YNAB You Need A Budget

[amueller]

We have entered our 3rd month on YNAB and all in all I am fairly happy. The one thing that is bugging me is without a buffer and getting paid every 2 week and keeping the budget relatively "clean" looking primarily when a paycheck overlaps the end of month month beginning of the next. I am not sure what the best way to distribute that paycheck and still keep the budget clean and easily interpreted. I am currently trying the idea of prorating the paycheck for my disposable income categories (Groc., gas, misc etc.) For end of the month and then putting the remaining amount in the next month. Jury a=is still out on that method and my wife hasn't seen it yet to veto it

I will add my voice to the crowd that would love to see but fully understand why we never will a biweekly or custom date budget as part of the program. This will all go away once we finally get to the buffer!

[Budget_Ninja]

We would let excess funds roll over un-budgeted to the next month while building our buffer. We had a spreadsheet outside of YNAB that listed our bills by date and applied the funds that rolled over to the next month first to all of those bills due before the 1st paycheck in that month. After that we applied the amount needed for the non-bill requirements (Gas/Groceries ect..) We had these amounts determined on a weekly basis, so would apply say $100/week for groceries and say $75/week. If there was only one week in the new month then we would only apply a weeks worth of funds.

After we were comfortable that we had the basics covered until next paycheck & if there was still money left over we would stretch beyond the next paycheck with those bills & non-bill expenses one week at a time. For the bills we updated our spreadsheet to indicate they were budgeted, for the non-bills we added a note in the budgeted amount field as a reminder of how far those funds were supposed to last. Could just as easily added the non-bills to our spread sheet on a weekly basis and mark them as budgeted there too. It took a few months to build the buffer but once completed we were able to put all of this extra work behind us.

**I never budgeted a partial amount to a category. In order to keep in clean for me it was all or nothing. If I needed $75 for electricity and only had $66, I left it un-budgeted and my spreadsheet indicated it hadn't been budgeted as well. I would have $66 sitting 'Available to Budget' but I liked that better than accidentally shorting a category because I forgot it was a partial allocation.

[litterbug]

I'm buffered now, and grateful for it, but I spent several months budgeting biweekly. The way I thought of it was to forget about the Julian calendar when I budgeted because my budget period was two weeks, not a month or half a month.

My long term bills are categories which got enough per budget period to add up the the goal amount by the target date: A $200 payment due on November 1st would be $200/13=$15.38, rounded up to $16. I put that calculation in the note field next to the category name and I'm done.

Monthly bills depended on where I was. My last paycheck was on the 4th. Let's say I budgeted half of June's rent out of that paycheck, and the other half out of the paycheck on the 18th--and I can pay rent early! I do the same with my monthly car insurance premium and other bills that come out on the first. (My car loan and credit card payments come directly out of each paycheck, so they're easy to budget for). My student loan payment is on the 28th, and I budget around half out of each paycheck, which gives me some extra room out of some paychecks. You get the idea.

Let's say I'm hosting a big dinner party next month. I just calculate those expenses, break them out by category, and budget them as needed to get that amount. I'd probably do it in my entertainment category and add it to the usual category budget.

As Budget Ninja said, remember that anything left in a category just rolls over to the same category next month. Some people will choose to enter part of a paycheck to be "available next month" instead of "available this month," but I tend to just enter income as available in the month I plan to budget it so it will just be sitting there when I need to spend it.

[roakleyca]

I'm struggling this this issue too......and have recently followed the forecasting advice in YNAB and created a "Forecasted Income" on-budget account so that I can see where I need to put all my money for the month.

It's kinda like the anit-buffer. I'm budgeting money one month behind instead of one month ahead. Yikes! (Especially considering there is a good chance that my union is going on strike in June!!!)

Some people will choose to enter part of a paycheck to be "available next month" instead of "available this month," but I tend to just enter income as available in the month I plan to budget it so it will just be sitting there when I need to spend it.

I struggle with assigning a pay check which might span the current month and next month all to "availalbe this month" because I'm worried I'll assign that money (Rule 1) to this month when I need a portion of it next month.

So what I do with those paychecks is split the transaction. If I need one week of it for this month and one week for next month, I'll split it 50/50.

But then I worry that not all weeks are created equal and I'll need more of it later.

Ahhhh!!!!

I NEED A BUFFER!!!!!!!!

[Kroneg]

I'm in the same boat - I'm paid every other week and don't have anywhere near a full buffer. What I do is when each paycheck comes in, I budget that amount. I budget for stuff that needs to get paid before my next paycheck. So each paycheck goes toward some groceries, gas, etc. that I know will happen. Also, any bills that will come due before my next paycheck. Anything left over goes toward the bigger/long term things (house taxes, insurance, etc.). I've found the question "What HAS to get paid before my next paycheck comes?" really helps me focus on where to budget each paycheck. I'm slowly accumulating some "left over" each month, so eventually I'll have a full month buffer and can do a whole month in one shot - until then, I'll just do it one paycheck at a time.

[Tif_Ann]

I am currently trying the idea of prorating the paycheck for my disposable income categories (Groc., gas, misc etc.) For end of the month and then putting the remaining amount in the next month.

This is what I do - and it helps me build my buffer. I only fund the absolute necessities to get me to the end of the month, and usually am pretty good about NOT spending those last couple of days. But, for example, I budget $100/week to gas every two weeks, so if there is one week left I put $100 in this month and $100 into next month. Then I split my paycheck into "income available this month" for those necessities I've budgeted and "income available next month" for the rest. This lets me budget to zero AND build a buffer. Every month I try to send more into next month than last month - I'm currently sending 2-3 child support payments and one whole paycheck forward and am now working on my first paycheck of the month!

[litterbug]

I struggle with assigning a pay check which might span the current month and next month all to "availalbe this month" because I'm worried I'll assign that money (Rule 1) to this month when I need a portion of it next month.

I think what worked for me was that I was actually thinking biweekly. If I was paid today, I knew I couldn't spend all my gas money this week if I had a lot of driving to do next week. I knew (at least approximately) my category balances, and that if I had an office lunch out I had to leave enough in my eating out category to cover it. Two weeks was a short enough period of time to be very certain how much money I'd spend next week, and to spend accordingly this week.

Of course, having a buffer is great for a number of reasons, but after the first few months I got on a roll with it. The key is ignoring the monthly calendar and, before I whipped out the checkbook or debit card, thinking whether this spending would leave me short before I got paid again.

I'm not sure that makes much more sense...

[blackdiamond]

The reason that you cannot easily budget in anything other than monthly is that the majority of your bills are due monthly. If the budget was setup using custom dates to match pay dates then you'd still have to worry about which budget period you needed to account for each bill on.

For 2011, my pay dates starting in January were 6th (1*), 20th (2), 3rd (1), 17th (2*), 2nd (1), 16th (2*), 30th (3), 13th (1*), 27th(2), 11th(1*), 25th(2), etc. You can see that my *car payment that is due on the 17th would be on the 1st paycheck in one month and the 2nd in another month. No matter which way you slice it, you have something to figure out and since everyone has monthly bills and payperiods vary it makes more sense to budget by the month.

[amueller]

HI all thanks for the great responses. I haven't had any problem with accounting for a2 week budget...been doing the biweekly budget for awhile via a spread sheet. More my problem right now is how to work with YNAB for that paycheck that covers the end of may and beginning of June for example. I think for bills I am going to just put them in the month they are do and for discretionary items (groceries gas etc) I will budget it to May and let the remaining amount roll over June. Got to get to that buffer to make this all so much easier

[blackdiamond]

It sounds like several of your are too focused on the number in the budgeted column rather than the available balance column.

If you have the Android mobile app you'll notice that for the budget the only number that's provided is the available balance. This is because it doesn't matter when or how much money was budget to the category, you simply need to know how much is left. YNAB teaches to spend according to your category balance and not your account balance or even your budgeted amount.

If your first paycheck (paid every two weeks) is on the 1st (and you get paid every two weeks) you need to budget this amount to cover expenses between the 1st and the 15th when you get paid again. Note: Any money that you don't spend will still be in the same category that you budgeted it after the 15th. When you get paid on the 15th you need to budget this money to cover expenses between the 15th and the 29th. Note: Any money that you don't spend will still be in the same category that you budgeted it after the 29th. When you get paid on the 29th you need to budget this amount to cover expenses between the 29th and 11th (assuming the first month is a 31 day month) of the following month. Note: Any money that is left unspent on the 31st will still be in the same category on the 1st and can be spent just the same as if you budgeted it on the 1st. The difference is that your budgeted column in the second month will be blank until you get paid on the 11th. As long as your spending according to your available balance in each category it really doesn't matter when you actually budget the money.

Think of the budgeted column as the garden hose filling your swimming pool and the leak in the pool as your spending. The budgetd column is only an indication of how much water was put into the pool, but you better check the water level (i.e. the available balance) before diving in.

[litterbug]

I think for bills I am going to just put them in the month they are do and for discretionary items (groceries gas etc) I will budget it to May and let the remaining amount roll over June. Got to get to that buffer to make this all so much easier

That sounds like the easiest way to handle it. I'm glad you found an approach that works for you!

[MiloKat]

How about budgeting some if the income in the current month and budgeting some in the next month. Just make sure you look at the available to budget figure for next month, when budgeting all the dollars & ignore the surplus for this month.

[sarham]

You could also go back and change your last income to a split transaction, setting your remaining amount as income available next month. Then you won't have any surplus this month to ignore.