How much do I need to make?
My wife are a month into YNAB. We’ll have our credit card balance paid off by the time it’s due on the 10th of Sept. (we went on two trips we couldn’t afford this summer.)
We’re reigning in our food costs and have sussed out true expenses. We have an age of money of 28 days (though it still feels like we’re waiting for every paycheck.)
So making progress but we’re certainly ending up with a lot of yellow categories. I’d rather not live like a monk and would like to just go increase my income but I can’t really seem to nail down EXACTLY how much I need to be shooting for.
Can anyone tell me how to get that data so I can start planning ways to increase my income?
If you have a budget with everything you want in it you can see how much it is underfunded . The best way I found was to start a new budget and put in current funds saved in categories then put in what I wanted to have available and when . eg holiday june 2020 with a target category balance by date . That way I could see how much I needed to save each month to achieve the goals.
The total underfunding was income needed for month? Seemed to work .
Whereas I’d love to be able to increase my income every time I noticed yellow categories, the true point of YNAB is to help me prioritize the income I do have. That takes serious planning and work. If I don’t commit to the prioritization of my existing income then it doesn’t matter how much I make - I’ll always be overspending and failing to see the big picture.
My advice is to start slowly making the tough decisions of where your existing income needs to go. If that’s a high cost monthly bill like a mortgage, or paying down credit card debt, start forcing yourself to determine what’s most important each month.
Once you start seeing the important expenses and planning for those right after you get paid, then you can start breaking down less important expenses and truly see what you are able to afford and need to cut back on.
It doesn’t mean you have to live like a monk. In fact in can be quite liberating because it means you are putting an opportunity cost on every aspect of your spending, and it’s up to you what matters the most to be spending on each month.
If you do happen to overspend on a category, you have to decide how to make up that cost from another category, thereby decreasing the funds in another category but still remaining in your budget.
Fair warning - it took me almost a year to truly get things in order and start benefitting from YNAB. So you may just need a little more time.
Hope that helps! :)