1st of the Month payments, when 1st is on weekend or holiday
Been searching on the best way to handle this in YNAB, as I'm fairly new to using it.. but here's my scenario that I imagine has to have come up for many...
I have a Mortgage and Car payment that I have set up recurring automatic transactions through my bank to pay these bills on the 1st of each month. I'm budgeted a month out so I have funds. But this month, my December 1st payment will be sent on November 29th because the 1st lands on a Sunday.
If I log that transaction on November 29th, it applies to my November budget and I still need to "meet" my December goal for those bills. If I log it with the incorrect date as December 1st, the budget is accurate, but the transaction date doesn't match the bank date.
How do y'all handle this situation? I think it's easiest to just change the transaction date to the 1st when the bank feeds the transaction over, so the budgets look right in the correct months.. but is there a better way?
Alternatively I could leave the transaction as November 29th, the negative number will show in my budget for those items in Nov. since I "overspent", and then just re-allocate those dollars for those budgeted items to something else or throw them back into "to be budgeted" I suppose... but seems a lot easier to just change the transaction date to the 1st and worry about the "date discrepancy".
Any best practices here?
For the occasional instance, I just let the scheduled transaction stay dated on the 1st. The money is there all the same. Doing anything else is just needless busy-work at that point. This approach probably doesn't work well if you import (I don't).
If you routinely pay early (e.g., you have to mail a check), I'd switch to making money available at the end of the month as a matter of course.
I'm in the just fudge-it camp. I also don't autoschedule anything except recurring subscriptions/utilities that pretty much don't change. I know, I know, everyone else does. I've paid my mortgage manually every month since I first bought a house in 2004. I've only recently switched to scheduling on due dates instead of paying on the billing/closing dates, but I'm still way too much of a control-freak to not be the one to push the button myself. :)
If you have the payments set up through your bank's bill pay feature, I'd recommend adjusting the issue date a week or so earlier than the due date. Especially since you've got the funds available and budgeted for those two bills, and have a few weeks to get the change put in place before the end of November.
I do this with my HOA fees; they're officially due on the 1st of the month, but I have my bill pay set up so that it's automatically issued on the 21st of each month. This gives me around 7-10 days of wiggle room depending on how many days are in the calendar month and if there are any weekends/holidays/non-leap year shenanigans that might delay or alter the time it takes to clear the bank.
For example, my November fees (due 11/1) was issued on 10/21 and the payment actually cleared my checking account on 10/23. I use the cleared date as the official "transaction" date, since that is what will be on my bank statement as when the funds were withdrawn.
This way my payment always hits prior to the due date, but within a single budgeted month so I don't have a weird "double" payment month, like you're running into.
I don't understand why pulling payments early is a thing. Every single one of my pre-auth payments that falls on a holiday or weekend will process the NEXT business day, not before. (Most of my pre-auth payments are every Friday, biweekly Wednesday with only a couple being on "dated" payments as opposed to weekly/biweekly so it doesn't affect me much.)
I still get unrealistically nervous assigning the dividends to categories, but I know the money actually exists, even if I hope not to withdraw it for a while.
I think you'll get comfortable with it in time. 🙂 What's really scary is assigning increased/decreased equity values which, as you know, can fluctuate wildly and are not actually realized until you sell them. But like I said, I have one category that can handle the swings.