Getting off on the right foot, when pay dates are different?
I've tried YNAB about 6 times and it never sticks so this time my husband and I are both committed to doing it right. Here we are at the end of November, about to enter the expensive holiday season, why not actually try to budget?
I have 2 related questions that keep tripping me up as we get going. First, I just got paid on the 25th of the month. To me, this money is for finishing up November but mostly for December. My husband gets paid on the 31st. We are both paid monthly.
I set up my budget for November, just with the few expenses that will get us from now until 12/1 and have a lot left over. I then went to December and filled out all the categories and now I am WAY in the red. Why? Because we haven't received my husband's paycheck yet.
First question: should I just suck it up and wait for the check to come in so that the red will turn (hopefully) green? Or should I wait to budget for December until the check actually comes in? Or (and I hope this is NOT the answer) should I give "my" dollars a job for December now and then give my husband's dollars a job on 12/1? That seems complicated.
Second question: If I have some expenses that come at the end of the month and can be covered by the next month's check (because, again, I get paid on the 25th), should I just wait for the check to come in to cover those expenses? Put another way, is it OK to use "December's check" (which I just received) to cover bills that are due between now and the end of November?
In a perfect world, I would have plenty of money at the end of the month to cover these expenses but I have not entered the perfect budget world yet. Maybe soon.
Thanks so much!
Never budget money you don't have.
YNAB works because it reflects reality. You need to use the money you have now (i.e., money from your paycheck) to cover expenses between now and the end of December. If you don't have the money yet to budget into December, don't. Budget until your To Be Budgeted amount reaches zero, and then stop. Until you get paid again (husband's paycheck), you can move money between categories but you can't budget any additional money. If your To Be Budgeted goes into the red, that needs to be fixed IMMEDIATELY, or you can't trust your budget—you've given the same dollar multiple jobs, and that can't work.
Go back to December, select all categories, and click Reset Budgeted Amounts in the Quick Budget section in the right sidebar. This will zero out December (without affecting the money you've budgeted in November). If this gives you any money back in To Be Budgeted, you can budget it for December, but only until you hit zero. For example, you might be able to cover $200 of your rent but not the full amount. That's fine.
The key question with YNAB, whenever you get paid, is: "What does this money need to do for me between now and next time I get paid?" Then you give your dollars jobs based on the answer.
Hope this helps!
I was super lost and couldn't wrap my head around it until I sat through some of the workshops. When it finally clicked, it really clicked and I stare at the calendar dying for pay day so I can fill out my budget numbers with the money I just put into my account. It's such a great feeling!!
I also spent time figuring out the "goals" function. I waited until I got the initial concept down, then dove in head first. I have set up goals for the bills that I need to pay monthly/every two months. This way I know I'm for sure in the green. I pay hydro every two months, so I split my average between two months, setting a goal for half each month. I did this with my holiday gift budget as well back in September. I set an amount I decided to use for gifts, then set a monthly goal to put in "payments" so the lump sum in December didn't feel onerous.
And I'll fully admit, I did a full budget reset because once I worked it out, I wanted to start fresh and apply all the things I learned off the bat. It's going way smoother this time.
Anyways, the workshops were a great way for me to feel like I understood. And if I didn't? There's an actual human on the other side of the screen that will answer the question AND you'll hear other experiences and questions from the other participants. It's not like other online resources that have pretaped sessions and pretend it's a live event. IT ACTUALLY IS LIVE!
Ramble over! Good luck and stick with it! If it suits your style, it can be life changing. My money anxiety went from 100 to 10 once I wrapped my brain around it.