YNAB You Need A Budget

[mastermoe]

Hi,

I am new to YNAB3 and to this forum. I apologize if this question has been asked before, but I did a search and couldn't find a similar topic.

I created a scheduled transaction for my income that occurs twice per month. The income is labeled as "available next month". Let's say that my paycheck is $500 (twice per month). I noticed that at the bottom of March, the income available next month shows $500, but not $1000 as I was expecting. I am assuming this is because I already got the first paycheck but the second one is not due yet. Once the second check comes through, the next month's balance would be refelected accordingly to $1000. Is my assumption correct?

Also, months of May, June, July and so on, do not report any income and therefore YNAB reports that I am over-budgeting. Is there a way to let YNAB report my income properly knowing that I know this money is coming in? Or is that against the YNAB philosophy?


Thank you!

[Patzer]

I created a scheduled transaction for my income that occurs twice per month. The income is labeled as "available next month". Let's say that my paycheck is $500 (twice per month). I noticed that at the bottom of March, the income available next month shows $500, but not $1000 as I was expecting. I am assuming this is because I already got the first paycheck but the second one is not due yet. Once the second check comes through, the next month's balance would be refelected accordingly to $1000. Is my assumption correct?

Yes, that's correct.

Also, months of May, June, July and so on, do not report any income and therefore YNAB reports that I am over-budgeting. Is there a way to let YNAB report my income properly knowing that I know this money is coming in? Or is that against the YNAB philosophy?

The strength of YNAB is in budgeting only money that you really have. Then when an unexpected expense rolls around, you see the choices of how to pay for it in terms of what else you *don't spend* in order to do what you have to do, or what's important. If I have $500 in the Auto:Service category and a repair comes in at $960, I need to find $460 in my budget. Maybe I take $50 out of groceries, and $30 out of Dining, and $380 out of Auto:Car Replacement. Then I need to actually spend $50 less on groceries, spend $30 less on eating out, and over time build the Auto:Car Replacement category back up to where it should be. The point is that I don't get to say, "Oh, well. Something bad happened and I'll ignore it." Instead, I have to say, "Something bad happened. Where can I make it up?" That's an entirely different mindset, and that's where YNAB helps you get to a better financial position.

No matter how many time I write something like this, there will always be people who want to budget out for a year. I think that's a waste of time, but the people who are successful using YNAB and enjoy budgeting out for the future tend to recommend using a separate YNAB file for the forward-looking what-if.

Now, you may ask, why shouldn't I just enter my future paychecks in my current YNAB file and just do my planning there? The theory is that by putting the future income in, you're obscuring you view of what you have *right now* and not sending yourself good budget signals to support good spending decisions. But don't take my word for, because I've never tried that. This thread describes the experience of trying to budget forward with YNAB better than I ever could.

Patzer

[mastermoe]

Thank you so much for the detailed reply. You've been a great help!