YNAB Personal Budget Software & Finance Forums

[medicechic]

Hi everyone!

I just downloaded YNAB Pro (still using trial version) and so far really can't say anything bad about it. At the very least I paid my credit card (gas car paid off monthly) and my mortgage payment way before they are due. I'm having a few setbacks though and am not sure how to handle them.

So far I have been marking all income as supplemental. I began with an ammount in checking and have marked paychecks as supplemental so far. The issues I am having probably come from past poor money management. I am a math person, I have never (hopefully will keep it that way) overdrafted any account, but have been living paycheck to paycheck. I have never had a budget, so I'm confused on where to start.

I am paid biweekly and last month was the month of 3 paychecks. This helped to pay down some credit card debt. I am paid hourly with overtime and also work a variable part time job, so my income is not constant. This is making it difficult for me to figure out what I need as a buffer. This is further complicated by the fact that this month included a yearly bonus (immediately applied to credit card debt).

I also would like to go ahead a pay some bills that I normally would have paid last minute (due around the 6th of the month), but if I do that now it will show up as November expenses. This totally kills the whole budget.

To make matters worse, my fiance lives with me. All our money is totally separate. The house is in my name, and all the bills are in my name. He has been paying half of everything by giving me a check at the beginning of the month. I think some communication is in order here and that may be the main problem. We recently bought a new tv and he has been paying me back his half. He keeps doing things such as picking up my prescription from the pharmacy and paying the water bill and cable bill. How am I going to account for this in order to figure out the budget?

I have very little money in savings that I could use to fund the buffer, so I can't start out with a fully funded buffer. I am also trying to pay off credit card debt and expect this to take the next year.

I'm totally confused. Am I trying to do too much at once? I love the idea of the program, but am not sure that it is going to work for me. I have 4 days left in the trial.

Thanks!
medicechic

[WairereRose]

Hi everyone!

I just downloaded YNAB Pro (still using trial version) and so far really can't say anything bad about it. At the very least I paid my credit card (gas car paid off monthly) and my mortgage payment way before they are due. I'm having a few setbacks though and am not sure how to handle them.

Congratulations on your great start.

So far I have been marking all income as supplemental. I began with an ammount in checking and have marked paychecks as supplemental so far. The issues I am having probably come from past poor money management. I am a math person, I have never (hopefully will keep it that way) overdrafted any account, but have been living paycheck to paycheck. I have never had a budget, so I'm confused on where to start.

Many folks start where you are - don't feel alone.
[/quote]
I am paid biweekly and last month was the month of 3 paychecks. This helped to pay down some credit card debt. I am paid hourly with overtime and also work a variable part time job, so my income is not constant. This is making it difficult for me to figure out what I need as a buffer. This is further complicated by the fact that this month included a yearly bonus (immediately applied to credit card debt). [/quote]
Don't let your income being variable faze you. What you need for a buffer is enough to cover one months expenses. Bare minimum if necessary. Any month you get more than that, you have extra to put into your rainy day funds, debt etc. But the buffer needs to cover expenses for one month - that is what you are shooting for.

I also would like to go ahead a pay some bills that I normally would have paid last minute (due around the 6th of the month), but if I do that now it will show up as November expenses. This totally kills the whole budget.

Once you have your buffer in place this will become easier. As you proceed with your budgeting journey you will see the things that you pay in November as November expenses even if they relate to bills that would not be due until December. If entering them that way will throw the figures you are working with at the moment, then you can enter them with a payment date in the future if you prefer - but recognise that if you are the kind of person who likes to pay things in advance like this, then at some point you will be wanting to make and recognise both payments (the one you make just before the 6th, and the one you make around the 20th that isn't due till the 6th) in one month and budget for them accordingly. From then on you will be streets ahead because you will be budgeting in November for the payment that isn't due till December and well able to make it in advance like that without throwing any of your figures out.

To make matters worse, my fiance lives with me. All our money is totally separate. The house is in my name, and all the bills are in my name. He has been paying half of everything by giving me a check at the beginning of the month. I think some communication is in order here and that may be the main problem. We recently bought a new tv and he has been paying me back his half. He keeps doing things such as picking up my prescription from the pharmacy and paying the water bill and cable bill. How am I going to account for this in order to figure out the budget?

Communication is definitely in order. Accounting for expenses that he incurs on your behalf - you don't say if you are reimbursing him or deducting it from the cheque that he gives you at the beginning of the month. If you are reimbursing him, then simply enter the reimbursement under the category that you are paying the expense from. If you are deducting it from the cheque he makes out to you, then a split transaction showing the 'full' income and the subsequent deductions would probably be the simplest way to cover it.

I have very little money in savings that I could use to fund the buffer, so I can't start out with a fully funded buffer. I am also trying to pay off credit card debt and expect this to take the next year.

I'm totally confused. Am I trying to do too much at once? I love the idea of the program, but am not sure that it is going to work for me. I have 4 days left in the trial.

Thanks!
medicechic

Many of us do not yet have a buffer when we start, and it takes varying lengths of time to get one. Many of us also have debt which we are chasing. I don't think you're trying to do too much at once, and I'm sure you will be fine with YNAB - it is very easy to use, but sometimes we over-think things and confuse ourselves.

Please see the 'getting started' section in the library of helpful threads - there is a link in my signature - and see if that covers any of your queries better than I have managed to do. Please do post back if you are still having trouble. We are keen to see you get the best out of YNAB.

[medicechic]

Thanks for the help Rose! I am the type of person that makes things much harder than they should be!

It would be nice to go ahead a pay bills as soon as they come in the mail (or are posted online). That way I don't have to worry about it and stress which paycheck they are coming out of etc... I think that is my 1st goal coming from this program. My car is paid for but is a gas guzzler and could croak at any moment (has over 200,000 miles). House payment is constant with !@#$ and insurance escrowed. Electricity varies (I live in the deep south, so summer here is much more expensive than any other time of year), Water is pretty much constant (the city I live in imposes a minimum bill... if I actually paid for only what I use it would be 1/3!), Telephone/cable/internet is all on one bill and just varies due to long distance (still cheaper to have 5 cent a min long distance than to pay for unlimited). Trash is due every 3 months. I called about budget billing for the electricity, but the amount they quoted me per month (based on the previous owner's usage) was more than my most expensive bill in the summer. I'm working on paying off 2 credit cards. I also have a 3rd I use for gas that I pay off every month. A lot to keep track of... that's what I get for being a responsible adult right?

I found YNAB after making a credit card payment 1 day late... I actually paid it online a few days before it was due, but because of a short month (September), a weekend and holiday weekend all wrapped into one it didn't go through til 1 day late. Yay for me. Never once made a late payment and was slowly paying it off... Thanks to the new credit card laws that are going to go into effect next year, credit card companies are doing their best to penalize you now, so my 1 day late payment resulted in them doubling my interest rate to the max possible. Only good that came out of it is that it motivated me to pay this off that much faster! I'll pay that particular card off first, then shift payments to the other one. Once that is done, I'll save for a new car, add to an emergency fund and fix some things around the house. Also going back to school is in my 5 year plan, so hopefully I can save some to go toward that too!

My SO thinks I'm totally nuts. It'd be nice to get him on board too! Wish me luck!

[xraymd]

Water is pretty much constant (the city I live in imposes a minimum bill... if I actually paid for only what I use it would be 1/3!)

Greetings, medicechic, does the city true up with you at some point - do you get a credit for all the enforced overcollecting?

I found YNAB after making a credit card payment 1 day late... I actually paid it online a few days before it was due, but because of a short month (September), a weekend and holiday weekend all wrapped into one it didn't go through til 1 day late.

A good goal to reach would be to try to pay the full payment you'd planned to make as early in the cycle as possible to cut down on accruing interest. A good intermediate goal could be to make at least the minimum payment early in the cycle, then pay the rest of what you'd planned to later in the cycle. This removes the risk of being late from short months or cycles and totals the same amount you were going to make for that month, just distributed a little differently. It does take twice the effort because of two payments per cycle, but the cost of getting hit with an interest rate increase from the creditor seizing the chance to play the "one day late" card may make the effort worth it.

xraymd

[ishtar]

xraymd is that you?

*waves*

Good to see you here!

Ishtar (from the Fool)

[CatalogersRule]

Hi medicechic,

I started using YNAB at the beginning of October and am finding it well worth it despite confusing myself occasionally.

Oh boy, do the banks like to have their cake and eat it too. I set up a second checking account and have automatic payments deducted for 4 of my 5 credit cards. Two of them are set at the minimum payment and two are set at a fixed amount that is now about twice the minimum. I have money automatically transferred to the account every pay day. The up side is, I know I can't miss the payment and loose my balance transfer rates (3 of them). The downside is that 3 of them (and my car before I paid it off) penalize you for paying extra by deducting the amount of the automatic payment from an extra payment. Grrr. I've gotten around this by making a larger payment using a credit line at my CU, snowballing that credit line, rinse and repeat.

I added my Bank of America MC minimum payment last January after a late payment (it's the one that's not a balance transfer & the only one that doesn't deduct the automatic payment from an additional payment). However, BoA sent me a letter telling me I was no longer eligible for their best balance transfer rate but didn't jump my regular payment finance rate. Since I don't want a balance transfer mixed on a "regular use" card, that was ok with me.

But I've canceled 2 cards after they jumped my rates -- with NO late or missed payments. I think I'd had one of them about 20 years. I think the banks are being penny wise and pound foolish as the higher rates infuriate good customers who are now working on getting debt free AND STAYING THAT WAY.

So snowball that card and tell that bank where to shove it!

Nancy

[xraymd]

xraymd is that you?

*waves*

Good to see you here!

Ishtar (from the Fool)

Ishtar, it *is* me and great to see you, too!

xraymd

[mmaustintx]

On the topic of his & hers finances, my husband and I are separate finances too, and here's how I do it. I register all the bills (even those he pays or we split) for their full amount in the budget. Then, when he gives me his portion of the bills and any additional, I register that as supplemental income for the month and note the amounts for which line items. to complicate it even more, he's paid twice-monthly rather than my biweekly schedule; so some of the expenses are in advance of his payment. Ack!

It's not a perfect system, but it helps to recognize the whole bill as part of the budget, in case his contribution were to stop (layoff, bad income month, etc). For those expenses he incurs on my behalf, I register them as cash in-cash out, again, so they get included in the month's expenses. Ultimately, I'd like to buffer up to the level of these combined expenses (for the just-in-cases that might happen). At that point, his contibutions would be applied in the budgeting process to the rainy day funds...

[medicechic]

Hi xraymd!

As far as the city goes, no they don't give credit for all the overpaying. I have only lived here for about 8 months, and always wondered why my bill was right around $50 a month and never changing. Not long after I moved in the water company came out and changed the meter. They claimed it wasn't working, but my bill/usage hasn't changed. They only show usage in whole numbers x 1000 gallons. Mine has been 1 pretty much every month. They are increasing the rates this month and sent out a notice. The minimum is 3 (3000 gallons), so I'm no where near that. The bill includes sewer and fire protection fees. The city doesn't have property !@#$, so they get their money wherever else they can.

The place I lived before would read meters every 2 months, so your bill was the same 2 months in row and then they would credit you or charge extra on the difference next time they read the meter.

I have to get ready for dinner. Thanks for the reply!