Perplexed about "To be Budgeted"
Greetings all, I started with my checking and savings accounts yet I am far from it being zero for the month of September. Do I need to budget for the following months until it reaches zero?
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No, you need to budget your savings categories and Rule Two, true expenses, categories. Your first month will be unique in that you’re starting with all your savings that need to be budgeted. In future months, you’ll only be dealing with your income.
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It's useful to allocate startup capital toward putting yourself "on track" for various True Expenses. If a yearly expense is due 2 months after starting, on track would have 10/12ths in the category (possibly 11/12ths depending on the timing between due date and when you will budget future income).
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It's also useful to use startup capital to cover budget entries in the current month so any income earned this month is budgeted in next month's area. This is especially useful when paid multiple times per month. Since you don't need it this month, you can accumulate it in a holding category and budget the lump sum after all of it has been received. The workflow is much simpler when budgeting month-sized chunks.
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Right, rule 1 says give ALL of your money a job. So if TBB is not $0.00 yet, keep on filling those categories. As already mentioned, True Expenses and making sure everything for the month is covered are 2 big parts. If there's still money left, put it in a category to save for next month's budgeting. If there's still money left after that, (not sure how much is in your savings, or what it was for) then start making categories for specific reasons you're saving it for. A few examples: Income Replacement, Medical deductible, House repairs, Car repairs, vet emergencies (if you have animals) etc.
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I am also confused by the "to be budgeted" number, it makes no sense as it does not correspond to the cashflow of available money in the checking account. How is this number calculated? Are all accounts summed together?
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Slate Blue Lion Yes, all of your on budget non-credit card accounts contribute to TBB.
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Slate Blue Lion Yes, in short, you are allocating every dollar in your accounts to a category.
TBB counts every dollar in your accounts. YNAB wants all your dollars, not just this month's cash flow, given a job. For your savings, that might mean setting up categories for future expenses such as car repairs or income replacement. The more specific you can be with these categories, the better prepared you'll be to handle the costs when they happen (sometimes all in the same month!).
In YNAB, these categories will have an available balance at the end of each month until you spend that money, and it will roll over to the next month automatically.
After the first month, TBB will only show dollars that haven't been given a job. I.e. your income.
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Thank you all! I created a few more categories and TBB at zero.
