Here's the situation: We've been using YNAB for over a year now, with a lot of success in our goals. We have not been using a buffer this entire time so I have an elaborate spreadsheet that helps us time things properly as far as due dates go. I liked this b/c it kept us focused and required us to stay on top of things. I'm just plain tired of doing it that way now. We are in a much better place now and while I don't want to relax on following our budget I think it's time to relax a bit on the tedium.
To make this transition I want to discuss my logic to ensure we are doing this right! DH doesn't use the program so he can't check me on it.
Here is my plan:
- 1. Our monthly take home pay is $8,326.06 most months, some months more, but this is the base number. I want our buffer to be this number, this is more than enough to cover expenses and put the rest towards our goals. I want to make all of these decisions on the first, not as the money comes in.
2. We currently have $6,000 sitting in our emergency fund category that I would like to use as part of the buffer
3. On the 31st of August we are both getting paid with $4,163.03 coming in that day. August was a 3 paycheck month for me.
4. I want to use this income from 8/31 to zero out any overspending and finish our August budget for things being paid on the 31st, this will leave $2,589.34 in excess on August 31st.
5. I want to use the $2,589.34 and $5,736.72 from our emergency fund category to create the buffer for September (2,589.34+5,736.72=8326.06).
6. On September 1 I want to budget out our entire month of bills due in September, fund our lumpy categories and then decide what to do with the excess.
7. I will allocate all of the paychecks earned in September to "Income Available Next Month"
Does anyone see an issue with this logic? I cannot see anything wrong with it but I may be missing through the trees here so any confirmations or red flags would be greatly appreciated!