Sorry Newbie Question on Income Later in Month
Sorry, this is a real newbie question about budgeting and using YNAB.
I am currently testing out/learning the app after using very basic spreadsheets for years. I am trying to learn and do proper budgeting. I have been watching a few of the tutorials so I am seeing how the app/web page works,.
Before I used a simple spreadsheet which totalled the monthly incomes from me and my wife, and then list all the monthly bills and take one away from the other = in red or black.
So, I have moved to test YNAB after discussing budgeting on a UK Money Forum and it was recommended to me.
I have only inputted one current (checking) account so far to learn step by step. I have included my current balance remaining for April and only 3 bills left to come from that account.
My question though is in April, I have a current balance which isn't enough to cover the 3 bills that will come out. In my spreadsheet I would not be in the red as I have a small regular income that will deposited on the 20th April. Two of my bills come out on the 15th and 17th, and the final larger bill on the 22nd so I will stay in the black and not go over drawn.
So, I have set a goal for all three bills and allocated a budget for the 15the and 17th bill, but if I allocate a budget for the 22nd bill I go into negative budget.
I am supposed to only allocate funds to a bill when money is in the account, not in advance, and just know that the income is coming in and allocate it when the funds appear in my account? I have placed in the account page a transaction dated the 20th to account for this small regular income, but I think I need to change my mindset on how budgeting works.
Thanking you in advance for your advice/feedback.
Yes, your explanation is correct. You only budget the money that you have. So if you only have enough RIGHT NOW to pay for 2 of the 3 upcoming bills, and you will have more money before the 3rd is due, then that's exactly what you do.
And your scheduled transaction for the income is fine also. On the day that it's scheduled, it will show up, and your To Be Budgeted amount will increase, allowing you to fund for that 3rd bill. At that point, you can also fund for May's bills, and make sure that all money needed before your next income will be covered.
You can even make a scheduled transaction for the 3rd bill, so it will come out on the date that it's due.
At some point, you'll be able to work your way up to being a full month ahead, so it won't matter when your money comes in, you'll always be budgeting on last month's income. But for now, that's the way you do it.
OK great. Your last sentence clarified what I needed to know before I even knew I needed to ask it.
With the goal to not live paycheque to paycheque and knowing in April that I can't fully fund the month without the end of month deposit this is paycheque to paycheque.
In May I can start to rework my outgoings to cater for this so that I can build up my account(s) funds so that it covers the full month, and then I can build up further from there.
Oh, I have also just notice on the iOS app that you can get notifications when new transactions come in or you go overspent.
I have not linked YNAB to any accounts, every thing is done manually for the moment, but will the transition I have manually added to the account for the 20th come up as a notification to remind me that it has happened?