YNAB You Need A Budget

[Konnor]

Just started using the software and it looks very nice, if a little daunting.

Wondered if anyone could chime in on these queries....

- I get paid on the 25th of each month. I have my bills come out on the 25th and will spend in the days before the next calender month starts. How am to continue working on a 25th -> 25th month when the software seems to only use calender months?

- I have added a scheduled transaction for Income: Available next month starting on the 25/06/2012. When I go to budget, for July I see '+ 0.00 Income for this month'. Shouldn't I be seeing my scheduled income? Along the same lines I've put my starting balance as Income: Available next month on the 25/05/2012 and have 0 shown in the budget for June.

That will probably do for starters.

Many thanks,

[Malisa]

Welcome. If you'll be using your pay that you receive on the 25th before the 1st of the following month, then you should be categorizing it as Income: Available This Month. Or, you can figure out what you need to use between the 25th and the end of the month and do a split categorizing that portion This Month and the balance as Next Month. Either way will work equally well, it's just which is more palatable to you. Any money made available THIS month and budgeted this month will roll forward within the category budgeted, so you can still budget from 25th to 25th, no problem. Just use the real dates you spend, some of which will be during the month you earn and budget the money and some will be in the following. There are other alternatives as well, but I'll start you with these. Post back questions or comments.

Again, you can only use Income Available NEXT month if you don't need to use the money until next month.

[Budget_Ninja]

- I get paid on the 25th of each month. I have my bills come out on the 25th and will spend in the days before the next calender month starts. How am to continue working on a 25th -> 25th month when the software seems to only use calender months?

There are several ways you could do this. Here is one way...

Assuming your not buffered:
Make the income from the 25 available THIS MONTH.
Allocate SOME income to budget categories. The ones your going to spend from.
Let THE REST of the income roll over to next month.
Allocate THE REST of the income to budget categories your going to spend form next month.

Assuming your are buffered:
Make the income from the 25 available NEXT MONTH.
Allocate ALL the income to budget categories for spending for ALL of next month.
Since you already have all the cash you need for this month, there is no need to make any cash from the 25th paycheck available this month.

- I have added a scheduled transaction for Income: Available next month starting on the 25/06/2012. When I go to budget, for July I see '+ 0.00 Income for this month'. Shouldn't I be seeing my scheduled income?

No, the transaction hasn't happened yet. You will need to wait for something to ACTUALLY happen before it affects your budget, both income and expenses. You only want to budget the money you HAVE, not the money you think your going to have.

[Konnor]

- I get paid on the 25th of each month. I have my bills come out on the 25th and will spend in the days before the next calender month starts. How am to continue working on a 25th -> 25th month when the software seems to only use calender months?

There are several ways you could do this. Here is one way...

Assuming your not buffered:
Make the income from the 25 available THIS MONTH.
Allocate SOME income to budget categories. The ones your going to spend from.
Let THE REST of the income roll over to next month.
Allocate THE REST of the income to budget categories your going to spend form next month.

Assuming your are buffered:
Make the income from the 25 available NEXT MONTH.
Allocate ALL the income to budget categories for spending for ALL of next month.
Since you already have all the cash you need for this month, there is no need to make any cash from the 25th paycheck available this month.

Brain is a little frazzled and I might be overcomplicating things!

What does it mean to be 'buffered'?

Your second explanation I think fits the mindset I have, I.e. that all my income that comes in on the 25th is available next month, and that income is also to be used from the 25th -> 1st of that next month.

- I have added a scheduled transaction for Income: Available next month starting on the 25/06/2012. When I go to budget, for July I see '+ 0.00 Income for this month'. Shouldn't I be seeing my scheduled income?

No, the transaction hasn't happened yet. You will need to wait for something to ACTUALLY happen before it affects your budget, both income and expenses. You only want to budget the money you HAVE, not the money you think your going to have.

Okay, although I have an 'Income: Available next month' transaction (first entry) dated 25/05/12. On the budget screen that is all showing as 'Your Starting YNAB Buffer' with 0.00 on 'Income for this month' in June.

Seems odd that you can't see regular income transactions (e.g. representing a monthly salary) for future months? I have a mortgage starting in August, and would like to see how it affects my budget. Wouldn't income need to be shown for me to do this?

Many thanks!

[Budget_Ninja]

Buffered means that you have all the money you need this month, for spending next month. Or stated another way. If I didn't get paid a single penny next month, I would still have all the money I need to get me thru all my anticipated expenses next month.

...I assume you get paid monthly. So initially all the income you get on the 25 would be made available this month 25th-->1st, then you would hold some over to be used 1st --> 31st. Now its possible you won't be able to do that at first. So at a minimum the hold over amount should get you 1st --> 25th. But try and stretch it as far as you can. The goal would be to take the income that you get on the 25th and not need any of it until the 1st.



Yes, odd when first coming to YNAB from 'somewhere else'. But its fundamental to the software to only plan to spend the money you have. There is a real shift in how you approach a YNAB system of managing your finances and how a tradition Budget works. The YNAB method helps manage you decisions in real time against your plan. It's a great exercise at first to see how close to the edge you really are when you first start in YNAB. We were so much closer to the edge than we thought, it was kind of scary. It's like a doomsday scenario at first.... If the income stopped right now, how much longer could you survive financially? Then from that baseline work towards improvement. I used MS Money, Quicken and GNU Cash before, and for budget/money management YNAB has them beat hands down. A lot of the financial improvements we have seen in 1 year were made in no small part because of the software, of course you need to want to make some changes too - YNAB is a great facilitator of spending and money management decisions.

[Budget_Ninja]

I have a mortgage starting in August, and would like to see how it affects my budget. Wouldn't income need to be shown for me to do this?

Here is how you would handle this in YNAB.

You start YNAB in June.
You create categories for the expenses you expect to have and savings you want to keep.
You account for all your money and give all of it a job by assigning it to the categories you created.
You get paid in June and allocate all the dollars you get to jobs.
---Build balance in categories that occur less frequently (insurance, property taxes, car replacement)
...
You get paid in July and because your buffered you don't need any of that money in July, so you send it to August.
You allocate a portion to your mortgage and dole the rest out to other Jobs/Categories
You may find you have to dole less to some categories if the mortgage expense is higher than say your rent expense used to be.


Now you say - but I really want to forecast it Budget_Ninja.
Ok, ok. But I strongly suggest you don't do it in your working copy of YNAB.
Create a second copy and forecast your heart out. There are several threads on how to accomplish this but a quick way would be to add the expected income to a 'Unearned Income' Account which is On Budget instead of leaving it in the schedule.