Forgetting to budget for next month rent
So I get paid bi-weekly, and I've set my target for rent to the 1st of every month because that's when I pay rent. Usually I get my second paycheck of the month by the 20th and pay off my credit card by 26th which leaves me zero saved for rent as I only receive my next paycheck after the 1st. If somehow it saved money for next month's rent, I would know where to spend by the end of the month.
It may be helpful to create an "Immediate Expenses for Next Month" category. Determine what you'll need to have at the start of every month - rent, other bills due at the beginning of the month, groceries, transportation - necessities. Fund that category with at least your last paycheck (could set a target for last day of the month).
Then, you'll know what money is left to truly send to your CC to pay down debt.
When the month rolls over, move that Next Month money to the proper categories in the new month and you're ready to go!
Side benefit: This process can also be expanded to your entire month's needs, eventually allowing you to assign the entire month on the first using money from the previous month. The ability to do that is called being Buffered, and it's lovely to not have to budget paycheck to paycheck.
Now that you know the problem, you can plan ahead. Know when you get paychecks you need to go into the next month and budget for rent OR like others have mentioned, set a target goal for the end of the month.
The original YNAB method taught you to take every paycheck and first look at everything that must be paid between now and the next paycheck and also account for larger things that might require bits of two paychecks before you funded other discretionary spending. Dave Ramsey called it the "Four Walls". You always make sure that the absolute basics to survive are covered - food, shelter, basic clothing, and basic transportation. Then you can fund other things like other bills, fun spending, etc.
And as someone else pointed out, your credit card should not be affecting your budget at all if you are not overspending UNLESS you brought in a starting balance and didn't cover it, so "Riding the float" or using tomorrow's money to pay for yesterday's spending. Your credit card available balance should match what you owe. If you are unable to pay for the whole amount and still fund your budget with cash, you are actually carrying debt. If you can't turn things around so your rent is covered and pay the card, you may have to just pay lower payments for a while until you are a bit more ahead.
viperswipe I wanted to pop in with some resources to accompany the replies you've already gotten! I really like using Monthly Savings Builder Target types for things that are due right at the first of the month - that way, no matter the due date, YNAB will always prompt you to budget the amount of the target every month.
You might also consider making a budget template to help you prioritize when and where to assign and spend money. Here's a Help Doc that goes over how to do that. Like Tif_Ann mentioned, the most important question to ask yourself when you get paid is "what do I need these dollars to do for me before I'm paid again?"
Lastly, YNAB is built to help you pay down your credit cards while still prioritizing your needs. Here are the three best resources to help you understand how Credit Card Payment handling in YNAB works, but let us know if you have any more specific questions about CCs. We're here to help!
I find that YNAB and targets are not friendly for bi-weekly pay cycles. I would love to see YNAB become bi-weekly friendly.
This is what works for me...
- I do not use any targets.
- I do have all my payments as scheduled transactions in the accounts.
- My next January pay cycle is the 21st, This needs to cover any payments due before the next pay of Feb 4th.
- If you look at the February calendar, it will show any under funded categories and it will tell you the due date. So I know that all my 1st payments must be covered)
YNAB does show and help me to allocate my cash to future budgets. Thanks to YNAB I have a few pay cycles covered in advance and I do not have to worry too much about the next pay and do I have things covered.
Move Light Sound Life agreed - we allocate manually because Auto Assign only goes by date and doesn't always give the desired results. For us, having a mixture of priorities and "money needed by" (as opposed to "money spent by") doesn't really work with Auto Assign. Targets are helpful though.
viperswipe our situation is similar to yours in some ways - mortgage payment on the 1st, big payments due towards the end of the month, and we get paid right in the middle (15th). We use the "Income for Next Month" approach, where we assign a portion (or all) of any income that we get into an "Income for Next Month" category, and then reassign it the next month when we're ready to spend it.
I've only ever done anything manually so...any advice given may not work as well if you want to automate everything. (I also don't use targets at all - but I know that if you need to make the payment on the first you need the funds available before that, so I'd put in a target date as early as possible.)
Move Light Sound Life said:
If you're just starting out/learning how to set up YNAB more efficiently, it would be better to go truly manual as you learn the mechanics/method.
Move Light Sound Life said:
Once you've got that figured out and your True Expenses even out, then the automation can help reduce repetitive work.
This is where I am at.