YNAB You Need A Budget

[Mudie]

Steve! Dude! That makes sense now...duh. I took out what I had in April for the buffer as a negative amount. I added the ESP as supplemental in May. I then budgeted the 'left over' few bucks to the FFEF (Fully Funded Emergency Fund-not sure how many non-Dave Ramsey fans are here) and the budget is $0. As a proud Nerd this makes me happy indeed. I also see that next month I have the check that I got last week available to budget next month! This really is bliss, added to the DR stuff I know!!

Thanks YNAB!

That's awesome Jim, I'm really happy for you.

Life is good and you're right, Thank you YNAB and...

Jesse!

[domino]

Either method of pulling out your buffer will achieve the same result, but I prefer the negative budgeting method because it doesn't show an expense - which otherwise will skew your report data.

Jim, congrats on getting to rule #1. It really does allow you to become more proactive with the entire budgeting process. Good stuff.

[trevorscarfo]

I've been using YNAB for a few months now, I've been very diligent in reconciling my bank accounts, and I've finally finished saving up my buffer to complete Rule #1. Now I'm confused...

My monthly income is $3500. I currently have $4641.61 in my checking account, and $3015.54 in my buffer. It seems that there is something fundamentally wrong with these numbers. Should there be a relationship between my checking account balance, my buffer, and my monthly income, and if so, what is this relationship?

[domino]

I've been using YNAB for a few months now, I've been very diligent in reconciling my bank accounts, and I've finally finished saving up my buffer to complete Rule #1. Now I'm confused...

My monthly income is $3500. I currently have $4641.61 in my checking account, and $3015.54 in my buffer. It seems that there is something fundamentally wrong with these numbers. Should there be a relationship between my checking account balance, my buffer, and my monthly income, and if so, what is this relationship?

If the only account that you track in Pro is your checking account then ideally it should equal your month's balance on the budget tab. The month's balance is the sum of all the balances in the budget categories. So if you have a buffer balance of $3015.54, then the rest of the category balances should add up be $4641.61 - $3015.54 = $1626.07.

[WairereRose]

There is a formula - the three of those don't tie exactly, but your accounts should balance with the balance in the budget. Follow the link in my signature to the Library of help threads, and one of those will give you the formula.

Rose

[trevorscarfo]

Thank you for your replies. I've read so many posts and I'm still confused... and a bit frustrated. I'll try explaining my situation differently...

It's the end of May. I've completed all my spending for the month of May, and I'm ready to roll forward to my June budget. My monthly income for June will be $3500. I currently have $4641.61 in the bank. It seems to me that if I'm not going to be spending any more money in May and my May budget is balanced at $0, then I should have a buffer of $4641.61 ready to roll over to June (I would then zero out the buffer).

So far so good??? Or is this assumption wrong? If it is wrong, I don't understand the logic and I would really love it if somebody would explain it to me.

So now here I sit. I feel like I SHOULD have a buffer of $4641.61, however my ACTUAL buffer is only $3015.54. This is what I don't understand.

[WairereRose]

Thank you for your replies. I've read so many posts and I'm still confused... and a bit frustrated. I'll try explaining my situation differently...

It's the end of May. I've completed all my spending for the month of May, and I'm ready to roll forward to my June budget. My monthly income for June will be $3500. I currently have $4641.61 in the bank. It seems to me that if I'm not going to be spending any more money in May and my May budget is balanced at $0, then I should have a buffer of $4641.61 ready to roll over to June (I would then zero out the buffer).

So far so good??? Or is this assumption wrong? If it is wrong, I don't understand the logic and I would really love it if somebody would explain it to me.

So now here I sit. I feel like I SHOULD have a buffer of $4641.61, however my ACTUAL buffer is only $3015.54. This is what I don't understand.

Do any of your other categories have balances in them? If you have put aside some for the property taxes due later in the year, or some for the insurance, or some for extra food when the in-laws come to visit next month, or ... anything, then that money will also be in your bank account, but it won't be showing in your buffer.

So your category balances (at the top of the right hand column on the budget page) if all your spending is done and all transactions are cleared with the bank, should equal your bank balance UNLESS you have any categories that ended the month in the red.

I think this is an area someone else will have to step in and help you with. I can deal with it when I see the numbers, but in the abstract my brain heads south (which admittedly from here isn't all that far, but it's pretty chilly).



I think I'll sneak quietly out the side door now...

[Mudie]

Do any of your other categories have balances in them?

Rose's first line says it all. If you have budgeted aside money that has yet to be actually spent such as savings for upcoming car insurance or other rainy day type funds then that is why your bank account balance is higher than your buffer category balance.

If you don't have any money budgeted aside for other things then indeed, you should have enough to fully fund your buffer and start out that way on June 1st.

Does this help clear it up for you?

Steve

[trevorscarfo]

Thank you two for your help. I was not able to resolve my problem, but I am confident that my bank balance is where I need it to be to complete my Rule #1. I'm going to start a new budget from scratch for the month of June, with my Opening Balances as of May 31. Wish me luck, and keep up the great work.

Cheers.

[WairereRose]

Good luck! Sometimes starting over is the cleanest way to do it.

[jhawkrulz]

I also was having trouble grasping the buffer and how to start. I've got a buffer already saved up and wanted to start June with YNAB. While Domino's system would've worked too here is what I did -- and tell me if I've messed up my line of thinking somewhere.

I made an entry in the register of each account for the balance of the account on May 30. I marked them income:primary (so they'd go for the June budget). For checking and savings I marked these as inflows. For credit cards I marked them as outflows. Then I repeated the same transaction in each register with no category (so it wouldn't affect the budget)- checking and savings marked as outflows and CC's marked as inflows. These two registry entries in essence cancel each other out so the balance in my accounts are accurate, but allows me access to my funds in the June budget.

I hope this isn't too confusing and makes sense. I've been trying to figure out for awhile how to get started and seems like this will get me going for this month.

BTW, I've been reading the forum and watching tutorials for over a month now trying to get started. I truly appreciate all the wonderful info available on the forum.

Eric

[jafa]

I made an entry in the register of each account for the balance of the account on May 30. I marked them income:primary (so they'd go for the June budget). For checking and savings I marked these as inflows. For credit cards I marked them as outflows.

This sounds good!

Then I repeated the same transaction in each register with no category (so it wouldn't affect the budget)- checking and savings marked as outflows and CC's marked as inflows. These two registry entries in essence cancel each other out so the balance in my accounts are accurate, but allows me access to my funds in the June budget.

Now you've lost me. If I'm reading this right (and maybe I'm not!) wouldn't this mean you have $0 balance for each account tab to start out June?

You do want to enter starting balances (doing them on May 30 marked Primary would work, or you could do them for June 1 marked Supplementary). Then you'd want to switch to the budget tab and budget out all the available money for June so that the Available = 0. But your account balances should still reflect the balances in your accounts...

Please let me know if that helps, or if I'm confused. Thanks!

[rdeleo]

I'm new to YNAB and plan on starting YNAB tomorrow, July 1st. Being that today is June 30th, all my June bills have been paid already. I have a bank balance of about $5,000. My expenses each month are well below $5,000. My plan is to enter my account balances into my registries as supplemental inflows on July 1st, making them available for the month of July. All my income that comes in to July will be primary, making them available in August. Since I have the money upfront to pay my July bills, isn't this essentially the same as a buffer? Or should I enter the account balances today, June 30th, as primary, making them available for July. Does this make any sense? I think by having the money up front to pay a full month of bills, I essentially have a buffer, but my actual buffer category equals zero. Any ideas?

Newbie a little confused with the buffer concept -
Ryan

[Patzer]

I'm new to YNAB and plan on starting YNAB tomorrow, July 1st. Being that today is June 30th, all my June bills have been paid already. I have a bank balance of about $5,000. My expenses each month are well below $5,000. My plan is to enter my account balances into my registries as supplemental inflows on July 1st, making them available for the month of July. All my income that comes in to July will be primary, making them available in August. Since I have the money upfront to pay my July bills, isn't this essentially the same as a buffer? Or should I enter the account balances today, June 30th, as primary, making them available for July. Does this make any sense? I think by having the money up front to pay a full month of bills, I essentially have a buffer, but my actual buffer category equals zero.

That's right. It actually doesn't matter whether you enter your account balances on July 1 as Supplemental Income or on June 30 as Primary Income; you end up with the same amount of Available to budget in July by either method.

You are in a good position with more money than you need to pay your July expenses. This will let you allocate the excess to categories that you don't have to pay in July, but which need to be saved for. Typical categories like this might be clothing, car insurance, car repairs, property t.ax (if not part of your mortgage payment), Christmas, and so on. The next big push for many people after getting to where they can live in compliance with Rule 1 is getting to where they can fund things like this with a regular amount budgeted per month.

If it turns out that you still have Available left after budgeting everything you need to spend in July and allocating as much as you need to for categories that have infrequent outflows, congratulations! You can start budgeting excess dollars to the savings vehicle of your choice.

Patzer

[Sairey724Gamp]

If you'd like, simply rename that Buffer category to something else so you don't have to forever track a 0-balance category. Once you are operating on Primary Income, you don't need the Buffer as a separate category (never in your case) . Congratuations on starting YNAB in such solid financial position. Keep us posted on your progress.
Sairey