YNAB You Need A Budget

[kentv999]

Disclaimer: New to YNAB, but learning

I fully understand and appreciate the potential advantage of having a full month's buffer from which to live. Traditionally though, I've always wanted to keep my primary outflow device (my checking account) as lean as possible to force me to not overspend (a theory that has failed, btw). If I get extra $$$, I ship it off to a savings account to prevent me from just spending "because it is there".

But my concern is the issue of applying the budget and how the "Available to budget" is computed and displayed. Let's say I Net $5000 / Month, then I darn well better only be budgeting $5000 / Month. But the way the buffer is displayed ("Available to budget") can give me the false impression that I have more money to work with... I just keep budgeting and as long as it says I haven't over budgeted, I should be OK, right? (Let's say I have $5000 as IncomeAvailThisMonth and I've saved up $2000 extra, that would mean I have $7000 in the "Available to budget" field, right? )

What am I missing here? Clearly I should be smart enough and only use that $5000 ("Income for this month"), I understand that. But I am concerned that I'll always be doing the math to see if I'm staying within the "Income for this month" as opposed to "Available to budget".

Guidance here would be appreciated..

-- Kent

[brdami46]

Maybe you could consider keeping some of your funds in an off budget account that will not affect your budget. As additional income arrives, you can apportion it between your budget (in an "on budget" account, and transfer the rest to your a savings account, which would be an "off budget" account.

I would recommend, however, that you do not use this approach until you have established at least a one month buffer.

As a caution note, I am new to YNAB, and so I could be wrong on this. So I am sure that some of the "veterans" will weigh in on your concern.

Bruce

[lautzu]

I just keep budgeting and as long as it says I haven't over budgeted, I should be OK, right? (Let's say I have $5000 as IncomeAvailThisMonth and I've saved up $2000 extra, that would mean I have $7000 in the "Available to budget" field, right? )

It would...until you budget it. Give those $2000 a job just like the first $5000, except this time give them a job like "Savings: Emergency Fund". (You can also make a Buffer category for this purpose, though you'll need to pull the money back out when you switch to Income:Available Next Month) Once they are budgeted, they no longer appear as available to budget, and you won't have that issue.

Another thing you can do to train yourself is hide the balances of your accounts (expand the register/budget/reports panel to the left). The more you go by what the balance is in your category, rather than your account, the more you can break the habit of spending it just because it is there.

[rbk627]

+1 on lautzu's reply. Couldn't have said it better myself!

Ruth