YNAB You Need A Budget

[Peacecreek]

Hi all,

I'm new to YNAB and this forum and am currently looking at different methods/Mac software for budgeting and for my finances over all.

My situation is as follows:

Salary: Paid weekly (in arrears the following Friday for the preceding week)
Loans/Rent: Paid monthly

From what I understand I have to create a buffer to use YNAB correctly. As I am on a very tight budget (albeit a poor one) and cash flow is terrible, is YNAB really a good solution for me? It will take me at least six months to save up for a buffer.

Does YNAB provide me with a plan to create this buffer if I'm not there yet and can I use YNAB although I do not yet have this buffer?

Thanks all!

Regards,
Henrik

[blarg]

Yup, you can certainly use YNAB while you don't have a buffer. Of course it's set up to work with a buffer, but I'm in the process of saving mine up right now. Basically, as the cheques come in, you only budget the money you have. So let's say you start the month with $0. You can't budget anything. When your first pay comes in, you can budget for the most important things like rent, etc. You keep the process throughout the month, and if you can, you leave some of it unspent at the end. This then becomes your buffer for the next month, so if you managed to save $100 from the first month, day 1 on the second month, you can budget your $100. Rinse, repeat.

Go to http://www.youneedabudget.com/support/tutorials/ and watch the video called "Rule One: Stop Living Paycheck to Paycheck". It explains the concept and how building up a buffer actually works in YNAB better than I can.

[lautzu]

The active budgeting process in YNAB may even help you to discover ways that your spending is contributing that poor cash flow and help you build some momentum going in the right direction. At the very least, it gives you much better feedback about the combination of your budgeting and spending than any tool I've ever used - and as a Mac user, I tried them all.

[jhawkrulz]

Henrik,

I don't think 6 months to a buffer sounds bad at all. It is a long process to change spending habits and turn around long-held beliefs. But the peace in having a buffer is well worth it.

[bookman413]

This just in: You don't need a buffer to use YNAB. Repeat: You don't need a buffer to use YNAB.

A buffer is entirely optional to use the software.

Here is how you operate in YNAB without using the built-in "buffer" feature:

What you would do with your current irregular income is enter it as "supplemental income". YNAB treats supplemental income as income to be spent in the current budget month. Once the check is entered as supplemental income, go to whichever categories need the money from the check and allocate it.

Once you have a good months' worth of cash in your checking account, you may start categorizing your income as "regular income" if you so desire. YNAB treats "regular income" differently: it adds up all the regular income from last month and takes it and applies it to *this* month's budget. Most people switch to this idea after a while. Having a once month buffer and spending "last month's" money just seems to make life a little more stress-free. But if you wanted you could just skip this feature and use the supplemental income category for all you income and budget it as it comes in. Really it makes no difference to the effectiveness of this style of budgeting: YNAB will blow you away with what it can do for your financial picture on a week-to-week, month-to-month basis, whether you use the "buffer" feature or not. Give it a shot.

[tdlee]

This just in: You don't need a buffer to use YNAB. Repeat: You don't need a buffer to use YNAB.

A buffer is entirely optional to use the software.

Here is how you operate in YNAB without using the built-in "buffer" feature:

What you would do with your current irregular income is enter it as "supplemental income". YNAB treats supplemental income as income to be spent in the current budget month. Once the check is entered as supplemental income, go to whichever categories need the money from the check and allocate it.

YNAB Pro uses the term "supplemental income." For YNAB 3, enter the income as "Available this month" to accomplish the same purpose.

Or, do what I do -- I usually allocate any irregular income directly to budget categories. Both methods have advantages and disadvantages, but do the same thing in the end. (I'm using YNAB 3 -- I never had YNAB Pro, so I can't speak in detail about how it works.)

Otherwise, what bookman413 said!