HOW do you get a month ahead? What am I missing?

Is it just spending less than what you make and the rest gets rolled over? I'm a little confused on this. And does anyone have any tips for making this process smoother? 

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    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 6 mths ago
    • Reported - view

    That's about it. I'd definitely rolled over in terms of budgeting into the future months. 

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  • I like the method of saving it in an "income for next month" category. I prefer this method to funding a future month because it makes it easier to deal with a change in priorities if nothing is funded in the future.

    When you get paid, fill up any bills that are due before the next paycheck, a per-paycheck amount for things like groceries & gas, as well as to your annual bills & savings categories. Then what you have left (even if it's only $5) goes into "income for next month". Next month you have 5 or 10 (depending on # of paychecks) and some of your categories have money left from the previous paycheck. You budget your next paycheck, and this time you have a little more left because you had partially funded another bill with one of your previous paychecks, so now you can add 10 each paycheck. Then you hit a month with an extra paycheck and only need to use some to cover regular expenses so you put 200 in. And you get 3 in interest and 5 in cashback rewards this month and that goes in too. You can either take everything from this category to start funding the month & add more back or let it build until it is enough to fund the whole month. 

    Reply Like 6
  • I focus on making my budget a little less than my income to start. Any categories I overspend in, I do my best to use other categories that have extra money instead of changing my overall budget. Any categories with extra money at the end of the month rolls over to the next month. You can use this rollover money to budget in future important categories like rent/mortgage, electric, etc. It starts out slow, maybe less than $100 rolling over but I promise it builds up month to month!

    Reply Like 1
      • Stacy C
      • nursepower
      • 6 mths ago
      • 1
      • Reported - view

      Alex So, I should expect it to take awhile to get a month ahead? Maybe I'm thinking too Right now vs...soon in the future..lol 

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 6 mths ago
      • 5
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      Stacy C It's not a sprint, it's a marathon. 🙂

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      • Alex
      • ottobot
      • 6 mths ago
      • 2
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      Stacy C I was so ready for my finances to just be fixed when I started YNAB! It can be a little frustrating to wait but definitely worth it. It may take you a few months or even a year to get a full month ahead. It really just depends on how much you cut costs and roll over your extra money! I figured out that even cutting $5-10 from my clothing budget made a difference in the long run.

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      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 6 mths ago
      • 11
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      Stacy C 

      bevocat said:
      Stacy C It's not a sprint, it's a marathon.

       While that's true, not everyone runs marathons.  I do.  The most important thing about running a marathon transfers very well to the getting ahead analogy:  Don't go out too fast.  The first 10K is a warmup.   For your first marathon, the first half of the race should be the slowest half marathon you've ever run in your life.

      Translating to budget, that means don't get discouraged that you can't get a month ahead in one month.  If you get paid biweekly, and can budget a month on 2 paychecks, you can look at the calendar and see when you'll be a half month ahead and when you'll be a full month ahead.  But even if you get paid semi-monthly and have no extra paychecks to look forward to, you can use the method described upthread to get a month ahead.  $5 or $10 may not be much, but make it a ratchet.  $10 ahead this month.  $15 ahead next month.  $25 ahead the month after.  And as you focus on how far ahead you are and how you improve that, you'll find places where spending on X is less important to you than getting a month ahead.  So you'll cut spending on X, and get ahead quicker.

      And that's like running a negative split, i.e. running the second half of the marathon faster than the first half.  That's a Good Thing.  In running, you're more likely to finish the race uninjured and have an easier recovery.  In budgeting, you're more likely to have built sustainable habits so you can STAY a month ahead.

      Reply Like 11
  • It can be hard to break free of the cycle.  Even before YNAB, I had figured out I really needed to make a break with my frustrating cycle.  I made the deliberate leap to get out of P2P by doing a couple of scorched-earth no-discretionary-spending months where I paid minimums on everything and allowed myself no discretionary spending.  I'm single, so the only whiny person I had to deal with was me. 🙂  I think it was worth it to knock it out faster, but that's me.  I'm ready to suffer for short intense periods, but I'm not very disciplined if it lasts too long.

    Reply Like 5
  • I have been on YNAB for a very long time, and I was frustrated by how slowly it would take to get a full month ahead saving $5-10 at a time. But if that works, then great.

    For me what worked was acknowledging that I already used most of one paycheck for the next month. Get paid this Friday, 3/29? I bet nearly all of it goes to April expenses. In nYNAB I use the "Income for Next Month" category still, so I would budget that whole paycheck into that category and try to make the money I had on hand in my budget stretch for the weekend. I would consider myself "half-buffered" at that time, because I could send one whole paycheck forward to April. Yes, I used that money 3 days later by taking it out of the category and budgeting April, but to me that was ok.

    (I get paid every other week so this is based on that). So the next paycheck, let's say April 12, my goal would be to send at least a little bit of that check into the "Income for next month" category and then my April 26 check as well. Every month I'd try to send more of the first paycheck forward and make the money stretch.

    A key component of this is to try and get your budget down to only equal two paychecks every month. If you can do that, you'll be able to use the 3rd paycheck you get twice a year to build your buffer. Once you are able to send two paychecks forward (or all of them), then those "extra" paychecks are truly extra to be used for debt, savings, etc.

    Reply Like 1
  • It's not easy, but it will be worth it! I started YNAB on 2/19/19, so just a little over a month ago. Before YNAB I'd get a paycheck, pay bills, then buy ALL THE THINGS I wanted and leave myself just enough to make it until my next paycheck. I'd have like $200 left in my checking account until I got paid again. Now, I'm 3 days from my next paycheck and my checking balance is $1800. Some of that money is "spent" with things like YNAB/Amazon Prime memberships coming up, as well as bills that are coming, but in one month I was able to get half a month ahead on all bills aside from my mortgage payment. That's huge for me. I'd suggest immersing yourself in these forums, the FB forum, the reddit subgroup and the workshops and then wait patiently as your money slowly grows over time. I can't wait to see how I'm doing by this time next year!

    Reply Like 5
  • I don’t understand either, even after reading the replies. If the age of your money is 30, does that mean you are a month ahead? Or are you a month ahead when you have enough to cover your immediate obligations in the next month’s budget as well as the present month? What if you have enough to cover immediate obligations in your true expenses, does that count as being a month ahead?

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 6 mths ago
      • 2
      • Reported - view

      Julie the point is to make budgeting easier. It means that on March 31, you can budget every dollar that you’re going to need in April, however many dollars that is.  It’s extra hard at first because you probably have lots of catching up to do for your true expenses. Like if your semiannual car insurance is due next month But only half of that money is saved, you need to save 3 months worth next month to pay it. After that, you only need to save 1/6th the amount every month. Does that make sense?

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      • Bruce
      • Software Engineer
      • Bruce
      • 6 mths ago
      • 6
      • Reported - view

      Julie Age of money being 30 days doesn't necessarily mean that you'll have enough to pay everything for next month.  What it means is you have money sitting around (maybe a couple months worth of True Expenses, maybe some Emergency Fund money, maybe some "whatever it's for" money), sitting in a savings account - or your checking account.  That money will increase the age of your money, but unless you specifically devote some of it to a category something like "Next Month's Income", you won't get a month ahead.

      My age of money, for example is I think 37 days, the last I checked.  However, I am only 1/2 paycheck ahead right now, because some of the rest of that money is sitting in a vacation fund, and some is sitting in Car Repairs, etc.  By the time I get a full month ahead in my "Next Month's Income" category, my age of money will probably be closer to 2 months old, because I'm not spending that saved money, and the "Next Month's Income" is just sitting there, getting older for a whole month.

      Reply Like 6
      • MicroSpice
      • Crazy Person
      • Microspice
      • 6 mths ago
      • 2
      • Reported - view

      Julie - what Bruce said. For a long time using YNAB, my money never aged, because I was aggressively paying down debt, so all of my income was gone to paying the month's expenses, plus my debt snowball. Very little was going to "true expenses" - annual payments, Christmas, travel, car repairs, etc.

      Now that I am budgeting for both debt repayment AND true expenses, my money is starting to age a bit. Right now, we're at 24 days old. I am okay with my money not being at 30 days, because debt repayment is a higher priority for me right now than being a month ahead. That said, the older your money gets, the easier it is to "roll with the punches" (YNAB Rule 3!) and move things around when life throws you a curve ball.

      Check out the "Learn the Four Rules" class that YNAB offers to get a better handle on it, along with live feedback from an instructor.

      Reply Like 2
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 6 mths ago
      • 4
      • Reported - view

      Julie 

      I find it hard to explain Age of Money. A number of 30 or 60 doesn't always mean that you are a full month ahead. An AoM of 30 is simply telling you that the dollars you are spending today were inflowed 30 days ago; it is not telling you that you can live on your current bank account balance for 30 days.  You could have a lump sum in savings that must be spent on a big payment. That money would increase your AoM (until it was spent) even though you cannot use it for monthly expenses.

      I know I am a month ahead when:

      • all of this month's income can be left untouched and used to budget next month, and
      • all of my annual expenses are caught up to whatever /12 they should be at based on the calendar year (Christmas should be at 3/12, my car insurance should be at 9/12 for a June renewal).
      Reply Like 4
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 5
      • Reported - view

      Julie Age of money is a joke. Just ignore it. The others have provided a small handful of examples out of a rather large set as to why it's meaningless.

      Here's another one. if you put as much spending as you can on a credit card and never pay the card and make  tiny cash payments every now and then, your age of money will grow and grow and grow right into bankruptcy.

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      • Julie
      • sandhills_rider
      • 6 mths ago
      • Reported - view

      bevocat Wouldn't it mean that on 3/31 all of April would be sufficiently funded without needing the 3/31 paycheck?  So you could put the 3/31 paycheck into May?

      PS, your tag line cracks me up.  Yes sometimes it does suck to be me.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 6 mths ago
      • 1
      • Reported - view

      Julie It's actually a reminder to myself! 😄

      And nope, living on last month's income means exactly that. I earned it in March, it funds April. It doesn't matter if I got it on the 31st or the 1st, the fact is, I can budget all of April out all at once with income received in March.

      If you want to be able to fund May on income from March, that's certainly something to work towards, but not required to be a month ahead. What you don't want is to be in the middle of April scrambling to budget money for bills that happen in April.

      Reply Like 1
      • Julie
      • sandhills_rider
      • 6 mths ago
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      bevocat Huh!  Maybe we are better off than I thought.  We can budget most of April on 3/31.  Woot!

      Reply Like 2
      • bret
      • bret
      • 6 mths ago
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      Julie 

      If you can fully budget April while you're still in March, you're one month ahead.  April is one month ahead of March last time I checked. 😀

      Seriously though, the main point of the "month ahead" workflow is to stop fretting about the exact timing of your paychecks.  Paycheck-to-paycheck budgeting is tedious and stressful!  The goal is to "unlink" your income and expense streams so that you're not trying to line up specific checks with specific jobs anymore. That way lies madness.

      You're very correct to observe (and worry) that using a 3/31 paycheck during April doesn't provide much financial security. "What if that paycheck is delayed?!?"  The best way to address that worry (IMO) is to maintain a well-funded "Emergency Fund" category -- ideally with enough money that you could absorb a several month interruption in pay.  The other approach (preferred by some) is to simply budget multiple months into the future.  I personally find that more tedious, because it tugs you back toward paycheck-to-paycheck budgeting (e.g. should your 3/31 paycheck be budgeted toward your July mortgage payment??)
       

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      • Julie
      • sandhills_rider
      • 6 mths ago
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      nolesrule Lol, very illustrative.

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  • Julie said:
    I don’t understand either, even after reading the replies. If the age of your money is 30, does that mean you are a month ahead?

    No. 

    Age of Money of 30 means, "the money you recently spent was earned about 30 days earlier."  It does not say anything about how much money you have remaining or how long that money is likely to last if you continue your historic rate of spending. Indeed, you may have just spent your very last dollar.

    When YNAB users talk about "being a month ahead", they usually mean that they can fully budget a new month using funds they earned in the previous month. E.g. On April 1, can you fully budget for all your April expenses using money that you had earned (and set aside) throughout March?

    The advantage of being a month ahead (in this sense) is that you don't need to budget paycheck-to-paycheck. Instead you combine multiple paychecks and budget them all-at-once in whole-month chunks. This can make it easier to see the big picture and make steady, consistent progress on goals. 

    Additionally, strict adherence to the one-month-ahead workflow creates a sense of scarcity: You don't allow yourself to solve March overspending by using money that you reserved for April. That money is "off limits." That sense of scarcity, or "walled months" as some YNAB users call it, can encourage better decision making.  Scarcity brings clarity.

    Some users will express concern that budgeting a March 31 paycheck in April isn't really "a month ahead" -- it's just a single day!  What if that paycheck is delayed???  But IMO this misses the point.  Being a month ahead describes a budgeting workflow. It's not a significant source of financial security.  To achieve security you should have categories like "Emergency Fund" or "Income Replacement" (to handle the delayed paycheck scenario) that are sufficiently funded. And most experts would recommend that you have more than a 30-day safety net.

    Reply Like 6
  • All good suggestions so far.  Not sure what I can add that would not distract you.  My current Age of Money is a little over 100 and I'm not officially a month ahead.  I don't have a specific category called "next month's income."  Every month, when I get my income, close to the first, I budget out my month.  I usually budget a few extra dollars to each category and let the extra roll over into next month.  Those dollars add up and in most categories, I have enough to fund two or three months of expenses.  Still working on getting to that point with my larger expenses.  Now, if, for any reason, I didn't get my regular income next month, I have a "buffer" in the individual categories, with some categories I could pull from.  

    I haven't prioritized getting a month ahead.  I have prioritized having extra in each individual category.  I budget $5 per month to my "buffer" category and will normally use it first for any unplanned overspending in any of my other categories.  It hasn't grown much since I started budgeting.  

    Everyone approaches this differently.  I happen to like my way better than the way YNAB recommends.  It all works.  The goal is to have a buffer in your accounts so you don't overspend, in my opinion.  I will achieve having one month's worth of income in my "buffer" category, eventually.  I'm not in any rush to achieve it though.  I'm happy with my progress.  

    Reply Like 1
  • I will have to read these all a few times before I get it.  I can tell that being a month ahead will take us a long time because we are prioritizing debt payments first. I feel satisfied with doing that and having some roll over in each category for now. Thank you everyone.

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      • satcook
      • satcook
      • 6 mths ago
      • 1
      • Reported - view

      Julie what is your pay schedule. If you are paid every 2 weeks if you budget using just 2 paychecks each month then the 3 paycheck months will help you get ahead. 

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      • Julie
      • sandhills_rider
      • 6 mths ago
      • Reported - view

      satcook I am paid every two weeks and my husband twice a month.  My salary goes entirely towards the mortgage and retirement savings and his goes towards our living expenses.  I hope I can get ahead somehow in July (with the extra paycheck) or at least put it towards debt.  We are in debt-reduction mode.

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  • MsTJ said:
    I usually budget a few extra dollars to each category and let the extra roll over into next month.  Those dollars add up and in most categories, I have enough to fund two or three months of expenses.

     My criticism of that approach is that it blurs the line between what is "extra" (and should be reserved for the future) and what is actually available to be spent in the current month. That makes it a lot easier to overspend and eat into the buffer.

    More generally, it's problematic whenever you have a single category performing multiple jobs. Anytime you access that category (to spend from or to move money in/out) you've got to consider the impact to each of those jobs. That can be a lot to keep in your head, which kind of defeats the purpose of YNAB (which is supposed to relieve you from that kind of mental math.)

    Everyone approaches this differently.  I happen to like my way better than the way YNAB recommends. 

    Can't argue with you there -- personal finance is personal.

    Reply Like 5
      • Julie
      • sandhills_rider
      • 6 mths ago
      • Reported - view

      bret This is helpful!

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  • I'm almost 2 years in and I'm still nowhere near having my budget a month ahead, but I've been aggressively paying off student loan (sooooon), to be followed by car loan.  The only 2 categories I'm current ahead in (money I budget for this month is actually the payment for next month) are the required payments for the two loans.  

    I'd like to get to the point where all money I put in this month's budget is for next month's payments, and have next month's budget filled as well, but that's a long process!

    Those extra paycheck months and tax refunds help of course, but right now that all goes to the student loan.  :)

    Just keep at it and you'll get ahead eventually!

    Reply Like 2
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 6 mths ago
      • 1
      • Reported - view

      TechieM2 good job on the loan. As said in another post, personal finance is personal. 

      Reply Like 1
  • bret said:
    the main point of the "month ahead" workflow is to stop fretting about the exact timing of your paychecks.  Paycheck-to-paycheck budgeting is tedious and stressful!  The goal is to "unlink" your income and expense streams so that you're not trying to line up specific checks with specific jobs anymore. That way lies madness. You're very correct to observe (and worry) that using a 3/31 paycheck during April doesn't provide much financial security. "What if that paycheck is delayed?!?" 

    Probably the key thing people often miss is the decoupling of the idea of being a month ahead (and thus escaping the paycheck-to-paycheck dreadmill) from the idea of financial security. That's one reason why AoM ain't that great a metric. "You keep using that metric. I do not think it means what you think it means."

    Reply Like 5
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