YNAB Personal Budget Software & Finance Forums

[thefish30]

So say I have a small windfall that's not really income. For instance, I sell a book on ebay now and then, or mom slips a sawbuck into a letter.

Is there any reason not to make it available this month?

[Trevor]

The only reason that I could think of for not making it available in the current month is if you are trying to put off spending the windfall. For me it's just a little psychological game to influence my spending decisions. If it is available in the current month and I already have everything budgeted, then I am likely to put it into some sort of entertainment category. If I make it available in the next month, then it just gets lost in the pile of money for next month and my brain is less likely to see it as a random spending oppourtunity.

[Patzer]

The psychological aspect can cut both ways. If I get a small windfall during the month, after I've already budgeted everything, I'm likely to put it entirely into a savings category such as Home Improvement or Car Replacement. If it is folded in with the rest of my money at budget time, I'll lose track of it. Maybe it makes it into a savings category, maybe it doesn't.

Do it whichever way works best for you.

Patzer

[thefish30]

Ok, good. I just wanted to make sure I wasn't missing something.

Thanks!

[Fireproof]

If it were me, I'd put it to "this month" and then decide which budget it needs to go into. Only you can decide if it should go to a budget to be spent (entertainment, more groceries, etc) or a budget to be saved (savings, e-fund, etc).

[woodnboats]

If it were me, I'd put it to "this month" and then decide which budget it needs to go into. Only you can decide if it should go to a budget to be spent (entertainment, more groceries, etc) or a budget to be saved (savings, e-fund, etc).

That's my approach, too. I'm retired, but I earn $300-400/month delivering restaurant food. I budget that in the current month as it comes in wherever I see the need, and what is left automatically rolls over to next month. Great feature of YNAB3. That way, my buffer depends mostly on my wife's steady income and my SS, both regular dependable amounts. Anything I bring in is gravy this month, or left-over gravy next month. I still budget most of it, even if it's for something frivolous, but I don't depend on it.

Kirk

[lautzu]

I tend to put all windfalls as income available THIS month. In fact, I even do this for the third paycheck of a month when that happens twice a year (I am paid bi-weekly). Our budget is built around two paychecks/month, so any time there is a third, it is like a windfall (though you can see it coming) that we use for large projects we've been saving for and for paying down debt. There's no need to wait until the next month to budget that money.

[thefish30]

I even do this for the third paycheck of a month when that happens twice a year

That makes perfect sense.

We plan to use those for our big planned lumps (car insurance & Christmas). Why wait to put them in their categories?

[maryea]

I don't get many windfalls (none, really!) but I do occasionally earn a few bucks doing a survey online or something, and I put it in as this months income. I think it's just up to you.

[jodi]

I don't record windfalls as "income". I record them as inflow directly to the budget area I want it to go to. I'm working a debt snowball, so for now, I record any windfalls as an inflow in the "Household: 2nd Mortgage" category. It then is added to the available for that category. This helps me ensure that it doesn't just get added as "available", and budgeted for something else. I do this for all income that isn't in the from of a paycheck. My day-to-day budget must be covered by paychecks (that are budget as Income: available next month). I don't want to get used to "living" on selling things on craigslist.

[meganne]

Jodi,
Doesn't that mess up looking at things overall? I mean, if I'm trying to pay off a $1000 debt, get an extra $900 paycheck and input it as inflow in that category, then send it off to the debt-holder, when I look at that category, it's going to look like there was effectively no activity in it instead of paying down $900, right?

[jodi]

Meganne,

I guess it depends on how you look at it. I've got an account set up for my second mortgage, and it's balance keeps going down, so for me, that is how I look at things "over-all". Let's say I budget $200 for my regular payment, in the Household: Second Mortgage category, I make the payment on the first of the month. Now my budget looks like this: budgeted: 200, outflow: 200, remaining:0. Over the month I have $300 dollars extra income, that I record as "inflow" to the "Household: Second Mortgage" category, now my budget looks like this: budget: 200, outflows: -100; remaining: 300. When I send the extra payment, "budgeted: 200, outflow: 200, remainging: 0".

After typing it all out, I can see what you mean about looking at it overall. But it works for me, to "loose" that number in the outflow. My account balance goes down appropriately, and that's how I monitor the progress. What doesn't work for me, is counting "extra" income, as income. It is more likely to be allocated towards something during "whack - a - mole" budgeting if I do it that way. Since it's never in the "budgeted" field, I can't pull it from there if I need to cover something else. It makes it so that if I have to rearrange the budget I must take from a different discretionary category (restaurant or entertainment) to cover the overspending on groceries or utilities, rather than my debt paydown money. (That's how I roll with the punches -- I don't let any of my categories be in the red at the end of the month.)

It's one of the things that I really like about YNAB -- It seems really strict, but it's really flexible, it allows me to do things the way I think, and at the same time, it allows others to do things the way they think.