YNAB You Need A Budget

[litterbug]

No hard feelings here, either. I just don't see YNAB as a sophisticated piece of software; it's pretty lean compared with any other financial program out there. Heck, I used calculators even when using Quicken. I don't have experience with anything else besides Mvelopes, which was such a pain that I didn't last long with it. But you and I have different styles, and there's no problem with that.

[rodeoclown]

We are talking internally about making it easier to budget for goals, but it's not the number one priority (yet - cloud sync is coming).
For now there is a calculator button built into the budget field (click the little arrow to the right of the field), so at least you can figure out the monthly budget amount in the software

[brown685]

I said it feels like the least supported rule, not that it was completely unsupported.

James

[akip]

2. I like to see when a bill is due. For example, if I have a single yearly payment of $3000 for personal insurance due in December I want to be able to visually see it coming. But all I see are recurring monthly budget amounts of $250 (3000/12).

Thanks

Back to the OP.

My solution to this is to enter my goal savings amount in my category name. In your example, it would read something like Personal Insurance ($3000). Then I create a note next to the category name (little icon directly to the left) that houses all the details. The actual due date, my best guess as to the amount, the months I have left to save, and the calculation I used to figure out my monthly savings target for it. Again using your example, if my insurance was due in December I would like to have the full amount saved up by the end of November. That leaves me with 10 months to make this happen. ($3000/10= $300/month.) It is simple to glance at your ever increasing Category Balance to get a quick idea of when this payment is approaching. If I currently have $2700 sitting in that category, it serves as a reminder to me that the payment must be due soon as I'm almost at my savings target.

When the bill finally arrives, I make a note of the date and how much it cost, and start the process over again (now dividing by 12).

(This doesn't just work with Annual bills, I do the same thing with my quarterly car insurance payments as well as a couple of bi-annual bills.)

If you ever have to "rob" from these categories to cover a "murphy" visit or some other bad planning/spending, it is true you would have to start the calculations all over...I think this is a good thing as I consider these categories as a last resort to borrow from. It is these large expenses that we haven't saved up for that got a lot of us into trouble in the first place!

Alison

[kixncrumpets]

All I'm talking about is doing exactly what you're talking about, except inside YNAB instead of the mental notes and calculations. If "Saving for a rain day" is a core value of YNAB, why not make a tool that helps you do that? I know it's just easy math, it's all math, why even use YNAB at all if it's just math?

I think you're not reading my posts. The thing that's all math is dividing your goal by the number of months until you need to use the money. I don't need to remember anything, and I divide $245 (for example) by the number of months until the bill is due once, put that in the note field, type the number in the budget field, and I'm done until I reach the goal. In no way is Rule 2 unsupported; it's the reason category balances carry forward unless you zero them out. It's presumed that a user can do simple division by hand or on a calculator. $245/5=$49. It just took me less than 5 seconds to pull up my desktop calculator and push 4 buttons, and it would take me 10-15 seconds at most to open the note field and enter $49 into the budget field, open the note field and enter the target date and the goal amount.

No one but you can figure out how much money you need to save for your expenses. Why it's a hardship to push calculator buttons the first time you establish your goal and target date and then budget that amount in the category every month is completely beyond me. No financial software I've ever run into will do that for you. If I wanted to track something in a bar graph or have fields auto-filled I'd use Excel.

As a relative n00b to YNAB and having recently set up (and still encountering!) this type of non-monthly category, I found myself with two options:

1) Create a category for every single non-monthly expense, individually.
Pros - Don't have re-do math (e.g. full amt/12) as each category is a discrete item
Cons - lots of (sub) categories, reports mean less

2) Allocate non-monthly expenses to non-individual categories (i.e. "Books," not "Kindle downloads," "Paperback swap" and "new books").
Pros - Categories mean more (e.g. "Media subscriptions", not separate for "Wired", "Hulu", "Horse & Hound") when looking at overall spending
Cons - May not remember when certain subscriptions are due w/o looking them up; may not know what amount in a category is fixed vs. adjustable (e.g. "Music" might contain $10 worth of discretionary iTunes downloads *and* $20 Sirius XM subscription); needing to re-do calculations when paying an expense not in a tidy, 12-mo period and starting over with a tidy, 12-mo period for the next year.

I ended up with a little text file that reminds me of dates and, sometimes, tacking specific items and due dates on to the category name. Having read this thread, I see I completely missed the hovertext note to the left of the category (thanks, marzydj and litterbug!) and will fill those in instead.

litterbug: for some of us, it's not about doing the initial calculation, it's about remembering from month to month how/when we did it and if we combined, increased, decreased amounts, remembered to add in xx item. I end up doing the same calculations over and over again if I don't write them down clearly and very specifically, as my brain won't hold the information for more than a fruit fly's age. Having a space in the program, rather than outside of it, keeps things tidy and a bit more serene. I think money serenity is my ultimate YNAB goal!

[heatvent]

I haven't had the discipline to keep this going but I am back to trying again. However, my process is to do an annual budget offline in Excel. I try to forecast net pay by doing a bi-weekly calculation of pay, taxes, 401(k), etc. Also try to forecast all expenses in the month they occur. There is a mix of budgeted expenses that are actual expected costs (insurance, property taxes, etc.) and those that are more or less expected monthly average spending (clothing, food, etc.).

At the moment, I use both Quicken and YNAB. Quicken autodownloads and does the initial categorization of expenses and aggregates data into one QIF file that I export to get data into YNAB. I also put my annual budget into Quicken which I don't change from the original. I use this as more of a look at how am I doing to where I expected to be. Quicken also keeps investment data like 401(k) that I don't keep in YNAB -- i.e. I use Quicken for my complete financial picture/history and YNAB to budget/control spending.

I import my Quicken transactions into YNAB which has the same categories as Quicken. I use my annual budget as a guide for my monthly YNAB budgeting but tweak things as there are changes - for example, I am refinancing my house so I will change my payment from what was in the original budget or I may take down spending on groceries if my spending habits have gone down.

The total process is a bit of belt and suspenders approach but while I think YNAB is a good way to focus on your current spending, it isn't really as strong dealing with your overall financial picture unless you only have a simple financial setup like just a checking account and savings account. Each program has its own focus and strengths - Quicken puts comprehensive account tracking and reconciling first and foremost and YNAB puts budgeting up front so each tends to excel in its respective area of focus.

[litterbug]

Kixncrumpets, I too have the memory of a gnat, so having it all available on one screen is important to me, too. Perhaps I'm lucky in that I can cover all of this in 9 master categories with 4-5 subcategories apiece. So far, I've only had to adjust a handful of budgeted amounts, and usually that's because I reduced the budgeted amount because I threw extra 'windfall' money at it.

Here's what my note for my renter's insurance premium category looks like:

Starting 8/12: $200/6=$34/month by March 1

That shows me when I started saving (August, which is when I got comfortable with YNAB and started saving), the goal amount ($200), the number of months left at the time I started (6), and when it's due. Notice that I'll actually reach the goal by February, but that's just my conservative nature acting up. Starting next month, I'll divide $200 by 12 for $17/mo to save it all by next March. If I change an amount for some reason--let's say I have an urgent emergency and have to raid that fund--I again divide the new balance needed by the months left. I haven't seen any reason to track how I changed the budgeted amount in the past, but if I wanted to I could look back at previous months to see when the amount changed, or add a note saying why it changed.

My Lumpy Meds category note is different because it covers multiple items and is more of a rolling fund:

Med A: $150/3 mo=$50/mo
Med B: $80/3 mo=$27/mo
Med C: $90/mo
Total budget: 167/mo

I don't know whether this covers your issues, but it works for me!

[kixncrumpets]

Thanks, litterbug.

Yup, that's pretty much what my text file looked like. I've just been putting those notes into YNAB this afternoon, since this thread pointed out the notes feature to me. (Thanks!) I'm currently at 9 Master Categories and nearly 70 Subcategories, and feel I'm being general!! We seem to have lots of potential subcategories, maybe I like too much granularity.

Looking at that feature, if a set of notes were to be added to the "category balance" column (and that traveled with the column from month to month, unlike the "budgeted" column notes), maybe that would be a nice space to record a particular goal vs. general category notes. That way, if I have 5-6 furniture items I'm saving up for, I or the other have can see which one we're currently saving for (or what percentage belongs to what) quickly.

I'm doing lots of end-of-the-month calculations, and retroactively underfunding a few categories if they weren't used in order to get rid of debt as quickly as possible. Those moles will be whacked with the emergency fund should they rear their heads. It's not the most conservative route, but I'm most concerned with eliminating debt. I did spend some time today doing a "what-if" projection for when the elysian fields of positive net worth are in sight. Then it was back to reality.

knc

[fiish]

G'day. Long time lurker (of 2 weeks), first time poster.

For what it is worth here is the method I use. It's a combination YNAB and multiple bank accounts and allows one to budget for something regardless of how often it recurs.

First the bank accounts... Your bank may be different but here in Australia it's pretty much standard that you can open a near unlimited about of free sub accounts in the online banking portal. A 'regular' Savings account acts as the parent account, but each sub account has a unique account number and transfers can be made to and from it by yourself or any external party - including direct debits and Paypal. Savings accounts also have no monthly fees here in Oz. I have 2 savings accounts, 19 sub accounts and 1 VISA. Having 2 savings accounts means on the VISA card I can push Chq, Sav and Credit to deduct from 3 separate accounts without having to first wire something using internet banking on the phone or computer. It is not possible to access the sub accounts with the card so they're better suited for setting aside money than a daily cash Savings account.

Anything that's a non-monthly expense has a dedicated sub account - one account per item. e.g. Car registration, clothing, vacations, and so on would have a separate bank account. The purpose of this is to let me see how much has been set aside for that expense regardless of how much budgeted each month. In the example of annual car registration, on the first month the amount in the account might be $10 and so is the budgeted amount in YNAB (under Transport : Rego & CTP). However by month 6 the account will have $60, YNAB will still show $10 budgeted for that particular month but with $60 in the Category Balance column. By 12 months the account has $120, YNAB still has $10/month but $120 in category balance. Then taking something like pet expenses for example. I have 3 categories in YNAB but a single sub account with the bank. The monthly amounts in the YNAB categories of food, litter, and vets all get wired into 1 bank account. When I have a pet related expense as long as there is enough money in the account (which I can check on the YNAB phone app) then I know it's safe to spend that money and stay in budget.

This means one can keep track of money allocated to date and use a monthly budget. YNAB has sufficient categories for me to track the monthly cost of EVERY single item I buy no matter when it's due but I have far fewer bank accounts than categories. Just work out the annual cost and divide by 12 - that's what goes into YNAB.

My salary is paid into a dedicated 'Deposits' account - which is also one of the Savings account and available on my VISA card by pushing Chq. This lets me access the funds immediately if need be. Set up in internet banking to happen the day after the money is deposited by work I have automatic recurring EFTs to wire the appropriate amounts into all the sub accounts. YNAB has matching recurring amounts for all the categories - with a number of the transactions across multiple categories being wired to a single account (on the left on YNAB)

Maybe it seems overkill to have 50 something categories in YNAB and 23 bank accounts but I know where every single dollar goes. If YNAB could incorporate virtual accounts then the bank accounts could be removed but it wouldn't make the process any more complex or easier. The online banking EFTs are automatic. The YNAB transfers are also automatic.

All I need to do is (1) pay for things on VISA and record this in the YNAB iPhone app at the time, (2) wire the money from sub account to VISA account using internet banking, (3) record the sub-VISA transfer in YNAB on the computer. This third step act as a sanity check and lets me see that the account balances online match YNAB in case a decimal goes in the wrong place.

This has been the culmination of 4 years of work for me which started out with 5 bank accounts and a homemade spreadsheet made years ago that coincidently looks almost identical to YNAB but long long before I'd heard of it. In fact I'm still in my YNAB 34-day tray but am hoping cloud sync or v4 get released to avoid having to buy it twice in a month. It's just a given now that I'll be paying for it once the trial has expired.

Hope this helps....

[letseatpaste]

fiish, that sounds like a nightmare having all those sub-accounts. You know you can build up funds in your YNAB categories, right? If you don't spend it, it'll carry over to next month and you can keep adding to it. No need for any sub-accounts at all.

[Turf_Hacker]

I'm with letseatpaste. I start to feel faint at the thought of attempting to track 23 different accounts. I have a checking account, two savings accounts (two for historical reasons, maybe I can talk the budget committee into closing one), one PIF credit card account, and my Health Savings Account. That's plenty of accounts for me, I let my category balances dictate the purpose of the money in those accounts. I know I have (for example) $10,000 in the emergency fund because that's the category balance in my Emergency Fund category. It doesn't need to live in a special account, the dollars know their purpose by the category balance not what account they happen to live in while they wait for an emergency.

[fiish]

Don't worry, it might sounds like a nightmare but it's no more difficult having multiple accounts than it is having categories in YNAB. In fact it makes keeping track of money even easier. There's certainly no disadvantages. All I did was import a weeks worth of transactions from internet banking to YNAB and right-clicked them to set it up as a recurring event. From then on all I do pay on VISA and wire money from the sub account later on to pay off the card.

By pure coincidence YNAB has an almost 100% identical layout and maths setup as my 4-year old spreadsheet - right down to the categories, EOM rollover amounts, the lot. It's like someone took my XLS file and ran it up in Adobe Air. I'm not sure how long you've been using YNAB but I can tell you it's better to have the accounts than not. It's been a long term project for me so try it before you knock it.

It was Jan 28th when I first started using YNAB so I experimented with the EOM rollover and such to get a feel for it. I even went through and recreated the entire YNAB budget 4 times in the first 2 days of trialling it to get a feel how everything works. One experiment was also based on a single savings bank account for bills and while it's hard to put my finger on it and explain here without writing a novel, I can tell you that a minimal number of accounts is actually not as good. This seemed odd due to the purpose of categories but them's the breaks....

[letseatpaste]

To each his own... but I can't possibly see how maintaining multiple accounts and initiating and tracking a bunch of different transfers each month is easier than just divying it up into categories. You can still spend on Visa and then pay it all with one transfer without all the different accounts. Are you trying to keep your Visa off budget or something?

[fiish]

I suppose the major advantage, personally, is it essentially creates sub-categories (to the existing sub-categories within the major categories), and each sub-sub with their own totals. It's a way to group like transactions together without necessarily creating a major category or keeping a note. Think how OneNote has journals, notes and tabs. In my spreadsheet this is expressed using a simple addition formula and a comment on the cell but YNAB certainly has more eye candy and the iPhone all is a good solution on top of that.

Example... I have 3 categories for pets: Food, litter, vets in YNAB but they go into a single bank account. (Hence having twice as many categories as actual accounts.) YNAB displays how much has been set aside for each of those categories by glancing at the Category Balance column. But I don't want to create a major category of 'Pets' and instead keep it under 'Housing'. But by glancing as the bank account I can see how much in total has been set aside. This comes in handy because maybe there's a special on food so I spent a whole lot more than the monthly amount even going into the cash set aside for vets. But that's OK because the vets isn't for 8 months so the money that would have been set aside for food makes up for it plus there's a bit of savings. It lets me put some harder limits on something I'd term a 'group', but not something that warrants a major category. Yes the YNAB buffer should cover all this so it works out but this applies a little more fine grain control. And like I said, YNAB doesn't seem to be able to group these together with the computer GUI and certainly not on the phone. If YNAB can support grouping items together like that in the future then I can get rid of the bank accounts but right now I need 3 levels of categories and not 2.

It also allows one to achieve what the OP was trying to do.

Semi-related: My spreadsheet also displays the breakdown of every cost in a daily, weekly, fortnightly, monthly, quarterly, bi-annual, and annual figure - something I hope comes in the Reports for v4 of YNAB.

Hope this helps.

[Will]

Semi-related: My spreadsheet also displays the breakdown of every cost in a daily, weekly, fortnightly, monthly, quarterly, bi-annual, and annual figure - something I hope comes in the Reports for v4 of YNAB.

Hope this helps.

So not only do you divide everything by 12, you also divide it by 366, 52, 26, 4, and 2?