We discuss this all the time, because the way you choose to address those priorities is exactly what makes YNAB yours. As you’ve already understood, YNAB is a flexible tool, so you can approach the problem a myriad of ways. Some also use YNAB to implement specific personal finance systems like Dave Ramsey’s program or the concepts in Elizabeth Warren’s “All Your Worth.” I’ve cobbled together my own way, so I’ll tell you how I’ve handled it. It’s a long post, but maybe some of it will help you think about it.
First of all, though, congratulations on getting a quick buffer! It’ll make planning more straightforward, although you’ll still go through the exercise of figuring out how to prioritize your regular spending so it supports your goals. A buffer is largely a convenience, allowing you to budget at the start of the month instead of by pay period. But monthly budgetin can make it easier to see where money leaks from the budget, where you can cut spending without pain, and areas you thought were problems but aren’t.
To me, your #1 and #2 are what I think of as reserves. They’re not really rainy day funds, because if you plan for them, all they are is regular old expenses. Even car repairs and those big vet bills I know will come when my 19 year old cat finally starts getting sickly are predictable; all I don’t know is when and exactly how much, so my targets are pretty substantial for both. I never knew how much energy I put into worrying about these things until the anxiety lifted as soon as I set up those categories and knew I could handle them. I still call them rainy day funds because that’s our usual terminology, though.
#3: I have a $1000 mini e-fund, but I didn’t create that until I had substantial reserves and a buffer because budgeting biweekly drove me nuts. And because I had significant savings in #1 and 2, I feel much less vulnerable to the things that routinely threw me off. In adire emergency I could break my buffer, because the buffer is really a convenience, not savings. That’s my approach, anyway--I’m either buffered or not; even though unbudgeted money is shown in the software as a buffer for next month, for me it’s savings toward my buffer. In fact, my method for building a buffer was to have a separate category so I could segregate it from my money ‘available to budget.’
#4: I don’t have categories for these goals right now because paying off debt is more important for me. My car is pretty new, and I rent, which means not needing to replace a roof or remodel, and I’m willing to take my chances because my credit union has been very good to me. I’m also willing to take on a beater of a car if I need to. I also have no house hunger at all, having been a nomad and renter all my adult life, and not having a family to house. I might end up buying a condo when I retire, but I don’t think it will bug me at all to continue to have someone else be responsible for keeping my space livable.
#5: I’m lucky to have a state pension and 401k through my job. I put 5% of my income into the 401k, and after debt is paid off in a few years I’ll bump that up to 10% or more.
The one thing you’re missing in your list are discretionary ‘fun’ short and medium term goals. These are absolutely critical, in my mind. I need a season ski pass as much as I need anything above the absolute minimal groceries because the unparalelled joy of skiing is a huge part of what makes me me. Maybe more. So I started saving for that, as well as ski lessons and a little bit for a pair of used skis, as soon as I started YNAB. I didn’t focus on travel because I don’t travel far; most of my recreation is outdoors and involves car camping and day hiking within the state because I love it here. But you’ll see most YNABers budgeting into categories specifically for their hobbies and for travel to see family or just for fun right into their savings categories.
"It’s still all about the method. Fancy Cloud Sync algorithm aside...the software is there to help you become more aware (Rule One), anticipatory (Rule Two), flexible (Rule Three), and secure."--Jesse's blog, A Method to Your Madness