How to Create a Budget Template in YNAB

Know exactly how much you need each month

Wondering how to create a budget in YNAB that’ll tell you exactly how much you need each month? We’ll go through all the steps you need right here!

If you’d prefer to watch rather than read, we’ve got a handy-dandy video that’ll show you the way:

One of our mantras here at YNAB is “Only budget money you have.”

And there’s always some pushback. It usually goes like this: “But Kelly, I only have $97.54. If I only budget those dollars, how can I make a plan for the entire month?”

That’s a totally understandable question. When you’re trying to get a handle on your finances, you want a sense of the big picture, right? Then we come along and tell you to stop budgeting after $97.54, and you barely feel prepared to conquer the next few days.

If this sounds familiar, I want to share a little secret with you. There is a way to get the month-ahead view that you’re craving without sacrificing your grip of reality (i.e. how much money you have right now)—the trick is to create a budget template. Here’s how:

1. Create Monthly Goals

There are three goal types for spending categories and two for your Credit Card Payment categories. The spending goal types are: Needed for Spending, Target Savings Balance, and Monthly Savings Builder

Needed for Spending

Use this goal for your common monthly expenses like groceries, your cell bill, wifi, rent, etc. You set the amount to budget, and you can spend up to that amount without causing the category to become underfunded (and turn that warning shade of red).

It gets even more dialed in. There are three frequency options for Needed for Spending goals:

  • Weekly
  • Monthly
  • By Date

When you choose a Weekly or Monthly Needed for Spending goal, you can choose which day you’d like to have the goal funded by (like $10 every Monday for the ol’ coffee budget or $80 by the 15th of every month for the electric bill).

When using a By Date goal, you can choose to repeat this goal by a chosen frequency (like every three months for the garbage service).  

Target Savings Balance

A Target Savings Balance goal allows you to set a target amount to … wait for it…save in a category. If you spend from the category before the date, or if not enough is budgeted, we’ll remind you to budget more to make up for the spending.

You can even choose a target date and we’ll tell you how much to budget a certain amount each month in order to hit it. 

We see people using this Target Savings Balance most often for things like saving for a down payment on a house, building an emergency fund, or maybe padding a new technology replacement fund. You can choose to give it a date and we’ll break out the monthly savings required.

Monthly Savings Builder

Ah, the good old monthly savings builder. This goal will prompt you to budget the same amount each month, no matter what, until you disable this goal. 

This is great for things like saving for things when you don’t have a specific number in mind, like stocking up your emergency fund, building up a home improvement budget, auto maintenance, or saving money for something like an HSA, IRA, or brokerage account. You can also spend from this goal without causing the goal to be underfunded.

Set monthly goals for each of your categories.

Do you see the yellow “$0.00” that’s available in your Internet category? This indicates that you haven’t budgeted the money necessary for this goal (yet.)

Goals that haven’t been funded yet show up in yellow. The total in the “underfunded” box is how much you need each month.

In fact, this YNAB budget has many goals that haven’t been funded yet (see the yellow bubbles in the “Available” column). In order to fully fund all of the goals in your budget, you’ll need $2681.11, as indicated by “Underfunded” in the inspector (the right-hand pane). Not to worry, we’ll get to that in a bit.

Credit Card

Credit Card goals are broken out into Pay Off Balance by Date and Pay Specific Amount Each Month.

You’ll have set this goal up when you set up your first YNAB budget if you have a current card balance. If your goal is to pay off the balance by a certain date (heyo! Debt payoff on the horizon!), we’ll do the monthly math for you when you set up this goal type.

2. Tidy Things Up

For monthly bills, in addition to creating a goal, add the due date to the name of the category. This gives you an at-a-glance view of how much, and when, everything is due. And, it makes paying your bills on time that much easier! Just click the name of the category to edit. It looks like this:

Customize your category names.

Once you’ve added due dates and goals to all of your monthly bill categories, drag them into order, according to their due dates:

You can rearrange your categories in order of when the bill is due.

Now, delete any categories that you won’t need. CAUTION!  You want to be very careful with this. If you delete a category you’ve used before you’ll have to recategorize all the spending and budgeting that was in it. It is much safer to hide a category. A good rule of thumb is if you haven’t used it, and you don’t need it, you can delete it (plus that rhymes!)

You can delete categories you don’t need.

We’re getting there! And, now it’s time to look at your non-monthly expenses (a.k.a., true expenses).

3. Create Long-Term Goals

Some of our bills don’t happen monthly or we may not even know when they’re going to happen next. No matter what you’re saving for, we have a goal for you! We go into a lot more detail about goals in this helpful article.

In some cases, you know how much you need to save and exactly when you’ll need that money. For example, let’s say that you need $600 before May for a semi-annual car insurance bill. Click on your car insurance category. Then click “Create a goal” in the inspector, choose a Needed for Spending goal and you can enter the details, like this:

Save for non-monthly bills like car insurance.

Now, click “Save Goal,” and the inspector will calculate how much you need to budget each month until May in order to pay the bill. You can also choose to repeat the goal every 6 months so that it will remember your car insurance is due again the following December!

You’ll know exactly how much you need and when you need it.

As you can see, if you budget $100 every month, by May you’ll have saved up the $600 needed to pay for this bill. Woot!

Anticipate your monthly spending needs by amount shown in Underfunded.

Now, I’ve set goals on all my categories. Notice the total in the inspector now: “Underfunded – $2.607.50.” That means I can anticipate my month of spending things I need and saving for things in the future amounts to $2,607.50.

4. Bask in Your Beautiful Budget Template

You’ve created goals for your monthly expenses and your true expenses, all without a care in the world. And you know how much money you need each month!

So now we look back at the underfunded $2,607.50. It’s time for the all-important reality check. This is when we ask ourselves: “Is this realistic?”

If your income is $2,400 a month, then this budget is definitely not going to work. And, that’s OK, because knowledge=power. In fact, simply by identifying that you’re (way) out of the ballpark of what you can realistically afford, you’ve saved yourself the stress of coming up short.

Instead, you can proactively adjust your budget template to make sure that you can pay for the things that matter most to you. You can do that by adjusting the dollar amounts tied to your goals. You can push the date on that vacation goal a little further out, too. And cut the grocery budget by a few bucks.

The key here is to keep tweaking things until you’ve got a budget template that fits your income and priorities.

5. Now, We Budget

Let’s say that you’ve only got $1,640 in the bank right now. That’s how much you can budget. Remember the mantra: Only budget money you have.The budget template plans for everything, but you only budget what you’ve got right now—in this case, $1,640. So, let’s look at your immediate, most pressing, obligations:

Categories in green have been fully funded.

You can see that you’ve budgeted $400 towards your rent, but the fourth column shows a yellow alert that you still need another $400. Why would you only budget for half of the rent? Great question! Here’s why:

  • You know that you’ll get paid, again, before the rent is due. When you get that paycheck, you’ll top off your rent category with the remaining $400.
  • You need money for the electric and internet bills—they’re both due very soon—before you get paid again.
  • You need money for groceries and transportation, so you partially funded those categories to get through until your next paycheck.

When you’re done, your budget looks like this:

Here’s an example of what your budget might look like after assigning your money.

You’ve fully funded some categories (see the green bubbles), and partially funded others (yellow bubbles). Still, your plan is completely intact. Most importantly, the budget reflects reality—since you only budgeted dollars that you have in the bank right now, you can trust your budget to keep you from overspending.

6. It’s Payday!

When your next paycheck arrives, enter it:

Enter your paycheck as an inflow.

Now, it’s time to budget your new dollars! So, using the checkbox at the top, select all of your categories. When they’re selected, it looks like this:

Finish funding your categories to turn them from yellow to green.

The inspector shows an underfunded amount of $1,042.50. Your paycheck gave you $1,200 to be budgeted, so you’re good to go! Click the “Underfunded” button, and voila! Fully funded categories, as far as the eye can see:

All green categories show a fully funded month with $232.50 left to budget.

Even better, there’s still $232.50 left to budget (who doesn’t like leftover money?) Now you’ve got choices, but what to do? Will you build up some of your true expenses? Fund a little more towards that vacation category? Start budgeting for next month’s rent?

When you have extra cash left, after you’ve fully funded your budget template, it’s up to you!

Still Have Questions?

Be sure to join one of our free, interactive, budgeting classes. Check out “Set Up Your Budget” if you want to learn more about setting up a budget template.