My basic situation:
I am a Social Work graduate student and also work part-time nannying. After working at a very low-pay case management job for the last five years, I have no savings and substantial credit card debt (though my undergrad student loan debt is relatively low). My main financial goal is paying down my substantial credit card debt, though at the time I am only able to pay the minimum each month. Upon graduating, I will be working in the non-profit sector, so I will be eligible for programs for student loan absolution likely 10 years after graduating. So, while I'm not thrilled with largely exchanging one type of debt for another, at this point it seems the least of a few evils so it will have to do while I am in school.
My monthly living expenses:
I'm changing the actual numbers a little to make this as easy to follow as possible!
Money owed/bills (rent, car insurance, utilities, debt, etc): $1000
Living expenses (groceries, gas money, school supplies, etc): $400/month
Frivolous expenses (going out, clothes, etc): $200/month
Total: $1600/month
At the beginning of each 4 month semester, I've received about $4000 in student loans for living expenses (refunded to me after my tuition is taken out). Because I will be working fulltime this summer (making at least the $1600/month I need to live off of), I've planned to allocate $1000 of that student loan money to each of the four months of the semester (Jan, Feb, Mar, April), and then do my best to get enough babysitting work to make up the difference each month ($600). I've either succeeded or come close each month (in which case I'd just tighten the budget some), but have never made more than that $600.
How I have used YNAB until now:
Each month, I would put $1000 of my student loan money into my checking account from savings, where I would keep the balance of the loan (these two accounts are 'attached' electronically at my bank, so it's very easy to do). I would log the $1000 in the register as primary income budgeted this month, and then create the full budget for the month in the budget section. Inevitably it would not be EXACTLY $1600 -- each month there's extra expenses that do or don't come up (anticipated car repairs, doctors copays, etc). The red number at the top of the budget page was what I needed to make (so the more or less $600 I would be working toward making that month). As money would come in from babysitting, I would log that as primary income budgeted this month as well, and as the red number went down, I'd know how close I was to making the money I needed to make. I never even worried about budgeting supplemental income for next month, since that was not in my checking account anyway, and at the end of the month I would just even out what I spent (so if I'd budgeted $50 for clothes but only spent $40, I'd just change what I initially budgeted to $40). That way I was starting with a 'clean slate' the next month. I have no idea if that makes sense, but it worked well for me for awhile.
BUT, what I'm starting to get frustrated by is that, inevitably, something will come up towards the beginning of the month that cost more money than I actually HAVE in my checking, though I know I will be making that money later in the month. So, I will 'borrow' that money from the excess loan amount in savings, and 'pay it back' once I make the money later in the month. Keeping track of what all I've 'borrowed' and 'paid back' though is becoming a nightmare, and additionally, though I have it set up so that theoretically if I'm out somewhere and I spend more with my debit than what is actually in my checking, it automatically pulls money from my savings (avoiding an overdraft charge), some places' systems don't accommodate this, so my card will be denied, which is inconvenient (not to mention a little embarrassing
.What I'd like to do if I can figure out how:
What I've done NOW though is I've just transferred ALL my loan money into my checking account. I am conscientious enough about my spending at this point that I'm not at risk of going out and blowing more money than I have allocated each month. A few additional factors -- I'm going to be getting a steady part-time job starting mid-March, and I am likely to earn above-and-beyond what I already do from babysitting as I don't think it will impact that work. I may, then, make more than the money I need each month and it'd be nice to, in addition to starting to pay more than the minimum on my credit cards, have a little money put aside for emergencies, buy some new clothes occasionally, or (heaven forbid!:) put money toward a small vacation this summer
Finally, I am anticipating that my 2009 tax return, which I will hopefully get in the next few weeks, is going to be about $2500 -- I intend to put $500 of that toward a personal expense I anticipate this summer, $1000 toward my debt on my CC w/ the highest interest rate, and $1000 as an extra safety net in checking.So basically... how can I best use YNAB NOW, since what I have been doing it just isn't cutting it?? For my own sanity, I need to understand the numbers I am looking at -- I'm clearly going to need to 'reframe' how I have been looking at the numbers and how I am categorizing my income (primary or supplemental). I am hoping to use it in a way that lets me have a grasp on how long the money I have is going to last as long as I keep earning what I have been, AND about how much I need to make to at least break even each month if not do a little better.
I'm sorry this is so long and complicated -- please let me know if there is anything I can clarify. I'm hoping some kind soul(s) out there can help me figure out how to do this! YNAB came highly recommended to me so I'm really hoping that it can work for me. THANK YOU!!!
