YNAB You Need A Budget

[weareconqueringmoney]

So I bought YNAB last year, and just started using it again in earnest in March. I've been having trouble wrapping my head about the zero-based budgeting approach, but I think I may have found a way to finally address it (for me and my little pea-brain), and wanted to see if others might think I'm doing it right.

Since we don't have a buffer (yet) and are still paycheck to paycheck, I have decided only to budget for each week. My husband and I both get paid bi-weekly, on alternating weeks. So, when my paycheck comes in on a Friday, I budget for the week, anticipating irregular expenses and accounting for small expenses throughout. Whatever is left over, instead of leaving it in the checking account, I have been moving it to our savings account to help accumulate our buffer.

It might seem simple, but I never did this before. I would just leave the "leftover" money in the checking account, and whenever some want came up, I would say, "Oh yeah, we have $x in checking so we can do that." And then, inevitably, some unexpected thing would come up and we'd be jumping onto the credit card to do it.

Has that worked for anyone else, as far as setting parameters for yourself?

[Joel]

What you are doing will work.

The biggest switch to make with YNAB is to make spending decisions based on your category balances, and not on your account balances.

You don't necessarily have to move that money to your savings account, but rather create a buffer category, and build money up in that category. or whatever other category may need money first.

[Will]

By budgeting only the money you have each week, you are doing it exactly right. The issue that comes up with moving the money from the checking to savings is more with the mindset that you spend based on your account balance instead of your category balance. If you only spend based on what you have budgeted, all you need to do is look to see how much is in that category. When a "want" comes up, is it budgeted for? If yes, then fine, buy whatever. If not, you either wait until it is budgeted for or you "whack a mole." Same for the unexpected things, but with YNAB you have the chance to budget before them because most everything that is unexpected isn't 100% unexpected. Whether the money is in the checking account or savings is irrelevant.

[gileslewis]

hi weareconqueringmoney
Well done on using some money software to get a handle on your finances
Sounds like you are doing the right thing to me.
I agree with the idea of looking at the category balances in your budget, but I also like the saving (or any other account for that matter) where I can "hide" the buffer/savings so that the pressure of living on the budget in the current/checking account keeps me on track.
Keep it up
Cheers
Giles

[litterbug]

I was distracted by having money left over, even though the bottom line in the budget page calls the left-over money my "buffer" for next month. It looked too much like I had extra, when I really did want to be saving up for the buffer. Rather than take it out of my budget, however, I just went the pre-YNAB3 way and created a Buffer category. Somehow, that teeny act of budgeting money toward my buffer made me more protective of it and kept me out of that "yeah, whatever" feeling about having extra money.