Tips for knowing you are covered?
I woke up with anxiety fearful there isn't enough in my checking account to cover the first part of the month. I have plenty to cover the first part of the month. The trick is to see how much I need and to have it ready in checking. I am self employed so I pay myself from a business account twice a month. I try to keep as much in the business as possible so I don't necessarily pay myself the same amount.
In one account that is now being closed by the parent company they had an app where you could put aside your expenses like YNAB but for that one account so I always knew it was there. Now I have savings and bank cards mixed in and I have no idea unless I go through and add everything up. Scheduled transactions are not that helpful because I have variable accounts and there are things that cannot be scheduled. I am not a 30 minutes a day budgeter either.
The only things I can think of to solve this are not ideal:
1. modify my categories to come exclusively from one account or another. The mobile apps does not allow you to select so you have to add it in your head am I am not a 30 minutes a day budgeter.
2. remove all accounts except the checking. Put the savings in a different budget. I am leaning this way but I am also looking elsewhere without much success.
Any other suggestions?
Black cat said:
I try to keep as much in the business as possible so I don't necessarily pay myself the same amount.
Keep a bigger buffer in your checking account. Don't allow it to get too tight. I wouldn't recommend 1. or 2.
Use the Running balance feature to see where you're at in the near future. As far as scheduled transactions, you should be able to put known bills in there and at least approximations of other bills and income which you could adjust later.
The bottom line though to solve your issue is to just keep more in checking and less in your business account. Plus, you probably should separate your business budget from your personal budget. It's a lot less messy this way.
Black cat Welcome to the YNAB party!
It sounds like you are newer to using YNAB, is that correct?
If that's the case, be a little patient with yourself, it takes some time to get a feel for the flow of things. There are LOTS of support videos and things that you can read that will help you to get the hang of the system.
There are a couple different ways you can work with this:
If you enter the scheduled transactions ahead of time for the bills that you know, you can check them all together as a group, and it will give you a total at the top of the account list so you can see how much it will be before they are due. Then you'll know the total amount you need to have you your checking account in order to keep things covered.
What I like to do in my category names is to actually enter the amount of the bill (for consistent bills), or the average that I know I need in order to keep it covered over time. So my categories read like this:
Mortgage 1st - $1692
Phone 5th - $101
Car Payment 20th - $209.80
I like to put the date the bill is due, and the amount, and then rank them in order that they are due.
This gives me a lot more information in the category name so that I know what I need to plan for and expect and when it happens. You can also add up the bills that you know, and enter that amount in the category title so you know you'll need that much in the account at the beginning of the month.
Superbone also has a good suggestion - putting a certain amount in your checking account that you will keep there as a buffer. This can be listed in a category somewhere that you call 'extra savings' or 'checking account buffer' or whatever. I would start with whatever amount covers the bills for a short period of time so that you always know that you have the funds there just in case you did not move enough money over.
But - to point out something that might not feel within reach at the moment - the ultimate goal/recommendation of YNAB is to get at least 1 month ahead on all of your expenses. It took me a long time to get there, and there are a lot of different ways to get there, but however you choose to do it it is a really worthwhile goal - especially having your own business. I have a category that is called "NMI" or Next Month's Income. On the pay days, I put all of the pay check into that category, and then when the month rolls over, I move that money up to the To Be Budgeted field and then assign it to all of the categories where it belongs. That makes it SUPER easy to not stress about how much is where, because I know it will be ready and waiting.
The other thing I do is use my credit card for as many of the bills as possible. I know that some bills can't be paid by credit card, but every one that can be I use the card for. I get rewards for that, but secondly it also means that I don't have to worry about how much money is there, I know there's room for the bill to be charged. Then when the credit card itself is due, I can easily check the checking account to make sure the funds are there, and then pay the credit card.
I understand your struggle trying to work out how to balance things out running a business and paying yourself, but it's very doable, and with time you'll figure out a rhythm to it. Be patient with yourself, and stay active with your budget and you'll get it worked out in no time.
Black cat said:
My business is in a different budget... definitely a nightmare to keep them together. I pay myself from the business account by transfer from one account to another.
Black cat said:
I was talking about deleting the savings accounts so I only have checking and credit card accounts to deal with.
Yes, I understood that and that's not the recommended practice. It's good to budget your savings as well. Both short term and long term. Here is a really good article to read and absorb:
Black cat said:
I don't mean the balance of the checking account. I can see that. I mean the balance that I need based on the budget. YNAB doesn't care where the money comes from but I DO! Everything is mixed together so that I am also budgeting savings without realizing it unless I go in and manually add them up (on a mobile) or select them on the web app (which I avoid). I should have made a note of how much I was saving for expenses automatically on Simple but they deleted the feature before I could. On Simple it would not allow you to budget from savings or goals unless you move it to checking so you always know where the money is coming from. Being able to mark categories that way would actually solve the problem.
But you pay your bills out of your checking account, right? Isn't that your main question? How do you know you have enough in your payment account (checking) to cover your bills? A combination of the running balance and scheduled transactions will show you that for the near future. I don't have to manually add anything up. I can just look a month into the future in my checking (payment) account.
Regarding Simple, it's not a good idea to mix their budgeting solution with YNAB's. I'd just keep your savings in one bucket and let YNAB categories handle the division.
Farfromtheusual also has some great recommendations for you. Responsible use of CCs reduces the frequency of payments and if you can get a month ahead, especially for someone with variable income, that will be a great help for you. Something to aspire to.
Black cat If you're mostly managing your budget on your iPad, you can get some of the web features by loading YNAB in your Safari browser, rather than using the mobile app. That will help you see running balance. (Note that you might need to tap "Request Desktop Version" on your browser when you log in.)
I'll echo what folks here have said about creating a buffer in your checking account so you can feel comfortable knowing you're covered and don't have panic moments! We also have a process we suggest using that can help you trust you have enough in checking, here.
Ultimately, only you know what will give you peace of mind. For me, sacrificing some interest income to create a continual buffer of $1000 to one full month's income that sits in my checking account is important to me for peace of mind. I always know my spending is covered!
Now is a pretty good time to leave dollars in your cheque account, since interest on savings accounts is so poor. After I had been doing ynab for a year or so I got pretty clear about how much to leave in the cheque account. The occasional larger bill I would manually transfer $ into the account to cover it. The nice thing with ynab is that I didn't have to be exact, as it was a transfer. If I transferred too much I could transfer it back later. It didn't affect the budget since all my. accounts were 'on budget'. Its all a lot easier if all the accounts are 'on budget' (not tracking).
I reconcile on my phone every day or two (and hallelujah! the phone lets you do a proper reconcile now!), as the fewer transactions I had to look at the easier it was. 3-4mins max. And each time I reconciled I was reminded of my priorities, which helped me keep on track with my spending. (leave it a few weeks and not only is it hard work, I get slack in my attention to spending.)
Black cat said:
I am really not a manual add transactions kind of person
I didnt use to be a budget sort of person. I was definitely a hopeless with money sort of person. Following the ynab rules can lead to change on many fronts.
I still wish I’d found ynab twenty years ago— oh oh oh; letting the regret go. Congrats to you for getting into it so thoroughly.