YNAB You Need A Budget

[mclmns]

I just download the YNAB trial last night and it looks to be exactly what I need. Before I started though, I had already created a budget on an excel sheet. Including my expenses and what I thought my income would be for the month (Based on 40 hours a week) But from YNAB I'm gathering that this is wrong? The trouble I'm having is that right now I don't have any money and won't be paid until the 10th. I want to start this off right. Is it best to wait until I get paid then put in the numbers for the two weeks then update it again on the 27th (second pay)? I want to make sure I'm using good habits and not resorting to what I think will work.


Thanks for any advice, Mike

[olafmoriarty]

That's right, Mike. If you budget $ 2000 because you know you'll get paid $ 2000 in ten days, but you don't have the money before that, you have a budget that tells you that you can use money you don't have yet. And that's a pretty tasty recipe for disaster. So until you have a buffer built up so that you can live on last month's paychecks, you should only budget the money you actually have available.

[los lobos marinos]

Hi Mike and welcome to the forum.

I think you've already worked out that YNAB recommends only budgeting from income you have already received but that doesn't mean you are not allowed to spend anything! This is to support users and prevent them from spending money they don't really have and accruing debt, interest and fees. Also, if you were to budget what you have not received and there was a banking error for example causing your income to be delayed then you could find yourself in a bad situation.

My suggestion is this:
Until the tenth don't make any non-essential purchases as you have nothing put away for them yet in budget categories.
Pay all essential bills that are due such as utilities. Make the payment to the correct YNAB budget category and balance them out with an equal budgeted amount.
Pay your mortgage/rent (without meaning to sound silly) if it is due. Make the payment to the correct YNAB budget category and balance them out with an equal budgeted amount.
If you need gas or other transportation costs to/from work then do same thing again. And the same again for groceries.

Other than that try and keep any expenditure to an absolute minimum until the 10th. At that point you can start allocating your received income to budget categories accordingly and transferring over your calculations from your spreadsheet.

I hope this helps.

[Turf_Hacker]

I just download the YNAB trial last night and it looks to be exactly what I need. Before I started though, I had already created a budget on an excel sheet. Including my expenses and what I thought my income would be for the month (Based on 40 hours a week) But from YNAB I'm gathering that this is wrong? The trouble I'm having is that right now I don't have any money and won't be paid until the 10th. I want to start this off right. Is it best to wait until I get paid then put in the numbers for the two weeks then update it again on the 27th (second pay)? I want to make sure I'm using good habits and not resorting to what I think will work.


Thanks for any advice, Mike

If you already have money in the bank (checking/savings accounts), then you do have some money to work with until you get paid. The money you already have in the bank needs to be assigned jobs, not just new money coming in. Go ahead and budget based on your account balances then spend within your category balances. When you get paid on the 10th, enter this income and update your budget accordingly. Your Excel budget may be useful to help guide you in your budget updates, just be sure to only budget what you actually have.

[mclmns]

Ok, Thank you for the help everyone! I will limit my spending to essentials until i get paid. @Turf I literally have no money in the bank until pay day but I think I get the ynab method so hopefully that will change!

[litterbug]

A lot of people start out in your position, with little available to budget or spend. I did, but I got through (only) a week before my next paycheck with austerity but relatively little trouble. You've already gotten that idea, which will make it easier.

Here's what helped me:

1. No discretionary spending, not even so much as a chocolate bar (unless it's medically necessary ). Only enough gas to get by until you get paid. You get the idea.
2. Live out of the pantry and freezer. Buy only necessities: enough gas to get you to your next paycheck, milk and bread, veggies and fruit, and get them at a discount store if you can. Cook meals from scratch. Chili is a favorite good-but-cheap complete meal: brown cheap ground beef and a chopped pepper and onion, and dump in a few cans of generic pinto beans and tomatoes, simmer and top with generic grated cheese and you'll stay nourished.
3. Sell something. Dig in the back of closets and your garage and underprice them to go fast, at least at first, because you need cash fast. That helped pay immediate expenses, get my budget moving and start rainy day funds for foreseeable lumps in the road. You're going to need as much extra as you can get your hands on for the first few months.
4. Negotiate bill deadlines. Utility and phone companies are almost always willing to arrange late or partial payments. The key is to call and ask politely. Your wireless company may do this too, but I wouldn't count on it. Just remember, you're going to have to pay those bills with your next paycheck.

I hope that helps. You're on exactly the right track, so just stay on it and things will get a lot easier very quickly!

[los lobos marinos]

Just to add what litterbug said. If you are able to this month, after allocating your priority budget items from your income and stripping out the non-essentials it may be possible to over=budget certain categories to build-up little buffers or maybe start budgeting a few $$ for rainy day or emergency fund categories to cover the unknowns that may occur.

As far as the chili is concerned, try adding some cumin seeds too straight after you saute the onion & garlic and saute gently for 15/20 seconds with the peppers before adding the meat. Cumin seeds are dead cheap and add a lovely, tangy flavor to the va-va-voom heat.

Home-made tex/mex burgers are great too and really, really cost effective especially now it's summer and BBQ time. They actually cost less per head than the chili.

[mclmns]

Thanks for the good ideas! Chili and mex burgers would be cheap and easy to make. I'm feeling pretty confident in this system. Hopefully it helps me make the transformation I need!

[Malisa]

I'll add another layer...


...you have no money, but potentially you might be spending money. If you have a CC (or more) that you're actively using, start with those balances now and record your spending. Might as well start that habit now. Then when you get money, you can start figuring out how to pay for the stuff you've had to purchase when you had no money (No judging, BTW...this was me when I first started...literally digging through jackets and couch cushions...and using CC's that were pretty much maxed.)

And if you DON'T have CC's, well, good on you.

[mclmns]

Thanks Malisa, i think i have a good budget made out after looking at my previous bank statements. Only have a little bit on credit cards, most of my debt is on my student line of credit. Lower interest rate but still a pain :/. I should be able to stretch myself until next pay, with credit cards as a last resort.