Overspending when budgeted 3 months out
just curious what you guys would do. Say im budgeted out 90 days. today I overspend a category. Would you steal from a category in the current month to fund the overspending or steal from the the furthest out month?
I feel like I should steal from this month. Not sure it really matters but in my mind you should feel the "pain" of overspending when you do it not just take a little away from 90 days later which will get refilled next paycheck.
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It's up to you. But I would suggest you reframe your thought process. "Steal" and "feel the pain" are completely not the point of YNAB. The entire point of YNAB is to make a plan for the funds you have now based on the information you have now. You check your category balances before you spend and make decisions. You then make adjustments as you go along as you receive more information.
Ex: You made a plan for how much you were going to allocate funds for dining out. Except this week various other life events and stuff happened making it more important that you have more funds available to eat out and so you need to reallocate from a lower priority category. "Punishing" yourself next month is a waste of time.
You many very well think that you value reducing your coffee budget but when you overspend it month after month you should come to realize that you actually value buying a fancy coffee drink more than you thought and make your budget reflect that reality. But again, "feel the pain" isn't part of the equation.
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jenmas makes sense. thanks!
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jenmas I like this approach and the reframing. Every month is different and I can't predict things - that's not the point of my budget. Rule 3 means responding to what is happening, while keeping an eye to the future. A budget is meant to make you feel freer not constrained. (PS. Well done on getting three months ahead)
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Current month.
I also wouldn't budget that far out. Anything further than next month I put in a category called Income Replacement. I want that money to tide me over in the event of a job loss, not because I had to have pizza again this month.
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dakinemaui Ive seen some people talking about only doing a month or 2 out but didnt see a good reason for that. I have a separate emergency category with 3 months expenses in addition to other savings goals categories.
I budgeted out 3 months for the comfort of seeing in my budget that things are fine for the next 3 months plus i have an emergency buffer.
thanks for the reply!
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Lavender Crab I agree with dakinemaui The point isn't to replace your emergency funds, its actually achieving your goal, ie. knowing that things are fine for the next three months, but without the need to spend time adjusting the budgets in future months if the totals this month change. It is, of course, up to you. I
I have a variable income and have a separate savings account with some income replacement funds, but I also have a Next Months Income category which I add income to over the month so I can budget the next month as one thing (well almost...I'm not quite there yet, but with a windfall will get close this month). I prefer not having to adjust the budget in the future month, if I overspend in a category this month.
My plan is to add a Next Months Income +1 category and add a second month to that category. Then I have the budget put aside for the next two months based on average spending and true expenses, but no need to actually determine my category spending until the beginning of the new month.
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