Age of money, how is it derived?
I seem to have (according to my wife) certain OCD behaviors. For example: the little gem in the banner of the budget page: "Age of Money". It causes me consternation when I look there and it says (as it does now) 0 days. Is this magic? Because currently I have dollars doing the job of paying the mortgage next month and many other jobs -- yes in June. So, why does it still say 0?
Age Of Money (AOM) is supposed to measure the length of time between when you earn income and when that money is spent.
The first thing to notice about that definition is how it's based on transaction data -- inflows and outflows -- and not on budget data. AOM doesn't care that you have some dollars assigned to the job of "paying the mortgage next month." It only cares about the spending you've already done -- it's a backwards looking metric.
When you first start using YNAB, your initial account balances are recorded as inflows on the date you set them up. So for a while -- depending how long it takes you to spend that initial sum -- your AOM score is going to be bounded by that start date. E.g. if I start YNAB with $10k in the bank, and it takes me 8 weeks (= 56 days) to spend through that money, my AOM score will grow as I use YNAB and spend my money (0, 1, 2... 56).
There are more subtleties with the calculation -- it's actually an average of your most recent 10 outflows, and credit cards can greatly influence the calculation. If your OCD demands a more precise answer, I'm sure someone will be along shortly to supply it.
With all that said, I find AOM to be a complete waste of time and undeserving of its prominent placement in the YNAB UI. I'd encourage you to take it with a heaping dose of salt -- ignore it, or use the excellent YNAB Toolkit browser extension to hide it altogether!
Simply put, it is the average of the ages of the last 10 cash transactions. Wrapped up in that little statement are loads of consequences and issues in interpretation that are frequently misunderstood.
The most frequent misunderstanding is thinking it has anything to do with the budget. I know, it's on the budget screen, so you can hardly be blamed. I think you'll find the traditional metric of Net Worth to be far more useful.
Silver Captain said:
So, why does it still say 0?
To answer this explicitly, because your 10 most recent cash transactions are dated with the same day you started YNAB.
(It is possible that it's slightly higher from transactions made after your starting day, but it is just rounding 0.)