WAM as I near the end of the month
Finishing up my 2nd month with YNAB. About a week before the end of the month, we start going overbudget on some categories - so i start moving money from other categories that we've underspent on - typically the lower priority discrentionary ones. From reading the forums I've learned that this is called WAM - whack-a-mole. This gets quite tedious.
The alternative I see is to cover the overspending with money I've put into categories for next month's budget and let the underspent categories roll-over. In my situation, I have enough buffer in my cash accounts that I can cover my spending. But it feels like this would eventually chip away at my buffer.
Any thoughts, opinions, advice?
You are right, taking it from next month's category will likely chip away at your buffer. Are you really going to spend less money next month in a category because you spent more this month? Or are you just not being realistic about how much you actually need in your categories to begin with?
February is the shortest month of the year, so if you aren't budgeting enough in February, how will those same amounts be enough in longer months?
nolesrule - Thanks for the input. To clarify - I'm not proposing I cover overspending on "groceries" this month from next month's "groceries". I agree that is futile. I have one "TBB" category where I park money for next month. Tomorrow (March 1) I will distribute that money to individual categories. I was thinking of covering overspending from next month's TBB.
Also, I agree that I will need to increase my budgeted amounts to reflect reality as I collect more data on our spending.
I make a point of doing this WAMMING even though i readjust most of it in the new month after we roll over.
i make it an exercise in spending consciousness. What has to give to cover extra this extra spending? Is this one-off? Careless spending? Indicative of too little assigned?
if its one-off then taking from something else is sensible.
if it is careless then taking from fun money or luxury category a smack on the hand.
If the category is in fact underfunded, then fix that and change the goals.
its a useful and different thinking exercise at the end of the month (after spending) rather than at the beginning of the month (intending to spend).