Next Month Confusion

Hi all!

 

I’ve been a YNABer for years now, and I’ve always wondered why you can look at future months. I just realized you can allocate money to future months! What's the benefit to funding your budget in the future, versus putting it into a savings category for example? I get paid twice a month, and the same amount every time. 

 

Thanks!

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  • I get paid monthly so budget monthly. I allocate my cash to each category to cover essentials and then allocate funds to my other categories, including savings categories or an emergency fund category. What I could do, if I wished, is take 'surplus' cash and allocate it to next months bills.  Once you have allocated to next month and still have money left to be allocated, you can click into the next month and continue allocating.

    Read more here:

    https://docs.youneedabudget.com/article/230-future-budgeting

    I could well imagine someone who worked a very seasonal job where they get most of their income in one part of the year would find it useful to allocate their budget further ahead to make sure everything is covered.

    On the other hand, rather than build a generic emergency fund category, you could achieve the same end by allocating money you would normally put into your emergency fund against future 'essential' outgoings.

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  • Some people do prefer allocating into the future to see how far their money can go.  I prefer not to, I use a category called "Income For Next Month" where my and my wife's paychecks go into, and when we've received our last paycheck (Either end of month, or beginning of the next month) we move that into TBB and budget the entire month at once.  (If we're at the end of the current month, we move into next month, and budget there)

    The benefit to this is everything is budgeted at once, and you don't have to wonder if your category is low because you just didn't  budget it yet, or because you moved money for rolling with the punches.  The other great reason for doing it a month at a time instead of in the future, is if priorities change (as they inevitably will) you don't have to go into future months to change amounts in your changed categories.

    Also, doing it one month at a time, you avoid the known bug in the software called Stealing From the Future, which can be searched for in the forums for more information about.

    If you're more than a month ahead, then you can keep the money (above what's needed in the IFNM category) in a growing Income Replacement fund.

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