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?

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  • 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.

    Like 3
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      Superbone Hi, thanks for the suggestions. 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. I was talking about deleting the savings accounts so I only have checking and credit card accounts to deal with.

      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.

      Like 1
  • 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.

    Like 6
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      farfromtheusual Lot to unpack there! thanks!

      I'm not new except I no longer have simple which didn't mix my money. I found YNAB great for planning ahead but Simple for the month to month.

      Paying by cc is a good idea. I will look at that. I do try to use them where I get the most cash back... gas, apple pay, restaurants, etc.

      My age of money is 34 days. I don't really understand the 60+ AOM, tbh. I don't need to think that far ahead -- i want it to earn interest and i can take out of a roth if absolutely necessary. Also the business isn't counted in that.

      Thanks again for the ideas... I will look into how they might work!

      Like 1
    • Black cat Don't look at the AOM - that isn't what is important when it comes to budgeting a month ahead. I honestly mostly ignore that number, with the exception of looking at it with happiness when it goes up. That number actually fluctuates quite a bit for (seemingly) no reason (obviously it has a reason, but I don't totally understand it, and it's not worth worrying about).
      What's most important to focus on is knowing how much you spend on average every month, and working towards having that amount of money set aside so that you can use this month's income to pay for NEXT month's purchases/bills. So adding up all of your bills, figuring out the average for any bills that fluctuate (power bill, etc), and then averaging your "normal" expenses (mostly groceries, gas/fuel/transportation, and other miscellaneous purchases that happening each month), plus any debt payments you might have to consistently make. Once you know that total you can figure out how much you need to aim for to have in a "next month income" category so that you can be prepared at the end of the month to release all of those funds into the budget for next month. Then you put any income you make during the month back into the 'NMI' category, and do it again at the end of the month.

      My BF has already been paid twice this month (yay extra pay check month), and so he has both of those pay checks sitting in the NMI category, on Monday I will move all of that to To Be Budgeted, and then dish it out into the appropriate categories to cover all of the standard bills for the month, and then put any extra into the little spots where I stuff it.

      That's what it means to truly be a month ahead. You can probably do this fairly easy if you have a couple of really good months in your business. This would help even things out for you so that it doesn't feel like you have so many ups and downs with the business income being slightly inconsistent.

      Like 2
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      farfromtheusual I’m kind of relieved to hear someone say “don’t look at that number. Not in competition or anything but there is a thread where people post ridiculously large numbers and it seems like either they are rich or they are not putting excess into investments. Confession...I think I was totally burnt out on COVID-19 and excited to be vaccinated last month that I spent like a fiend bordering on irresponsible! So I’m looking at that number in shock but some is future travel so maybe that is forgivable. Hope I got that out of my system because I got a much bigger goal for end of year now! :) 
      i will take your suggestion. I have a money market that I am questioning the wisdom of since all of my checking and savings earn good (in today’s world) interest already. (Yay for CUs!)

      Like 1
    • Black cat AOM doesn't mean quite what it seems like it should mean, so you can have a high AOM and still not be one month ahead in your budget. It just means you've got a lot of funds sitting in some category somewhere, but they aren't allocated to being a month ahead necessarily. That's why I don't pay a huge amount of attention to the AOM. Of course I was all excited because my AOM passed my BF's AOM... and then it dropped again. 🙄 So yeah, don't pay attention to that. Pay attention to where your funds are in our categories and what they are doing for you.

      And yeah, I went on a bit of a spending spree recently, too... now I'm all out of 'extra' funds. Waiting on the pay check to be pending tomorrow so I can see if I've got any more fun money to play with again because now I have a couple other things I want to buy again! 🤣 This 'having extra money' experience is super fun!

      Like 3
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      farfromtheusual You know what is especially fun? All these ✈️ deals! I can't wait 👏!

      Like 1
    • Black cat I'm diving into them now... we've got a family wedding in Hawaii in Oct and I'm trying to figure out the best options to get there and stay without breaking our bank!

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      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
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      farfromtheusual Are you on Scott's cheap flights? The deals are real but short lived. 

      Like 1
    • Black cat No, I'm not, I'll have to check into that. Also just found out they ended up cancelling the wedding, the bride is from Estonia, and all of her friends/family can't get into the US due to Covid issues. So they've decided to cancel. So we won't have the pressure of the trip at this point, but we will be planning some kind of a vacation in the future still, I'm bound and determined to go somewhere! (Maybe not HI because it's crazy expensive, but somewhere tropical eventually I think!)

      Like 2
  • 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.

    OK, good.

     

    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:

    https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

     

    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.

    Like 2
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      Superbone Oh I see, I didn't realize the scheduled trans had the running bal but it isn't in mobile which is a problem. My laptop is for work. My iPad is for home. Those transactions are fairly clean.

      Simple is all but gone sadly. I wasn't mixing them. Simple just put important money away automatically so anything day to day was in a safe to spend bucket. That was all I needed to look at on a day to day basis. YNAB handled the longer term stuff and the spending tracking (like how much was spent on clothing).

      I am 35 AOM. It is just counting savings which I don't like. I will take your suggestions. Not sure this active budget style is for me but I haven't found an alternative. Thanks again for your help!

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • 4
      • Reported - view

      Black cat Yes, unfortunately, the running balance is on the computer app only. Maybe someday they can squeeze it into the mobile apps, especially iPad where there's plenty of room.

      A lot of people come to YNAB feeling that way about savings but it's actually quite powerful to have them in your budget and categorize them for short, mid, and long term savings. Just like Simple, you can put important money away but like you said, you still have to have to be in control of where you're spending from and that you have enough funds in that particular account. The fewer accounts you have the better in that regard.

      However, if you decide that you really  don't want your savings in your account, you can transfer them to a tracking account.

      YNAB is the best budgeting system I've found for maximizing every penny for spending and saving. If you want a less hands on, less efficient budgeting system, Mint and Personal Capital are free and will do most of the accounting for you.

      Like 4
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 2
      • Reported - view

      Superbone not looking to be the product :). Not looking for cheap. Looking for something to free my time not constrain it more. I think pc is more for retirement anyway. Quicken started one called simplifi but they are too new and need some work.  They did want the feedback though. 

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • 3
      • Reported - view

      Black cat I agree with you. I definitely don't want advertising either. I did check out simplifi myself but it doesn't come close to doing excellent and efficient budgeting like YNAB.

      I'm just saying to use YNAB correctly, you do have to put a little time into it. It's not a hands off process. You have to stay involved and make sure your accounts are reconciled, your funds are budgeted to your priorities, and that you make decisions based on those priorities. It has had a huge impact on my life so I hang around and try to help others.

      Unfortunately though, the mobile apps don't have parity with the computer app at this time and if you're constrained to them, it's not as powerful. But still dang good.

      Like 3
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 2
      • Reported - view

      Superbone yea...I had a year to try this. I didn’t buy it earlier because of the lack of app support. Money makes me stressed and I work with finance data all day long so there is that too. I get on a money app and I’m sucked in. I’m hoping simplifi shows promise but I agree they are not there yet. Their target is clearly millennials so I would be surprised if they didn’t ramp up their dev. Simple actually had the same effect of keeping me a month ahead and building a good emergency fund and goals. You can look on Reddit and see 100s that feel the same way. so I do know it is possible to not be hands on every day. 

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • 2
      • Reported - view

      Black cat It doesn’t have to be every day with YNAB either. Actually, once you get into the swing of it, my time with it is quite minimal. 

      Like 2
    • Black cat I agree with SuperBone - once you get the hang of it, it really is very minimal time. I spend less than 10 minutes about 2-3 times a week reconciling my 3 budgets (mine, my BF's, and my business).

      You say the laptop is for your work, and your ipad is for your home, if that's a separate job type work, then that's fine, but if it's your business, then there is no reason you can't use YNAB on it. If you're concerned about security, then I can understand that, but if you're using YNAB to track business things, then there's no reason not to use the laptop. I find the laptop more efficient and faster to use to manage the budget than the mobile app. In fact, I don't even enter purchases from my phone (except for 1 store that I always forget to check the account of!), so I do all of my reconciling manually for all of my accounts and budgets.

      I have found that being able to keep tabs on my finances actually makes me feel LESS anxious, even when I know things aren't great, than having a hands off approach.

      Like 2
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      farfromtheusual I was a little vague. I have YNAB on my laptop. It is the only way I can reconcile until they update. I am a remote IT consultant and developer  so even meetings with clients are online (pandemic or not). It is easy to get sucked into a laptop. So using an iPad for personal stuff is a good way to separate plus I make art. Everything else that is important to me is compatible. There is a forum app and YNAB that are lacking. I rejected YNAB for years because it was behind. Better now but still limited. 
      so glad the days of entering stuff are gone! My bank and Apple Pay notify me of any transactions almost immediately. If someone used my card somehow I would know almost immediately. Apple Card is the only bummer and I get 2-3% literal cash back which ends up covering a grocery trip every 5ish weeks.

      Like 1
    • Black cat Cool, gotcha. And yeah, getting sucked into any device is SO easy. If you are able to manage it better that way then good for you! I think we have to be dedicated to making sure we don't fall down the rabbit hole of devices. It's SO easy to get sucked in!

      Like 1
  • 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!

    Like 5
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      Dela the website takes you to the app. The site is actually the desktop version by default but you can’t even log in without it going to the app. I could delete the app but it does most things and I probably just takes you to the App Store. A staff person said you could upload files but didn’t say how so I asked (I know how generally but if there is a workaround I don’t see it. Assuming it is the web app but I have the same issue). 

      Like 1
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 5 mths ago
      • 2
      • Reported - view

      Black cat Nah, you gotta hit the option to not load the mobile site which of course, Safari constantly moves. I use Chrome if I’m looking at my budget on the iPad, but I haven’t done it much these days as I just feel better doing most important things on a real computer. But it can still be done in a mobile browser without issue. 

      Like 2
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 5 mths ago
      • 2
      • Reported - view

       I just did it now with Safari and login automatically took me to my budget online, I didn’t even have to request desktop for some reason. It just doesn’t have my Toolkit and preferred layout. Holding down the A’s (which always mislead me into thinking this is a font adjustment) to the left of the url header should give you mobile vs desktop options. 

      Like 2
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • Reported - view

      Annieland It does but it defaulted to "desktop". I tried both. Weird that it isn't working. I wonder if I toggled an "always open in app" which I have not heard of....which means nothing. I was thinking I should try one of the other browsers but I just didn't get to it.

      Like
  • 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.)

    Like 3
      • Black cat
      • Blue_Stallion.6
      • 5 mths ago
      • 1
      • Reported - view

      Cirrus I didn't see that update yet... that was a big pet peeve of mine.

      My CU checking and savings earn 4% and 6% up to a certain point and then it drops. I did make a mistake in opening a MM so I am considering what to do with that. I put as much as I can into a roth and then am using a personal 401 for the traditional IRA. I can take money out of the roth without penalty if I need to as long as I am regularly contributing to it. I don't find it useful to track IRAs because they are long game.

      There is no option on Apple card except a monthly upload. I am really not a manual add transactions kind of person so I just budget it.

      Seriously looking at moving to a cheaper country where I can work remote. That would certainly help!

      Like 1
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 5 mths ago
      • 1
      • Reported - view

      Black cat 

      Black cat said:
      using a personal 401 for the traditional IRA.

       Do you mean you are self employed and using a single participant 401k plan? Because a 401k is a workplace plan, not a personal account.

      Black cat said:
      Seriously looking at moving to a cheaper country where I can work remote.

       You might want to research the taxation on remote or self employed work of U.S. citizens living abroad, particularly if the source of the income is from the U.S., before actually jumping in. It gets rather complicated.

      Like 1
  • 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. 

    Like 3
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