We had the best of intentions, honestly.
Our day of budgeting is usually the evening of the first Sunday of every month. If it falls on the 5th or 6th or whatever, I don’t sweat it. We’ll get it done.
Except Sunday, April 1st, where we didn’t.
I’m not sure what happened. It just slipped through the cracks of what was probably an abnormally-busy Sunday. The next Sunday was busier than normal because we had family come in to town for a few days. Then the kids’ spring break happened and we took off for the week. And then the county convention happened that Saturday (I’m a delegate)…and Sunday felt like we were just playing catchup. No time to budget then. The next week I was out of town, which meant Sunday was—again—fairly busy.
And honestly, at that point I’m kind of thinking, “Well heck, we’re halfway through…”
So, one thing led to another, I was out of town again over a weekend and April escaped without having any dollars assigned their jobs (Rule One, folks).
We did out May budget last night. I feel a LOT better.
I think this is the second time in over nine years where a month has escaped our budgeting wrath.
Some lessons learned:
- It wasn’t the end of the world. The most important part about missing April? Making sure we got May. We’re 109 out of 111 months. That’s not too shabby. Especially if this were baseball instead of budgeting.
- Your spending can slide in an instant. Some stuff’s predictable. For instance, our food budget, even though we fed family that came into town, was actually six percent less than the prior month. That’s a normal variation for us, and not something I worry about. But our slushy, put-random-stuff-here category? That was up 108% from the prior month, and up 75% from the 2012 average.
Lesson #3 is important. We have the slushy “miscellaneous” category for things that 1) we didn’t anticipate or 2) don’t care to track too closely. Think about that for a second. As soon as we don’t have a budget to work from, spending increases in the area where we haven’t cared to “track too closely.” Out of habit we stuck to the norms in most of our categories, and out of habit we didn’t really care what was in the miscellaneous category, so it naturally grew.
If we let our budget be shelved for a few months, the following would have happened:
- More and more categories would have been sucked into that black hole of thinking where we don’t care to track it.
- The category (misc. in our case) where we already stuck stuff we “didn’t care about” would have metastasized.
- The categories from #1 would have slowly begun to increase in spending, just as the miscellaneous category did.
If you want to make sure your spending is aligned with your values, plan it, and track it. If you want your spending to take on a life independent of your values, don’t.
If you missed a month, start again. We did!
It happens. Glad it didn’t destroy you, and glad you hopped back on board… the only question I have is, how do you keep entering stuff into YNAB and not review the budget throughout the month? Playing catch-up sucks but I find if you prioritize the important things (budgeting?) the rest of the crap we call life will still be there for you to deal with. Not everything is a 4-alarm time-sensitive fire. As you know, many things can wait.
Hey Jesse,
Love the honesty. You don’t just build great budget tools – you’re also a great leader.
Question —- How involved in the budget is your Significant Other? What does “sit down and do the budget” look like for the both of you? Do you do most of the leg work and then you present it to her and ask for her input? Or do you work on it in one sitting together?
So far, I’ve been doing most of the work and my SO has been happy to do her best to not overspend on her categories (mostly grocery shopping). And she is more than happy to look over YNAB with me but doesn’t “enjoy” it as much as I do.
:)
What you describe is pretty much how Julie and I work it :) our big priorities don’t change much so she’s concerned primarily with clothing/groceries.
I haven’t budgeted for May! It’s almost mid-month. Anyway, I like to sit down over the weekend to consolidate my receipts and make sure that all my accounts are balanced. However, I seem to be missing some amount. I’m really not sure where they went to or if I had just forgotten to key them in.
I am cynical enough to believe you didn’t miss a month. You just were trying to make a point. That’s ok. But you gave the impression that your input to YNAB was only once a month. Surely all users should be urged to input daily. I do. Love your product which has given me control over my spending. But have I missed something here?
I input spending in my phone right after I spend money and I use the Scheduler to enter automatic transactions that recur regularly. Then once per month I import our data, balance things, an set the budget.
And we did miss April.
I have to say, that this doesn’t make sense to me at all. What you are describing would drive me crazy. For instance, when I’m shopping for something, I have to know how much is left in the category before spending money on it. Almost like a virtual envelope. The way you do it seems like it would be a crap shoot at the end of the month.
Maybe I’m misunderstanding something about what you are describing…
I think the method he describes (which I would switch to if I had a phone that was funner to work with) is:
– track spending as it comes—categories are always up-to-date, so you always know how much is left
– at the end of the month, make sure you didn’t miss anything from your bank account, and set a budget for next month.
I usually track spending once a week by importing, but that means that I am less likely to use the Budget to make spending decisions, because it is a few days out of date.
When there is wiggle room, you can consolidate stuff like cash expenses. But only if there’s wiggle room in the budget. I would NOT do this of things were super right.
Good to know you caught up with things again. I would be terrified if I missed a month! But, as you say, it’s not the end of the world.
My question is: what’s the difference between a slush fund in YNAB and and emergency categories?
Slush find meaning its a catchall category for things don’t have a specific home. It’s probably not an accurate term to use.
Thank you for this. I’m kinda new but I’ve let two months slide by. I know, I’m a slug. And I’m a bit over-whelmed…, again to get back in there with my budget. I’m gotta try and jump in today. Here I goooo!
So glad you posted this. I fell off the wagon too and was tempted to consider myself a failure and give up (it’s only month five for me). You reminded me that creating the good habits of knowing what I want to spend in most categories is a good idea. Back to the software, today!
Jesse, I’m just wondering how much time you have allocated to go over the budget stuff in a given month. Being a father with 4 kids and a SAHW, I fully understand the ability to loose track of even a smidgen of time, LOL.
The reason that I ask, is that I am trying to design my budgeting, so that I can let 3-6 months go by without having to check up on it. You know, a self-contained entity that just works like a “black box”, and doesn’t require checking up on that often.
I think budgets need to be checked on very often when you’re first starting–even daily if you have some spending that isn’t aligned with your goals that needs to be ironed out–and at least monthly once your spending I dialed in.
Things change too much to be able to make a budget that’s reliable six months later.
I agree that starting out one needs to check the budget often to get a feel for what categories and category amounts need to be budgeted. Further, checking every 3-6 months does not seem like a viable approach. I can’t stress how much I personally disagree with that.
This is off-topic, but could you make your live events available on-demand? I can’t adjust my schedule for webcasts at a certain time.
We hate that miscellaneous category! We do try to track it, but it’s almost impossible to know what one-offs are going to come up that don’t fit anywhere else.
Out of my depth here since I’m struggling with initiating my budget, but I would think that perhaps having a couple different miscellaneous categories could help – for example you may create a large miscellaneous (say more than $50), mid ($10 to $50) and small miscellaneous for the rest. Then you keep track of the trend in a larger period of time (being miscellaneous, the monthly trend may not be too important, but quarterly or half yearly perhaps will tell you of a pattern of expenses that end up in the miscellaneous category that you may want to start tracking more closely).
In the end, you must get to the point where you can use an 80/20 approach (track closely the 20 percent of items that comprise 80% of your expenses and track loosely the 80% of items that comprise the remaining 20% of your expenses); at the beginning you may have to invest a lot of time to iron things out in the small items group, but after a while, you should only focus on the big swingers first and then monitor that the small potatoes stay within a control range.
Dunno, just a thought. I’ll let you know how I fare in my efforts…
The 80/20 rule definitely applies to budgeting. The probably is a whole separate post!
Hi Jess
I am in the same shoes as you were in April . Except it’s been sliding for 3 months as we are returning home after living abroad for a few years. So I am debating. Do I start clean or do I try to redress the old budget? Advice?
Do whatever will take less time :)
Agreed. I fell off months ago and need to get back on. For me, it’s a full reset that’s faster.
My wife and I went for about 6 months without a budget recently. This was after doing it for about 4 years consistently. For the first couple of months, it was really troublesome to me. I felt like a ship with sails raised and no rudder. By the third or fourth month, I started thinking “hey, we got this”.
You are right Jesse- habit really came into play. We bought a lot of miscellaneous stuff. I feel like it was a total disaster because of the black hole effect you described.
Our buffer basically disappeared too! That’s what bothers me the most. My guide became the balance in checking. I felt like I was checking if my car was out of fuel! Not a good feeling.
The other problem: my wife is in the habit of just spending money now. We finally sat down a week ago and started fresh for May. I just opened up our bank account online and noticed random purchases. So, even though we have the budget, we have to fix our habits.
So, you just filled in your spending from your bank info after the fact? I can see doing this, but I’ve fallen off the wagon big time for the past few months. Im not sure how to start again, especially since I now have a lot of payments set up online, so it’s not as clear cut what my balances are as it was when i began a few years ago. How to I hop back on? Should i just get onto one of your beginners webinars? Thanks!
Just star fresh if you’ve skipped a few months. Don’t try an rebuild tons of months.
Glad you’re back on budget, I find a parallel in menu/meal planning. If I walk through the door without knowing what I’ll make for dinner…perhaps forgot to take something out of the freezer, I’m much more amenable to going out for dinner. That’s a black hole here, so expensive for the 4 of us. Much better to counter the suggestion for dinner out is ah…have Paella prepped, nearly table ready for example. I’m finding the restaurants are using more ‘convenience’ full of chemicals packaged foods with less made from scratch on site that depends on chef’s skills.
Since you already have your His and Hers, I’m surprised that you have a “misc” area at all. One of the first rules of organization is NEVER have a miscellaneous file. I’ve found that if I have to find a category for something it makes me more aware of how I’m using my money. I actually found that most of what I might consider miscellaneous fit more accurately in “gifts” for my children and grandchildren.
Jesse,
Thank you so much for posting this today! I too have missed March and April due to some fluctuations in income and expenses. Didn’t quite know how to approach it – so I procrastinated and did nothing…
You inspired me today and this morning I did a fresh start and I am caught up with my May budget now!
Thank you so much!
Angie
Really glad you shared!
We’ve been using YNAB since December; sure beats Quicken!
The challenge we face is that my husband EARNS money regularly, but doesn’t get PAID regularly. That makes budgeting a real challenge. I’ll have to confess, we’ve been “over budgeted” since February (when he got almost no checks), simply because those “routine bills” (mortgage, utilities, health insurance, etc) still come due, and we still have to eat and buy gas for the car whether he gets a pay check or not.
The “over budget” amount has gotten significantly smaller each month. I always pay our tithe and offerings as soon as we get a check, and turn it in to the church the next week, no matter what the rest of the budget looks like. Since he is self-employed, I have also been faithfully “budgeting” 20% of every check he receives for those inevitable “quarterly taxes” that ALSO come due regardless of paychecks.
God is so good! Even when we haven’t gotten a check for a while, He has stretched that “taxes” buffer so that it has kept us from drawing on our “line of credit” loan — except for one March paycheck, when I entered the transfer from the business account to our personal checking account IN YNAB, but forgot to make the actual physical transfer at the bank. NOT a good idea! I rectified my mistake and paid the loan off as soon as I realized what I’d (forgotten to) do. (My debit card was refused, and I “knew” I had plenty of money in the bank to more than cover the small purchase [about $15] I was making. According to YNAB, I had plenty of money. According to the bank, it was in the wrong account. Oops!)
Budgeting is a challenge when you never know when you’re going to get another check, or how much it will be for! (“Earned” money isn’t very helpful until it actually makes it to your checking account.) We would be a WHOLE lot worse off if we were still using Quicken instead of YNAB, though! For the first time in I-don’t-know-how-many YEARS, our checking account is not “down to the last penny. In fact, it is consistently (well, when I remember to actually transfer the money) actually staying over the bank’s minimum balance required to avoid that $5.00 “account fee” each month.
At this point, I know what I need to budget, but (other than tithe, taxes, and fixed expenses) I tend to budget more “after the fact,” just enough to keep the red numbers at bay, and I try to spend the absolute minimum on everything. We’re working towards a buffer, but it isn’t happening very fast.
(And, in reference to an earlier post, I do most of the numbers; my husband looks it over periodically.)
Thanks, Jesse, for a great product!
How do you start fresh if you’ve missed a few months? We’re preparing for a new baby and the last two months have kinda slipped by… I entered a lot of the spending on my phone, but not all of it so I have a big box of receipts that is rather intimidating. Since the baby will be here any time now (!), I anticipate that it may be another month or two before I really get back in the habit of budgeting.
Since YNAB looks at what you input in the last month, how do I start fresh? I’d rather not delete the information that did make it in – but I don’t want to be constantly under or over budget in certain categories based on what I did three months ago!
If you open YNAB and select make a fresh start under File tab then you begin fresh. I would do this instead of going back 3 months. What if you were to create a new budget in YNAB?… that way maybe your old budget stays there to refer back to but a new budget could get you going back on track. I guess you could also import all of your transactions and categorize them. I’m a huge fan of the phone app so that I don’t have to keep all those dang receipts. I’m pretty new to YNAB so take my advice or leave it. What helped me out was taking a couple of the webinars to get me going in the right direction.
Wow, you and I have different ways of keeping up our budget. I update the budget every other day or so; spend about 5 minutes each time. I have to though. One income is from unemployment, and we have half remodeled house to finish before our first kid comes in Sept. Every dollar has a job, and we get in trouble if one does the job of another (or if two dollars is doing the job of one!) Our budget is on a super tight leash at the moment.
When the budget is tight the frequency of checking and updating MUST increase. That’s a great point.
Thanks for the input … I liked the statement saying that you were keeping track to make sure your spending matched “your values” It is a matter of integrity and character to make sure your money “tool” does what you want it too for your good and for the good fo the family.
Great tool, great advice,
RBingham
I feel better knowing that it happens to other people. Even you! And that I am a not such a loser for slipping. I have just gotten on board with a budget again and I am working an envelope system as well (doing Dave Ramsey’s Financial Peace University at the same time as the YNAB) and I really feel differently now. Like my life is better under control. I have a “blow money” envelope that I can spend without guilt. I was able to give my daughter a raise on her chores. Things seem better. But thank you for showing us that even the professionals mess up sometimes. It makes us beginners feel like it can still work even if we mess up too.
We keep a bunch of envelopes with cash broken out for various day to day expenses like food, clothes, family activities, school expenses, etc. We fund them weekly, and stop spending when the envelope is empty. It’s AMAZING how much we overspend when I don’t make time to allocate cash to the envelopes on a given week and we fall back to the debit cards instead. What’s even more amazing, though, is how blissfully unaware of how much we’re overspending. I mean, we know we’re probably a bit over, but it’s always a shocker by how MUCH.
Anyway, thanks for the honest post. I agree with moving on instead of making a war over it. Learn from it and try not to repeat the mistakes.
I agree with your envelopes. The debit card is not my friend when it comes to groceries, eating out, etc… I ALWAYS overspend, unfortunatly even with a budget I’ve set. However, cash in the envelope along with YNAB has really helped. If it isn’t in the envelope, I don’t have any money to spend. Period.
I know what it’s like to try and play catch up. It can be a real hassle to find and track those few remaining transactions. Trust me it is often more pain than it is worth. Start fresh (using YNAB 3′s “start fresh” option), it saves your categories and accounts. Start by tracking from May 1st. When you have a new baby, it can be a real challenge to predict expenditures. Go with what you know and roll with the rest. Also, if this is your first baby, there are cheaper ways to do things–buying furniture, toys, etc. second hand (heaps cheaper), not buying into gimmicks, etc. After our first, I looked back and realized how much money we didn’t need to spend. It also wouldn’t have affected our son to spend less, have less, “need” less. I often find that less is really more.
Cheers,
Jonathan
Budgeting is really important to me right now. I have been unemployed for 2.4 years, my unemployment benefit has run out, and my Social Security is just about enough to make the house payment and utilities. I have pretty much put all my credit card payments on hold, as there is nothing left with which to pay them. A monthly buffer? Fuhgeddaboudit. But at least with YNAB I can keep track of what is left, and make sure the utilities aren’t turned off. So that’s good. It beats wondering if there is enough at the end of the month to pay the gas bill.
This is a great post. And it reminded me of where I’m having trouble in my budget. I admit that I’ve been using YNAB as more of a tracking program than a budgeting program. I have many small sub-categories that help me quickly see from the reports where our money is spent (i.e. school supplies, gardening supplies, or gifts). I love the detail on the reports end of it, but on the budgeting/planning end, it is difficult for me to predict which of these little categories I will be spendng from in that month (i.e. my kids may announce they need something for school in the next couple of days, or we decide suddenly mid-month to do an extra gardeing project). I don’t have enough money every month to put something in every one of these categories. So I saw that you mentioned your “slushy, put-random-stuff-here category” is the one that went up when you did not budget. And I thought I would ask if is just one general category or if you have lots of little categories too? And how do you go about budgeting that stuff? Thanks! And I do love your program. I’ve been using it for several years and have been so glad to have it!!
When I’m in this situation I tend to download all transaction info I have. Code does ones and budget the incoming money appropriately to cover for the k own expences and then enter a correcting post into my ‘other’ category and leave at that and then start afresh from today.
I’m super proactive about budgeting when I’ve got a system, but during a recent unemployment my system fell apart and we went without a budget for six months when we really needed to have one. Now that I’m back on track, I take extra precautions to make sure the budget happens before the month starts. Our income comes every other week and we are fully putting it all to next month’s expenses. I have anywhere from 1-13 days before the month starts when I have all the income for that month. I just do my budget at that time. Even with a recent move throwing some categories off, we do stay pretty stable. Almost all category budget amounts are carried over from the previous month. Another thing that helps us immensely is when we started using YNAB, we made up a yearly budget which we keep in a spreadsheet. This has all the amounts we need for various categories over a year’s time. Having a yearly budget has helped us identify and stick to planning things that are a large ($100+) that come only once or twice a year. I’ve also minimized slush spending by renaming the miscellaneous category “Household supplies”. Anything else must be categorized and forcing me to categorize helps me to slow down and consider if I really need a purchase.
I use YNAB differently from most people. I don’t use it to budget, but rather to track overall how much I spend and how much I earned month per month.
I track immediately expenses higher than $1,000 in their appropriate category, and I track the others at the end of the month all in one entry under “Misc” (I basically do MoneyYnabThinksIHave – MoneyIHave = MoneySpentInMisc).
However maybe I am doing it wrong? After reading the posts here I feel I am missing out on the biggest advantage of YNAB.. But again, is budgeting really useful for high-income low-spending individuals like myself? I wouldn’t know what to do to spend my entire paycheck so why not spend the little money I do spend without fussing over it?