than either quicken or seat of pants planning which I did when my quicken file corrupted and ate my 10 years of history. Twice.
I haven’t figured out how to solve me financial equation but at least I’m not driving by looking only in the rear view mirror.
Having the right perspective is critical to success- in this case thinking from a place of abundance rather than poverty. Never have enough (poverty) versus I have everything I need at this point to accomplish what is before me…
Awesome insight Paula!
I balanced my previous checking program (“Money”) & then started with that balance when I started YNAB. I’ve been very good (for me) keeping everything up to date & was still entering in Money to cross-check myself until I had a better feel for YNAB. Both programs matched at all times until… I felt like I wanted to try to import my banking info since yesterday was my statement cut-off. Holy cow!!! Did that mess everything up! I’m almost feeling like I need to start over again & grateful it’s only a couple weeks worth of data.
What could I possibly have done wrong? I did notice it imported all transactions since my last statement in April, yet I started YNAB in mid-May. I thought I could just delete everything that was prior to my YNAB Starting Balance, but that only made it worse! Ugh! Feeling frustrated & scared right now–don’t want to pay any bills for fear I’ve NOT got the money I thought I did! Yikes!
I’ve been using YNAB for about 5 months. It’s taken some time, and a few fresh starts… but this past month we had an unexpected care repair bill. And I had the money! In the past it would have gone on the credit card, and would have taken a year to be paid off. But thanks to giving every dollar a job, I had enough saved. This was a great feeling. Thank you YNAB.
I LOVE YNAB and have been using it for years now, but I’m a bit of a rebel. So far I haven’t been able to wrap my brain around “giving every $ a job”. For some reason it freaks me out and make me feel like I have no $$ or something. However, I check my accounts at least every other day and always click on “budget” to get a view of where my spending is going so I can discipline myself better for the next month. I have 2 biz accounts and a regular checking account. I also created a “fake savings” account that I don’t include in my official budget for the $ that I have as a buffer in my checking, but don’t really want to touch…make sense? lol the point is, sometimes you can’t do everything perfectly by the book just do your best and check your accounts often….downloading from my bank is VERY helpful and helps from having to enter so much on your own. I no longer keep a millions receipts in my wallet :) Just thought I’d share my angle, hope it helps and maybe someday I’ll open up to “giving every $ a job”!! Next, I’m taking the webinar for “saving for college” for my teens :)
Thanks for the encouragement! Got off track 3 months ago, and I’m going to get started tonight. Fresh Start Update!!
My husband and I have 3 bank accounts and my student loans jumped from 80 to 239 (cause my income went up when we got married….:() but for once we didn’t overdraw this week or last (we’ve been using for close to 3 weeks now)…I don’t see how we will ever live on last month’s income but I have hope
This was a good post! Thanks. I was mentally going toward overload.
Start Fresh!!! Love it.
wow…what perfect timing. We found YNAB a few months ago…and we were doing great!… well… found the realization of our actual financial situation frightening…but…we did the budget and we were following it….AND we switched some things around and were really doing well paying off debts.
… but then…. 5 weeks ago we had a beautiful baby boy! …and… budget?..what budget?!?… then it went on… and I’ve been dreading and soooo overwhelmed by going back and logging all those expenses. I don’t even know what they all are anymore…Oh the backlog!
I didn’t know there was a fresh start option…Thank you ….THANK YOU!!! We’ll be starting fresh tomorrow.
Imagine my surprise when I saw the “Read this if you’re feeling overwhelmed” subject line in my inbox this morning….perfect timing…perfect!
My husband and I are only living on one income right now, and have huge one-time expenses. We barely make enough to meet expenses, much less budget for savings or everything we need to spend on (like his 401k). I get frustrated, don’t input the bills, and then leave it for months because I still don’t feel in control or like I understand well everything that we can do with YNAB. We’re a month behind and until I get work will continue to be. Suggestions?
Thank you for this post. I had tried YNAB months ago, but never fully jumped in. Today I bought it, but was trying to figure out what to do with the money that’s in the account NOW. Your comment “what does this money need to do before I get paid again” was an “aha” moment for me. It’s “extra” money (only coming in for two more months) so I had kind of been winging it. Now I think I have a better feel for what you are talking about. Thanks! Not so overwhelmed now.
I would like to budget, I really would! Just look at my excel pages! I’ve spent many hours on them! I really want to live on last month’s income! But I’m an expat and my life happens in three currencies. Last I checked your software couldn’t do that! If I just have a currencyA account and currencyB account can I do that? In different currencies? Without having to do all kinds of crazy math and futzing with crazy-adjustable exchange rates? (right now I just pay into currencyC for tuition so I don’t think I need to list a whole other account for it…)
I live in Germany and budget in Euro and USD. It is such a pain! There is no such thing as a “fixed expense” since the exchange rate is always fluctuating. Logging transactions into my “Cash in Hand” category is a nightmare.
Using two separate accounts for your two separate currencies might not work because your total budget percentages would be inaccurate as well as your amount budgeted for a category. If I budget 100 USD for “Personal Items” and spend 100 Euro on YNAB it will look correct but my bank account will tell a different story and I will be over budget.
I still haven’t found a good strategy that doesn’t involve tons of math but it is nice to know I’m not the only one struggling with the dilemma of budgeting with two currencies!
Hi All,
I’m wondering how to handle reimbursements that carry from one month to the next with out it looking like I’m “overspending”. I spend money on behalf of my employer and get reimbursed, often in the following month. What I’m doing now is putting the expense in the month it happens and then entering the reimbursement as a “negative expense” when I get it for the same category. If they happen in the same month they cancel each other out but if I get repaid a month later it looks like I overspent in month 1 and have an excess amount in that category in month 2. Any suggestions will be much appreciated!
This happens to me on a regular basis due to being reimbursed by my group benefits plan for things like chiropractic, dental etc. and also receiving funds from my ex-husband relating to my child’s activities. It will look like you have overspent but I would roll the amount over into the next month (the arrow faces right instead of down) so that it becomes a negative category balance and isn’t affecting your next month’s buffer. Does that make sense? Then the following month when you are reimbursed, instead of allocating it as ‘income’, allocate it to your ‘work expenses’ category and it cancels out. Simple as that. You just have to be comfortable seeing the red and knowing that you are getting that money back.
Hi Penny,
It seems to me (without having an opportunity to look at your screen) that when you have “overspent” in this category, your red arrow is pointing down, so that the overspending is being totaled at the bottom of your budget. If you click on the arrow, you can change it to point to the right so that the overage flows to the next month in that same category.
For example: In May, let’s say you went on a business trip and spent $500 out of your checking account. You would classify all of thos expenses to you “Work Expenses – for reimbursement” budget line item. If you don’t budget any $$$ for this category (I wouldn’t as it is to-be reimbursed), at the end of May, you would have an “overspent” red balance of $500. If your arrow points to the right, this red balance will show up in June. When you get paid in June, categorize the inflow to the same budget line item, “Work Expenses – for reimbursement,” and the reimbursement will zero out the carried over amount. This is a great way to make sure that you are paid for all that you lay out for your company….bringing the line item back to zero ensures that. This also works for reimbursement from medical spending accounts or if you are the coordinator for a group gift and several people are reimbursing you for their part.
I hope this helps!!!
I’m so confused. I already performed the no-no and imported my bank account transactions into my YNAB account, spent hours categorizing them and then clicked on the “budget based on last three months expenses” option. My budget says I’ve overspent by $6,000. What do I do? I am in no way even close to being financially savvy and every time I go into my budget and see that $6,000 overspent amount, I want to close it and never open it again. Please help!!
Shelly, now that you have that data there, showing you what you spent historically, I’d do File -> Fresh Start and just start fresh :)