Entering first month's budget

I just want to make sure I'm not making a heinous mistake here... my budget started on 3/3.  I've entered in all of March's payments and budget line items, which means I'm very much in the red right now because only one of four paychecks for the month has come in.  I assume that red will go down with each inflow?  I know the new user docs talk about not entering obligations that aren't covered by the current paycheck, but I was on a roll and wanted to get it all entered.  I'm fine with it taking a little while to balance out as long as I haven't done something that will do lasting harm to my setup.

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  • The harm is you have no idea what you can spend without impacting some other category. You might as well not plan your spending because you're not using it for guidance.

    When you only budget money you can spend, what you see in the Available column really is available. It also helps in the prioritization that occurs when reallocating.

    Put anticipated/nominal values in the category name, note, or create a Goal so you're ready when new money comes in.

    Like 6
  • In your other thread, you said you were using another budgeting program. Why did you switch? Most people switch their budgeting program because they want to see different results. 

    Budgeting only what you have, learning to use your credit cards as spending vehicles and not debt instruments, and moving money instead of budgeting averages are what causes the difference. Some people insist that paying $84/year to use YNAB their own way is worth it to them; you may end up being one of these people. I would find it silly to pay for YNAB to budget the way I can budget in other software for free. 

    Assuming you wanted something different, you owe it to yourself to actually investigate what  the difference is. 

    Like 5
  • Ok, I'm thinking I still don't really understand how this works.

    For one thing, I thought that once I put in all these budgeted amounts for everything that they would still be there in the following month.  I'm getting the impression that that's not the case, that I have to put them in every month?

     I can see not putting in budgeted amounts for actual bill payments until they happen.  But let's say I want to have $1000 budgeted for Household and Groceries per month.  Are you telling me I have to figure out how to split that per paycheck so I only put in a certain amount each time new money comes in?  And I have to do that every month, as four paychecks come in?  That sounds like a heck of a lot of work and easy to get wrong.  I hope I'm overcomplicating the situation?

    I'm one of those people who breaks out in hives when they think about budgeting, which is why I haven't done this before now.  I'd rather not being doing it now, but my husband decided we should, and I am the numbers person, so here we are.   Having to do weekly maintenance of this thing is not going to make me very happy....

    WordTenor   Wave isn't a budgeting app, it's an accounting app.  It's what I have used up to now to kinda-sorta track our spending by categorizing everything.  Which is a task I typically do in bulk once per year, so having to do constant maintenance on a budget sounds a bit daunting.

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      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 8 mths ago
      • Reported - view

      janineanne If you want to budget, in total for the month, $1000 for groceries. Create a goal, to spend $1000 for the month. Then, budget what you think you will spend on groceries between now, and your next paycheck. For example: Say you budget $250 for groceries between now and your next paycheck (entering $250 in the budget column). Then you go shopping tomorrow and spend $270. You would have to pull that extra $20 from another category to cover the overspending. But that's okay, because that's how flexible budgets work. Then the next paycheck comes in a week, and now you can budget another $250 into groceries, making the total in the budgeted column $520 (the first $250 plus the extra $20 and now the new $250). and repeat. When you are paid a few times a month, you will have to budget for each paycheck, it is not going to be a one and done thing, at least initially. It will be more work than you are used to, but it will also create different results than you are used to (saving money). This is why they say try to age your money, it makes it so you can budget once a month using last month's income, instead of budgeting each time you get paid this month. I hope that makes sense.

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      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 8 mths ago
      • Reported - view

      janineanne And the point of using "goals" is to keep you on track. You will get paid in the middle of the month, see that the available amount in "groceries" is yellow, which means you need to add more money to it to meet your spending goal of $1000

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      • Brett M
      • Silver_Orca.10
      • 8 mths ago
      • 3
      • Reported - view

      Emma Catherine This response saved this whole application for me because I was just as lost as the OP and did the whole month and looking at red everywhere. I was so confused how anything was going to ever get to green. This was  vital to understand in order for this service to work for me. 

      Like 3
      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 8 mths ago
      • 1
      • Reported - view

      Brett M I was totally in your shoes at the beginning. I budgeted everything and I was like WTH?! Then I actually read the beginner's guides and everything fell into place.

      Like 1
      • ynab_inab
      • ynab_inab
      • 8 mths ago
      • Reported - view

      janineanne Continuing further on what Emma Catherine mentioned, setting up goals can be extremely helpful.  YNAB has several documents and videos on utilizing goals to setup a "budget template":

      https://www.youneedabudget.com/how-to-create-a-budget-template/

      There are a bunch of things in there that are useful for helping to manage the month as you get paid, such as including the due date in the naming and ordering the categories so you can more easily see what has to be funded before next pay day.

      I do want to quickly highlight one of the most useful things covered in it (once this clicked for me, it was a huge "ah-hah!" moment for me).  By selecting all categories or sub-set of categories, the app automatically calculates "amount underfunded" across all of the ones chosen.   You can then even go one step further and in one click automatically budget the underfunded amounts for those selected.  

      So it initially shows you the full amount you'll need for the whole month to stay funded and on track.  And on payday 1, you can choose a subset to fund automatically and then do a few others manually as needed (maybe half funding some goals etc.)  Then on payday 2, you can select them all again to get the current amount underfunded and then have YNAB automatically budget the remaining for all of them, again just in one click.

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  • janineanne said:
    once I put in all these budgeted amounts for everything that they would still be there in the following month

    If you budget $100 this month, the category will still have $100 next month unless you spend it. (You can scroll to next month's area to verify this.) What is also true is that you will have to budget again if you want to put another  $100 in the category.

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  • janineanne said:
    Are you telling me I have to figure out how to split that per paycheck so I only put in a certain amount each time new money comes in?

    It's up to you to arrange when to put money in. Some people split larger expenses across paychecks but budget the entirety of categories A, B, and C from one check and the entirety of categories D and E from their second check. Some people split ALL expenses across paychecks. (Personally, I find the latter to be less error prone since you do the same thing every time.)

    I (and many others) have worked to sidestep the multiple-check issue by not needing any of my paychecks in the current month. I just queue them up until I have them all, then budget all of next month at once. If you don't have sufficient startup capital to do this (i.e., cover expenses occurring between your first check and the end of the month), you need to gradually work up to this by getting increasingly ahead each month.

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  • janineanne said:
    I'm one of those people who breaks out in hives when they think about budgeting

    You should probably understand that budgeting with YNAB is very different than budgeting with other programs. The budget is simply the plan for your cash made with available information. If things change ("life happens"), then you merely change the plan (aka budget) to adjust and move on. Part of why a traditional budget is "hive-worthy" is the continual sense of failure and self-denial.

    That's just not how YNAB works. You put money toward the things that important to you. It's encouraged to reallocate from lower priority categories once you realize it's necessary. No one can predict the future with certainty, so don't beat yourself up when your estimates are not exactly right.

    Like 3
  • Awww, I totally hear in your voice that you are not digging this! I have so been there! So, YNAB is your friend. It's really going to help you once you fall in love with it (definitely not there yet). And yes, you are going to be in your YNAB a lot more that you ever expected, but it gets fun when you start to get traction. When your money comes in every week you are going to give it jobs. In time you might start to get ahead so much that giving jobs only has to be done once a month, but approving your expenses in ynab is an every day, or every couple day endeavor. I think the real awesomeness comes in working with it daily for a few months, clearing transactions as they come in, watching your budgeted amounts go down (ahhh) and then getting paid and filling back up your buckets (YAY). Payday is like the best day ever when you are using ynab and you get 4 paydays a month!! so fun! Anyway, I'm just hoping to bring a little light to what can feel like a heavy situation and wanted to let you know I have definitely been in your shoes. Also, I am sending the biggest vibes that your hubby will walk WITH YOU on this, because then real magic starts to happen! hugs!

    Like 4
      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 8 mths ago
      • 2
      • Reported - view

      janineanne I'm with Wiecked on this. WE'VE GOT YOUR BACK. Watch the how-to videos, read the help documents. If you start to get overwhelmed, read some journals of how people have turned their financial lives around with YNAB. Take a break, and then come back to it. If you need motivation, if you have questions, if you need shoulder to cry on, we've got you. You're not in this alone. We've all got plans for what our money should do, and YNAB is just the tool to help get it there ❤️

      Like 2
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