Budget Using Only One Month's Income

Having used YNAB 4's "Income for this month" and "Income for next month", I feel like I'm at a loss since moving to nYNAB. 

I get paid on the 15th and 30th so in YNAB 4, I would put both of those paychecks in "Income for next month" then on the 1st, I can use that money to budget everything. Then during the month, if I'm moving money between categories, it was really easy to make sure I'm only spending last month's income by making sure "To Be Budgeted" is zero. If I'm under budget, it'll be positive and if I'm over budget, it'll be negative, all without affecting spending or categories for any other month.

With nYNAB, I find this workflow no longer works. I understand that it's trying to make your money more fluid by removing the monthly walls but I feel like I'm in less control than before.

For example, if I'm budgeting after my mid-month paycheck, "To Be Budgeted" now contains both last month's incoming as well as income which is slated for next month. This means I can't use it as an indicator of whether I'm over or under budget and makes it really easy to use money that's suppose to be for next month. 

In another words, I think of income as buckets. In YNAB 4, each month had its own bucket and that helps your control spending because the software makes it easy to only use a single bucket per month to fill your envelopes. 

In nYNAB, all of the income goes into a single bucket and with that, it makes it hard to only use one month's worth since there's no way to divide it up.

I understand that some people create their own "buffer" category where income goes but I feel like this just adds extra friction and a risk for errors.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 11 mths ago
      • 4
      • Reported - view

      I wouldn't prefer an all or nothing type toggle. I would prefer to be specific about which month I send income to. This is particularly important if you do Paycheck splits to track various payroll deductions. The deduction expense will be in the current month regardless of which month you send income to.

      And why should one-off income events be automagically forced into next month? That $10 birthday check from grandma that comes in once a year doesn't need to wait till next month.

      Like 4
  • Very late to this party, but as a new YNABer, I inadvertently discovered the 'stealing from the future' issue the second day I used the program! When I first imported my accounts I had enough money to fund the current month, and after reading and listening to everything I could get my hands on about the "right" way to budget (aging my money), I decided that since I always pay my CC bills off in full every month and still had leftover money, I should start budgeting for next month because every dollar needs a job. So I budgeted next month with the excess funds, keeping track of what categories I had already budgeted for in May. The next day, I realized I forgot to budget something for this month, so I added a category and the appropriate amount I wanted to budget for it. I fully expected this month's TBB number to immediately turn red, which it did not! Confused as to why it hadn't, I contacted support and was told that it didn't turn red because it had taken money away from May to fund that new category in April. What???? Why would it do that? Without even asking me if I wanted to do that? Or at the very least, notified me of what it had done. What if I had wanted to simply move money from another category in April to fund it? This still makes no sense to me and really bothers me.

    After spending hours reading these forums, I see I'm not alone. I quickly thought  maybe YNAB is not for me, although I love the idea of the categories and moving things around, but maybe it was more for people who were starting out in debt. Granted, I have never formally budgeted for anything  in my entire life, (pls don't yell at me. Better late than never) but I'm also not in debt. My kids are grown, and I'm going thru an  amicable divorce, but my financial picture has changed drastically since we were together, and I realized that I needed to start a plan regarding my spending., which can get a little out of control at times. The fact that I can't natively budget for next month is driving me nuts. I don't want to see the positive TBB number in the current month, but due to this stealing from the future issue, I also don't want to start budgeting for next month, particularly since I won't be able to cover all of next month until my next paycheck arrives in a few days. I've been reading about setting up a category called Income for Next Month (or something similar) and dumping all the incoming money from this month into it. So here are my questions about that:

    1. is there some way to automate this so it automatically gets classified into the Next Month category or do I need to manually categorize each transaction as it appears? (I have direct deposit on almost everything and my accounts are linked to YNAB)

    2. If I do nothing with the money that accumulates in the Next Month category, won't it roll over to the next month?  Do I then move it all to the TBB category so I can parcel it out for that month at that point? And then have the new funds in May be diverted to Next Month's category again?

    3. Does doing this mess up reporting in any way? I want to start getting a handle on how much income i have coming in and when (using YNAB reporting if I can). If the money first comes in and is categorized as TBB in the current month and then once again when I move it over to TBB in the following month, will YNAB count that income twice? 

    Thanks for any help with this. I'm trying to wrap my head around the best way to set this up for me. Every time I think I have it figured out, I don't!

    Like 1
      • jenmas
      • jenmas
      • 11 mths ago
      • 1
      • Reported - view

      KnitPurlKnit I have a category called "Income for Next Month". All of my paychecks are automatically categorized to that category via scheduled transaction (ie they don't run through TBB). When I am ready to budget for next month (basically when I receive my last paycheck of the month on the 22nd), I change the categories on those transactions from Income for Next Month to Inflow: TBB. That keeps reports clean and holds the money in reserve until I am done budgeting for the month (after years of YNABing, on the 22nd of the month, I'm going to at most be moving stuff from one category to another within the same month, not be creating new categories).

      Like 1
    • jenmas I tried this using money that came in today. Rather than sending it directly to TBB, I had it categorized as Income for Next Month. Then I  looked at my April budget and it showed the money in the Available Column, but not in the Budgeted Column. Is that the way it's supposed to be? If I do it that, it doesn't show up as income this month in the report. When I move it over to TBB next month, does it then show up as income?

      Like
      • mamster
      • mamster
      • 11 mths ago
      • Reported - view

      KnitPurlKnit The transaction won't show up as income until you recategorize it as Income: TBB at the time you're ready to budget next month.

      Like
      • dakinemaui
      • dakinemaui
      • 11 mths ago
      • 2
      • Reported - view

      KnitPurlKnit The INM category is just a temporary holding place. Like any category, stashing money there shows the balance in the Available column. In order to budget it, you have to take it out of the category. There manner in which you do that should match how it went in:

      If you put it in via categorization in the transaction, you should edit the transaction to make it TBB -- typically at the end of the month (or even a few days into the month if you don't get around to it). SfTF is not an issue because th at money is needed "now".

      If you put it in via a budget entry, you should take it out with a budget entry. Some will delete the entry at the end of the current month, allowing it to flow forward. Again, at this point this is "now" money, not future money so SFTF isn't a concern.

      In either of these approaches, there is a danger with late posting transactions showing up in last month. Be very careful with any adjustments to last months budget -- SFTF is possible.

      To absolutely prevent SFTF, budget funds to INM, then negative budget that category *in the new months area* to move them to TBB (or use the Move Money Tool).

      Reports are based on the transaction date and category. They are temporarily incorrect if you use the first approach (categorize to INM) but are correct after releasing the funds (editing the transaction).

      These variants differ primarily in the amount of manual effort they require. I have quite a few income events, so I use the categorization approach. It also keeps the "Budgeted" header correct (focused on the current month).

      None of these approaches is perfect, so pick one to your the least pain for your particular situation.

      Like 2
  • I try not to over-complicate things. When I have an income event, I categorize it as TBB, then I go and add that amount to the budgeted column of my "Income for Next Month" category. At the end of this month, I zero it out and let the money get sucked into the next month when the clock strikes midnight. Then I can flip to the next month, click "Budgeted Last Month" in the quick-budget options on the right hand side, and make any adjustments needed. That may mean removing some money from some categories if my TBB went red, or if there's still money in TBB, it'll get budgeted to "Income for Next Month" again, to patiently wait for the monthly turnover again.

    On point #3 above, no, the money doesn't get categorized more than once. The income event gets categorized once and then that money is allocated in the budget. It doesn't care if you allocate it to "guns n' butter," "widgets" or "income for next month", it's all the same to YNAB.

    Like 3
  • I budget a full month ahead.  I'm not paycheck to paycheck.  All I do when I get paid is flip forward to the next month and if I feel like it at the time, I'll start filling my categories from the top down.  If I don't feel like it, I'll throw it in the next unbudgeted category and come back and deal with it later.  Yes, I'm aware this puts me at risk for "stealing from the future"  but I believe once you are aware the potential exists its not that big of a deal.  I'm generally taking a look at next months budget fairly regularly and I don't generally need to wam much until close to the end of the month. (I do believe it is a big deal that ynab needs to fix, just not for me individually)

    Like
  • KnitPurlKnit said:
    I realized I forgot to budget something for this month, so I added a category and the appropriate amount I wanted to budget for it. I fully expected this month's TBB number to immediately turn red, which it did not!  ...B ecause it had taken money away from May to fund that new category in April... What if I had wanted to simply move money from another category in April to fund it? 

    A standard response you'll hear from defenders of this functionality is that, if you wanted to move money from another category in April, then you should have restricted yourself to using the "Move Money" dialog box rather than directly inputting an amount in the budgeted column.  The "Move Money" dialog neatly avoids the Stealing From the Future issue by ensuring funds are moved between categories within the same month.

    However, I find that workflow rather limiting and clumsy. I often want to move money between multiple categories and not just one-to-one. To me, it's faster, more intuitive, and requires less mental-math to temporarily over-budget (= cause TBB to go negative) and then make adjustments until TBB returns to $0. But this technique doesn't work when you have funds budgeted in the future. (And that's a big reason why I refuse to budget in the future.)

    TLDR; If you prefer to continue budgeting in the future, consider restricting yourself to the "Move Money" dialog to avoid SFTF bug. If you find that too limiting, then you should probably avoid budgeting in the future and adopt a category-oriented workaround.

    Like 3
  • Thanks to all of you that took the time to explain how this works. After fooling around with it for a day or two, I think the best way for me to move forward is to not budget in the future and put this month’s income into a holding cagtegory which I will move over to TBB at the beginning of the next month. My only reservation about this approach is that my bank automatically receives a fair number of ebills every month, so I know quite a bit in advance how much, say, my electric bill is going to be the following month. I usually set up the payment for those bills as they come in, telling the bank to pay them on the day they’re due. When I did that this month, I then went to YNAB and entered those payments into the budget column for May, thinking to myself “oh I got this down pat”! Thats when I got smacked with  SFTF . Going forward, if I need to take money from one category to another in the current month, I’ll remember to use the ‘move money’.

    YNAB seemed so simple when I first looked at. But there are pitfalls easily encountered until you find your way around how the software thinks. All in all I think it’s going to work well for me once I find  the combinations that work for me.

    Thanks again. This seems like a great support community.

    Like 4
      • dakinemaui
      • dakinemaui
      • 11 mths ago
      • 3
      • Reported - view

      KnitPurlKnit Another tip - it's very helpful to strive to normalize your budget entries across time. Decouple the demand on your budget from the fluctuations in actual transaction amount. This was nearly as transformational to me as living on last months income.

      I budget the monthly average in variable categories (1/12 yearly total, computed near tax day) which builds up a surplus in the low months that is consumed in the high months.

      A consistent budget demand allows better planning throughout the budget. I don't have to scramble, cut anything else back, or even think about it at all when I get those huge summer electric bills.

      I do this for the various utilities, but also petrol, kids activities, and anything else that may significantly vary over the course of the year.

      This is really just applying Rule 2 (True Expenses concept) when you think about it. As is typical, you may have to budget more than "nominal" when starting out, depending on the timing. The simple rule is to budget the average, but cover any eminent overspending once you know the billed amount.

      Like 3
  • dakinemaui said:
    I budget the monthly average in variable categories (1/12 yearly total, computed near tax day) which builds up a surplus in the low months that is consumed in the high months.

     Light bulb moment! This is an awesome concept. Thank you for passing it along. It will probably take some work on my part to gather up all of last year's bills for each category but well worth the effort. Once computed, I can assign the goal to each month, knowing the funds will always be there regardless of the amount of the monthly bill.

    Like 2
      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 11 mths ago
      • 1
      • Reported - view

      KnitPurlKnit dakinemaui

      For some things, I will add about 10% divided over time to help cover any increases in cost or over usage.  That way, if the cost of that category item goes up I'm not left (as) flatfooted.  Any surplus when the bill or purchase comes around will decrease my 1/12th monthly target for the year after.  Taking inflation into account is also important for long term sinking funds as well.  If I'm saving up for new windows, I'd rather have a bit too much saved than have the cost be 15% more than I'd estimated 5 years ago because I used 2014 prices to determine my goal.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 11 mths ago
      • 1
      • Reported - view

      Technicolor Cheetah I do that by using running 12 month averages and then bumping them up. After awhile it normalizes but gives you room for inflation.

      For expenses that fluctuate seasonally, I calculate my budget amount as the average amount spent in the previous 12 months, and round up to the next $5 increment. Additionally, I have put a cap on the category equal to the 12 month average  + the sum of any amounts during those 12 months above the average. I also round up that total.

      The caveat to this is when you are starting in YNAB with these seasonal categories. Gas prices are higher in summer than winter, and often people drive more. If you only have electricity, then you will see highest usage in the coldest and warmest months. But, for example, if you use natural gas for heat but electric cooling, your gas bills will be highest in winter, lowest in summer, and vice versa for electricity. If you start funding in YNAB during a low cycle and budget the average, you will have enough at the peak. But if you start during the peak, you'll need to fund at peak levels and not average levels until usage declines or you won't have enough in the category.

      I use a spreadsheet to do the calculation and update monthly when the bill comes in. For gas/electricity, it goes back to when we moved into this house. For car fuel/transit (Mrs. nolesrule often takes the train), I have records going back to when we started using YNAB 5 years ago. It's pretty easy to do in a spreadsheet. You just need the following columns.

      A = MM YYYY
      B = Actual spent
      C = Average of last 12 months = AVERAGE(range B for current cell and previous 11)
      D = Budget Amount = CEILING(B thisrow,5) Or use whatever number to round up in the second parameter

      E = Category cap
      F = Budget month for D and E values =  EOMONTH(A this row, 1) (formatted to MM YYYY)

      Category cap is the tough one and I use the following formula

      =CEILING(SUMIF(range B for current cell + previous 11 cell,">"&C this row)-(COUNTIF((range B for current cell + previous 11 cell,">"&C this row)-1)*(C this row),5)

      What this does is sums up all amounts spent in the last 12 months only in months over the 12-month average and subtracts the 12 month average * number of months above average - 1 (in order to add back in one month's average amount) .... then rounds up to the next $5.

      I am considering combining natural gas and electricity because they are cyclically opposite, which would make for one relatively smoother category. It would result in a smaller budgeted amount but a higher cap.

      For a percentage, instead of CEILING, you can multiply by 1.x).

      Like 1
      • dakinemaui
      • dakinemaui
      • 11 mths ago
      • Reported - view

      nolesrule I look at the cap from a drawdown view. The pessimestic case is if all the "high" months came due in sequence (though perhaps fairly realistic for some utilities). The average is taken care of by the budget entry each month, so the sum of the "overages" across 12 months is the required cap. Evaluate whether a category exceeds its cap after you've paid the current month's bill for simplicity.

      For example, my summer water bills typically exceed the average. If those bills are $100, $200, and $50 above the average, the cap is $350. If I'm sniffing around for money to reallocate, anything over $350 is fair game to take from that category.

      I believe the final value is equivalent to yours (your "extra" month is handled by checking it after paying the bill), but certainly very similar if not. I don't bother with a spreadsheet, but instead just look at the Expense report, add up all the few "high" months on a calculator, and subtract off the average * the # of high months.

      Definitely agree with bumping up the budget entries slightly from the average for inflation or life-style creep.

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 11 mths ago
      • Reported - view

      dakinemaui It's the same math. I just do it for the start of next month rather than the end of this month, so the cap is overage + budget.

      I use a spreadsheet because it just means typing in 1 number in a new row and it's all calculated out. I update each month to more accurately account for fluctuations in the underlying rates without having to actually pay attention to them. Right now I just round up the numbers to the next $5 increment, but I might switch to using 5% with a round up factor (I like clean numbers). In that case I'd use  CEILING(Calculated  Amount *  (1 + pct increase),5)

      And yes, I know it's what you do. I got the idea from you, and just applied in my own way to match how I want to manage my budget. For capped categories, I like to calculate my start of month with cap. So it keeps it homogeneous with my Monthly Funding to a cap categories . 😉

      Like
  • I have to say I'm with nolesrule on this one. I completely bought into the principle of living on last month's income, with YNAB4 made it very easy to track. The irony is that I learned that principle from YNAB. I still credit YNAB for teaching me this, and am genuinely appreciative, but I am also puzzled why YNAB would walk away from this very approach. Yes it is subjective, but you have a lot of customers on this thread saying the same thing. Seems like it would make sense to listen. 

    YNAB online is still better than any tool I have found, so I continue to use it. In the meantime I have adopted the workaround of creating a category named "Available next month" where I stash income until the end of the current month. But that workaround seems to render the standard YNAB stats at top of the budget screen meaniningless.  (Income in [last month], Funds for [this month], Overspent in [last month], and Budgeted in [this month] all seem to be meaningless when using this workaround.  

    Like 3
      • jenmas
      • jenmas
      • 8 mths ago
      • 4
      • Reported - view

      Cornflower Blue Boa One way to fix that is when your paycheck comes in, categorize it directly as Available Next Month rather than as Inflow:TBB. Then when all the income has come in, change the category to Inflow:TBB. So yes, during the month the header info will be wonky, but once you are ready to budget, it will be more accurate.

      Like 4
      • RIP_MSMoney
      • FinTech Programmer
      • rip_ms_money
      • 6 mths ago
      • Reported - view

      jenmas If you go that route, does it mess with other reports?

      Like
      • jenmas
      • jenmas
      • 6 mths ago
      • 1
      • Reported - view

      RIP_MSMoney Nope because I change the category back to Inflow:TBB after all the money has landed. I mean I guess if I looked at October reports today it would be off because my Oct 7 pay is currently categorized as Available Next Month but by the end of the month I'll change it back to Inflow:TBB and there's no real reason to look at the October reports until the end of the month.

      Like 1
      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • Reported - view
      jenmas said:
      during the month the header info will be wonky

      On a pedantic note, I'd make the case the header is actually correct during the month. Prior to release (i.e., recategorization to TBB), Funds for October does not contain the new money that is meant to be used in Nov. The header will be incorrect after the release because then Funds For October will then contain money budgeted in Oct and received in Oct. (The latter, of course, is budgeted in Nov.)

      FWIW, I tend to ignore most of the header, paying attention only to TBB & BIF in the current month -- both of which should be $0 unless I've just released next month's money -- and Overspending in next month's area.

      Like
      • jenmas
      • jenmas
      • 6 mths ago
      • Reported - view

      dakinemaui I figured out what I think is weird in the header. In September it says Funds for September = X. X is equal to Budgeted in September plus Budgeted in Future (ie October). Also X is equal to about twice my take home pay (which makes sense because the funds budgeted in Sep plus funds budgeted in Oct). So right now Funds for Oct is equal to what the Sept header says for BIF. And when I get paid on the 22nd and budget for November, the Funds for Oct will shoot up. So it's really just a useless number that I ignore.

      Like
      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • Reported - view

      jenmas Right. Funds For <month> is correct during most of that month. After transactions get into TBB, FFM will be forever... wonky. 😋 An inescapable consequence of the flow-forward logic.

      Odd thought: what is the noun form of something that you ignore? It's not "ignorance", but that's all I can come up with off the top of my head! WordTenor thoughts?

      Like
  • Well I converted from YNAB4 to nYNAB over the past couple weeks since YNAB4 doesn't work on the latest Mac OS and I'd like to upgrade.  It is only now, as I got a paycheck, that I see this issue of recording income.  I was kind of wondering when I saw the TBB in my test budgets.  I really enjoyed YNAB4 and its Income This/Next Month feature.  My spouse and I sit down once a month to budget our money earned last month.

    It reads like this issue has been around a long time.  Boy I really, really, really wish there there could be a setting to turn on/off for those of use that like this/next month capability.  I've been a huge fan of YNAB software since YNAB4 was launched and have told many people about it.  

    I'd like to keep supporting YNAB, especially now with a yearly subscriptions, but it would be easier to do if it contained one of the main features that made budgeting what I think budgeting should be - earn this month, spend next month.  

    Any hope?

    Like
  • Salmon Colt said:
     Boy I really, really, really wish there there could be a setting to turn on/off for those of use that like this/next month capability. 

    ...

    Any hope?

     I don't think so. I'd suggest getting used to the new TBB mechanics.

    There are some good suggestions on this discussion about how you can manually recreate the YNAB4-style "Income for Next Month" workflow using categories and a few manual steps each month. I find it worth the (minimal) effort, because like you, I think that workflow is an essential part of what made YNAB-4 great.

    Good luck!

    Like 5
  • Thanks bret  for the encouragement.  Will certainly try a couple suggestions here.

    Like
  • A little late to the party here....  I've been a loyal YNAB user since the early days.  I have been on YNAB4 now since it came out and have refused to move to the online version simply because I don't want to pay a 100$ a year for a product I already own outright.   But the year is 2020 and I thought, maybe I should give it a try.  

    I'm currently in my free trial and while I like the new look and the ability to sync my budget on my phone, the first thing I noticed is the missing "budget for next month" category.  As nolesrule  reiterates over and over again in this thread, this category is the critical vein of this software.   Without it, YNAB has no value to me.  And certainly not worth the infinite subscription fees.   I will have a closer look at this workaround, but my gut feeling is a move back to YNAB4.  

    Like 1
    • Steel Blue Dragon I only ever used the current YNAB, so had the advantage of not knowing any different, and learning about a holding category together with getting to know the YNAB rules and system.

      But maybe it can still be of some help knowing that using this months income for next month is just a routine, like all else you do in YNAB.

      I understand from long time users it used to be different. And I think I myself would have a hard time switching from a previously paid for program to a subscribtion if it forced me to change my routines. So I praise myself lucky I came after that, am just only very happy I found YNAB and didn’t have to get over the bump of change.

      If you do get used to a new routine with a holding category: it really is a wonderfull program! The app helps a lot as well! Good luck.

      Like 1
    • Steel Blue Dragon I'm working through my first full month on YNAB online after using YNAB4 for years!  Overall I like the convenience and ease of importing transactions.  One of the new routines proposed was to create a category for income fo next month and then do some recatagorization at each. month cross over.  So far I'm feeling good with this though I have a little over a week to go before I practice this some more.  

       

      I didn't want to jump to subscription either, but now that I am here, so far I am happy.  

      Like 2
    • Powder Blue Pony Salmon Colt   Thanks for your feedback folks.  Much appreciated.  I've seen the workaround and I'll give it a go!  

      Like 1
      • Cirrus
      • Living mobile and solo
      • miriamnz
      • 1 mth ago
      • 4
      • Reported - view

      Salmon Colt I used a holding category for money to use next month. I kept an anxious eye on the total in there, never quite sure if it would get to the right number.

      Then I tried budgeting in the next month instead, just to see how that worked for me.

      Once I had sorted my rules I have found it much much better to budget in the next month.

      My rules are: 1) once this month is budgeted it get no more income into it. None. All adjustment/WAMMing has to be between categories.  2) ALL income goes into next month.

      As money comes in I start budgeting categories from the top down in the next month. I order my categories to make this sensible. Most important at the top.

      What makes this good for me, living on a very tight budget, is that I know how far down next month is funded and how much isn't, so this keeps me very mindful of how I spend this month.  It also reminds me what is important to me -- what I budget first etc, and keeps me aware of the things that only get $ if there are $ left over.

      So I changed from a process where I had an underground anxiety ( will I have enough for next month?) to one where I knew exactly what I had and needed for next month. I had not been aware how much anxiety that was causing me until I tried the other method.  But I had also got a month ahead a couple of times and then lost my month ahead,  by putting new money into the current month. It s very hard to get that month head money again.

      Its not truly logical -- I could be worrying about having enough to fill the categories next month in the same way I worried about would there be enough to budget the whole month out. Sometimes you just have to try things and see how you feel, and do what feels best.

      If your income is comfortably more than your every-month expenses, this is all less of an issue. But when its all very tight it can make a big difference.

      Like 4
    • Cirrus I recognize that! For me there is a difference in anxiety because keeping ALL of this months income for next month gives clarity. That's just how much there is. No more. Same for this month: just what I budgetted. If things change I will take it from an other category. No need to worry about things that are cristal clear.

      When I take a little from income when it comes in I worry if there will be enough for next month. 

      Thanks for putting it into words! The recognision made me realize I really should stick to this routine! 

      Like
    • Powder Blue Pony PM: I do use the holding category but need the rules about not touching this months income just like you. 

      Like
  • Cirrus said:
    All adjustment/WAMMing has to be between categories. 

     This is the part where the plan can go wrong. There are a myriad of ways that money can be moved between categories both intentionally and accidentally that fall prey to Stealing From the Future.

    And personally my favorite method of fixing overspending involves allowing TBB to go negative when fixing the category, and then removing money from categories piecemeal rather than a direct 1 to 1 to get my budget back where I want it. This is not possible when budgeting money directly into future months.

    Like 2
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      nolesrule Sure it is.  You may not like the implementation but it is definitely possible to do the workflow you are suggesting.  To suggest it isn’t is disingenuous. 

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 2
      • Reported - view

      briefcase please explain how to accomplish this that does not involve flipping screens frequently to check future TBB balances.

      I grow weary of the apologist stance on this issue. It's been 4 years and not fixed. 

      Like 2
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      nolesrule First, you didn’t apply any caveats to your statement.  Second, no one cares what you’re growing weary of.  The rest of us are growing weary of the ninja posts everytime this comes up. 
       

      The point is that your workflow is possible in the software despite your assertion that it isn’t. 

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      briefcase Since you didn't answer my question, I'll assume you don't actually have an answer.

      Read the post of the person I was responding to you if you need the full context. I wasn't going to quote the entire thing. The person's plan included budgeting directly into the next month, and ignored the effects of Stealing From the Future.

      SFTF is a real thing, and it affects people every single day. There are more places where YNAB is discussed than here on the support forums, and I'm having to explain it to people who have run into it in their own budgets (and not just as a theory) at least 2-3 times a week.

      So if I continue to bring it up, it's because it's a bug that still needs to be fixed. I'm trying to help people from making this mistake and costing them real money. People who try to shut me up are just part of the coverup and ignoring the fact that there can be real consequences.

      Like 1
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      nolesrule LOL coverup.  That's right, there's a giant conspiracy involving SFTF and you're the voice in the wilderness.

      Like
      • dakinemaui
      • dakinemaui
      • 1 mth ago
      • 5
      • Reported - view

      briefcase As long as new users continue to have issues with this design flaw, people who can empathize with them can advocate for an improved product.

      Like 5
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      dakinemaui Sorry, but being empathetic does not involve being belligerent, so no I do not agree that what noelsrule is doing is constructive.

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      briefcase They were handed a viable solution years ago and for some reason have chosen not to implement it. Heck, they even could have implemented the Toolkit's warning, which probably is an even simpler update. But they didn't.

      This has gone beyond negligence, and they need to be reminded that a change is necessary.

      And when someone recommends budgeting directly into a future month, the reason I counter that is precisely because I still encounter people scratching their heads about Stealing From the Future after it has already bitten them. People who recommend budgeting directly in the future either know how to watch out for it or aren't aware of it. If they don't mention it when recommending budgeting into future months directly, it implies they aren't even aware of the issue.

       

      The fact that we still have to explain this bad UI experience to new users on a weekly basis 4+ years after launch makes me angry because it's dangerous. It should make everyone angry. Why doesn't it make you angry?

      Like 1
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      nolesrule 

      1.  Because I have better things to be angry about
      2.  Because it's in their documentation, help videos, live classes, and so on and so on
      3.  Because I don't work for YNAB support and neither do you
      4.  Because I have better things to do than make myself the center of attention on the YNAB forums
      5.  Because I have been using the software 100% since launch in 2016 and have never once been negatively impacted by this in such a way that it wasn't obvious what was going on and how to fix it
      6.  Because I understand the basics of cause and effect

       

      I recommend budgeting into future months, and the fact that I don't mention this absolutely does not imply that I'm not aware of it.  I use the software how the documentation says to, and so far it's working pretty great.  I used YNAB4 the way the documentation said to, and it was pretty great, too, but its time has gone.

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      briefcase Got it. It's the old "it's not a problem for me, so it's not a problem" line. Since it's not a problem for you, perhaps you should move along and stop criticizing me for actually trying to help people.

      Like 1
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      nolesrule It's pretty short sighted to ask me why I am personally not angry about the issue and then say that as a response when my answer is personal in nature.

      Like
      • briefcase
      • A rack of ties, a travel mug, telephone, briefcase filled with papers
      • briefcase
      • 1 mth ago
      • Reported - view

      nolesrule Also,  no, you are not helping people, you are insisting that your personal view of the product is the correct one, and that's way more dangerous than SFTF will ever be.  I don't believe you to be a helpful person based on your past comments and behavior on the forums, this one and the old one.

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

      🍿

      Like 4
  • Cirrus said:
    My rules are: 1) once this month is budgeted it get no more income

    A workflow that is optimal for those who push ALL their income into next month isn't optimal if you cannot do that. It's not surprising that didn't work for you.

    There are variants, however, using the holding category that cater to users who split income between months. Most notably, they also prevent SFTF.

    On the flip side, I strongly urge anyone who budgets directly in next months area to install the Toolkit Extension (which provides a warning). At the very least, leaving $1 in TBB indicates when SFTF has occurred, assuming cash overspending is not present.

    Oh, and submit a feature request to implement an indication future budget entries are not backed by cash.

    Like 2
  • le

    nolesrule said:
    This is the part where the plan can go wrong. There are a myriad of ways that money can be moved between categories both intentionally and accidentally that fall prey to Stealing From the Future.

     Ok, thanks for this. I've been reading up on SFTF. This hasn't happened to me so far, so it was a new perspective.

    • Seems like if I use the Move Money tool I avoid SFTF. Because ynab gives me the list of current available $ in the current month's categories.
    • I'm still vulnerable to SFTF, because I could move money in other ways, without thinking.
    • Keeping $1 in TBB is a way to give myself a visual warning that SFTF has happened, though I have to remember to keep checking to make sure it is still there. I guess that could get to be automatic.
    • There's currently nothing in YNAB to help me with this, other than the Move Money Tool.

    Budgeting in the next month has been so good from a thinking/feeling perspective, I'm likely to stick with it. But now I am aware of the vulnerability this lands on me so thanks for that.

    Like 3
  • Cirrus said:
    Budgeting in the next month has been so good from a thinking/feeling perspective, I'm likely to stick with it.

     I totally get the appeal of direct budgeting in the future. Covering next month's "Groceries" or "Rent" is more satisfying than filling a generic "money for next month" bucket. And maybe you'll be less tempted to steal that money when you've given it specific jobs. If so, great!

    The real problem I have with future-budgeting is that it doesn't scale well as your finances improve. Right now I have enough cash-on-hand to fill budgets through July. How should I budget the paycheck that I expect to receive this Friday? Start chipping away at my August expenses? And what about the handful of minor interest dividends and credit card rewards inflows I receive throughout the month? Keep budgeting those further and further into the future? And what happens when my priorities change, and I have to make cascading changes across multiple months?

    It seems like SFTF gets lots of attention: It's a nasty "gotcha" for new users, and YNAB deserves plenty of criticism for failing to address it (four years, WTF?!?)  But even if SFTF was fixed, I doubt future-budgeting would hold any appeal for me. YMMV!

    Like 2
      • Cirrus
      • Living mobile and solo
      • miriamnz
      • 1 mth ago
      • 1
      • Reported - view

      bret Yes, I think when money is not tight everything changes. Most months I am not able to fund all my categories. I keep those rarely-funded categories there for the times when a bit of extra work brings in some extra money, and because its really helpful to know exactly what I *can't * afford as well as what I can.

      I do think there is a major difference in budgeting when money is tight and when it isn't, and that the  4 rules impact differently. For me, with 'real' scarcity, the prioritising that happens when I have to WAM really does good work in my head to help me sort what is truly important. But if I could fund all categories for this month, next month and several more (if I had a mind to) no prioritising is necessary. Make a new category stick some money to it and and then think about what to do with the rest of the $. Artificial scarcity needs a really good and big life goal to make good sense and provide motivation. I suspect there might by a better tool than ynab needed for that, though clearly Jesse doesn't think so, or hasn't thought so yet.

      Like 1
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 1 mth ago
      • Reported - view

      Cirrus I dunno, I think there will always be a need for prioritizing unless you're a multi-millionaire or billionaire without the taste of someone of that net worth.

      Like
  • bret said:
    The real problem I have with future-budgeting is that it doesn't scale well as your finances improve. Right now I have enough cash-on-hand to fill budgets through July. How should I budget the paycheck that I expect to receive this Friday? Start chipping away at my August expenses? And what about the handful of minor interest dividends and credit card rewards inflows I receive throughout the month? Keep budgeting those further and further into the future? And what happens when my priorities change, and I have to make cascading changes across multiple months?

    You really ought not be sitting on that much cash. That paycheck you speak of would go into my off-budget savings/investment account.

    I have three months (this month and two in the future) of expenses available as cash in a high-yield [3%] checking account that are budgeted for in YNAB4 and three more months available with credit (that are not budgeted since the credit card is a negative balance account) for six total months of possible zero-income living.

    Any cash overflow is transferred out of my high-yield checking to be invested according to my investment policy statement in various equity funds, bond funds, and money market funds. These accounts are off-budget so I don't wind up with a 7-figure TBB and that cash isn't sitting in a checking account losing purchasing power to inflation. 

    Like
      • gte037p
      • User since 4/2011
      • gte037p
      • 1 mth ago
      • Reported - view

      kevinf Which bank do you use for that 3% yield checking?

      Like
  • kevinf said:
    You really ought not be sitting on that much cash. That paycheck you speak of would go into my off-budget savings/investment account

    I'm not a big fan of investing my emergency fund money. For one thing, I need that money to be fairly liquid so I can access on short-notice. More importantly, if the economy tanks and I lose my job, the stock market (and the value of a market-invested emergency fund) is also likely to tank. A double whammy! Not a risk I'm willing to take with our family finances.

    I do keep most of my (on-budget) cash in 1.5-2% APY FDIC-insured savings accounts and CDs to offset our inflation losses.

     

    However, even 3+ months of future YNAB budgets sounds like a major headache to manage. It might help if the UX was better and presented multiple months side-by-side, instead of forcing users to navigate back and forth. But that still wouldn't address the hassle of budgeting each inflow as it arrives (paychecks, interest, rewards, etc.) -- budgeting paycheck-to-paycheck just doesn't appeal to me. Much easier to reason about things in whole-month chunks.

    Like 4
  • Cirrus said:
    But if I could fund all categories for this month, next month and several more (if I had a mind to) no prioritising is necessary.

    I couldn't disagree more! Prioritization remains vitally important as your wealth grows. YNAB is a fantastic tool for growing and maintaining wealth.

    The rules of personal finance don't change as your finances improve, but the scope certainly does. You stop fretting about the timing of each bill or paycheck and look more holistically at months (or years). It's macro-budgeting instead of micro-budgeting.

    Off the top of my head I couldn't tell you when any of my bills are due (they're all auto-paid). But I can absolutely tell you how much I spend on bills on aggregate, and I certainly fight Verizon tooth-and-nail anytime they try to sneak a bullshit fee in there. 😉

     

    Cirrus said:
    Artificial scarcity needs a really good and big life goal to make good sense and provide motivation.

    I have plenty of "artificial scarcity" in my budget! 

    All of my money has (important!) jobs. There's money for vacations we plan to take this summer. Appliances we expect we'll need to replace in the next few years. Car repairs that'll be needed sooner-or-later. And a large pile of money in an "Income Replacement" category just-in-case my wife or I lose a job.

    And one of the coolest things about "budgeting using only one month's income" -- the title of this thread -- is how it creates yet another kind of artificial scarcity: At the beginning of each month, I only allow myself to work with a fixed, finite amount of money. I don't touch the new money that arrives during the month. I can only solve this months problems (overspending) with the money that I had at the beginning of the month. That scarcity provides clarity.

    Like 6
  • Cirrus said:
    But if I could fund all categories for this month, next month and several more (if I had a mind to) no prioritising is necessary.

    I don't find this to be the case at all. The money that would let me fund 6 months out is my Loss of Income fund. If I use that for this month, it's obviously not available for use while I look for another job. It's precisely because I've prioritized that i don't fund all categories.

    Like 3
  • bret said:
    I'm not a big fan of investing my emergency fund money. For one thing, I need that money to be fairly liquid so I can access on short-notice. More importantly, if the economy tanks and I lose my job, the stock market (and the value of a market-invested emergency fund) is also likely to tank.

    You should research money market funds. Your principal is maintained (the balance will never be less than you deposited) while the yield varies. Vanguard's Treasury Money Market invests in United States Treasurys which are backed by the full faith and credit of the US government. Your money is as safe as possible. Plus, since the underlying security is Treasury bonds, your interest is State tax exempt unlike your bank. The Treasury Money Market has a $50,000 minimum deposit, but once you've met the minimum, you can withdraw as much as you want as long as you maintain at least a $1 balance. If you can't meet the minimum, you can keep money in your settlement fund with no minimum. The settlement fund is a Federal Money Market fund.

    Either way, your money is highly liquid and can be moved with a simple transfer that clears within one to three days depending on your bank's transfer policies. If you have months of cash on hand, a few days to move money is not a problem.

    If none of that appeals, you may be able to create a secondary deposit account with your bank that you can transfer overflow to and mark that account as off-budget to keep you TBB/e-fund within reason.

     

    Re; gte037p... My local credit union offers 3% APY in checking accounts. It is unlikely you would be able to make use of it, sorry!

    Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      kevinf A money market fund really isn't investing. It's basically a non-FDIC insured bank account.

      I keep some of my money parked in Vanguard's settlement fund and use it like a bank account. It has some advantages in that it's partially not taxable by the state.

      You need to look at your after tax yield or tax equivelant yield to determine the "best" savings vehicle.

      Like 1
      • bret
      • bret
      • 1 mth ago
      • 6
      • Reported - view

      kevinf 

      Thanks for the info! I'm certainly not an expert on these matters, but it doesn't seem like that Vanguard t-bill fund has performed much better than my Ally savings account over the past 5 years. Maybe the differences are more apparent in times when the federal fund rate isn't so low.

       

      you may be able to create a secondary deposit account with your bank that you can transfer overflow to and mark that account as off-budget to keep you TBB/e-fund within reason

      I already keep the lion share of my cash in interest-yielding savings accounts. But I do prefer to keep that money on-budget. It doesn't bother me to have a big fat "Income Replacement" category in my budget that I almost never touch. It's just an explicit reminder that the money in my savings account has a very specific job (to provide financial security against the possibility of job loss) and shouldn't be spent on other things.

      Getting a little off topic here, but there are lots of other discussions on these support forums about the merits of managing savings on-budget.

      Like 6
      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 1 mth ago
      • Reported - view

      kevinf It’s interesting you think that three months expenses don’t belong in the budget but would be willing to fund an account with relatively low yield with $50K, which is well above three months’ expenses for most people. Three months expenses for me is less than a third of that amount, and I wouldn’t want much more than that parked in something that is tied to something as slow growing as TBills. 

      Yes, beyond a certain point, excess money should be invested. But most Americans should have much more reserve liquidity than they actually do. And if they are YNABers, that reserve liquidity belongs in the budget.

      Like
  • Is the general consensus that YNAB does not ever intend to consider this re-enhancement?  Do they review this thread? 

    If so, then this thread is a bit dead and is just a place for us to complain about the challenges with working around this deficiency. Right?

    Like
      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 1 mth ago
      • 4
      • Reported - view

      gte037p The sport of nYNAB kvetching is venerated, exciting, and quite fun. 

      Like 4
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 1 mth ago
      • Reported - view

      WordTenor Ha ha ha!!!

       

      I never used YNAB4, but nYNAB is a lot better than the version I used back in 2011.  Except I have to pay annually.  That's annoying, but it's the standard these days.  I wish I had YNAB4 or I would probably just keep using it until I can't anymore, but I guess moving to nYNAB and then complaining about it is even more fun :P

      Like
  • nolesrule said:
    A money market fund really isn't investing. It's basically a non-FDIC insured bank account.
    I keep some of my money parked in Vanguard's settlement fund and use it like a bank account. It has some advantages in that it's partially not taxable by the state.
    You need to look at your after tax yield or tax equivelant yield to determine the "best" savings vehicle.

     

    bret said:
    Thanks for the info! I'm certainly not an expert on these matters, but it doesn't seem like that Vanguard t-bill fund has performed much better than my Ally savings account over the past 5 years. Maybe the differences are more apparent in times when the federal fund rate isn't so low.

     

    WordTenor said:
    It’s interesting you think that three months expenses don’t belong in the budget but would be willing to fund an account with relatively low yield with $50K, which is well above three months’ expenses for most people. Three months expenses for me is less than a third of that amount, and I wouldn’t want much more than that parked in something that is tied to something as slow growing as TBills. 

     

    The initial deposit gets you into the Treasury money market, then you're free to drop the balance back down to whatever you feel is reasonable and enjoy the tax-exemption on that portion of your money. Or just use the Prime or Federal markets if they fit your financial picture better. If people want to keep huge amounts of cash on hand, that's their business. Anything past 6 months of cash on hand for emergency funding seems like money that should be invested in some manner.

    I have to disagree that a money market fund is not investing; a 'standard' checking account yields 0.05% interest, with the Federal Money Market currently paying 1.55% which is 31x more return. A high-yield bank account is a different beast and typically has both minimum and maximum deposit amounts that earn that yield, along with monthly transaction requirements to earn the yield on the money that fits in the min/max of the account. The money market funds have no such requirements other than the minimum balance, and the Vanguard settlement fund even dispenses with that. A money market should probably not be your ONLY investment, but it's definitely one that should be considered if one is concerned about maintaining their principal without the drawback of keeping bundles of money under the mattress. Not to mention that FDIC insurance has a cap to the amount it protects. Treasurys are backed by the US Government, FDIC is government backed insurance. It's potatoes to poe-tat-ohs.

    Even cash itself is an investment... cash strongly benefits from deflation, but is strongly harmed by inflation. 

     

    I feel that YNAB4 works much better to conceptualize the jobs your money has since most folks compartmentalize their lives month to month, a task NYNAB is far less suited to.

    Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 6
      • Reported - view

      kevinf 

      kevinf said:
      I have to disagree that a money market fund is not investing; a 'standard' checking account yields 0.05% interest, with the Federal Money Market currently paying 1.55% which is 31x more return. A high-yield bank account is a different beast and typically has both minimum and maximum deposit amounts that earn that yield, along with monthly transaction requirements to earn the yield on the money that fits in the min/max of the account.

      Why are you comparing it to a checking account? The comparison should be to a High Yield Savings account.... which in my extensive experience has no minimum or maximum deposit amounts and no transaction requirements. Not sure what banks you are using.

      Money market funds and savings accounts serve the same purpose.... so pick what best fits your scenario based on your circumstances. The TEY for VMFXX for me living in NC is 1.595% (SEC Yield is 1.51%) compared to my savings account at Capital One at 1.7%. Most of my savings is in the Capital One account. (For other comparison, VUSXX also has a lower TEY for me than my savings account).

      Personally I do not consider anything that does not put principal at risk to be an investment.

      Most of us only keep what we need in checking and put the rest in higher interest vehicles, but that's not the same as putting your principal at risk.

      Like 6
      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 1 mth ago
      • 2
      • Reported - view

      kevinf The current rate on my savings account is 1.7% (same one as @nolesrule) and that's not even the highest rate available out there; I just can't be bothered to move the money in hunt of a couple more bucks a year. 

      As said above, "investments" are typically defined by pretty much anyone in the personal finance world as being something which has the risk of losing principal. The lack of risk is exactly why the yield is so low on savings and MMDAs. You're welcome to use words the way you want, but using them in the most common way they're used will aid in communication with others. 

       

      kevinf said:
      Anything past 6 months of cash on hand for emergency funding seems like money that should be invested in some manner.

       Absolutely agreed, which is why it is important to distinguish between an investment and a money market account the yield of which is actually low for the current market. 

      Like 2
      • dakinemaui
      • dakinemaui
      • 1 mth ago
      • 1
      • Reported - view

      +1. "Investment" mandates risk v. reward tradeoffs. With zero risk, it's just common sense to maximize interest subject to the effort required.

      Like 1
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 1 mth ago
      • 1
      • Reported - view

      nolesrule Actually one of the things I remember from the 2008 global financial meltdown is that some money market funds lost money some day.  Not a lot, but it was a huge deal because they are supposed to always keep the balance.  An FDIC insured bank account is as reliable as the FDIC insurance, whatever you think about that.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      PhysicsGal You are right. That is actually true.

      However Vanguard's MMFs did not, and it's because they are more conservative with them, while at the same time being better at managing them... so they are safer than most MMFs while also having a higher yield.

      I'm actually a fan of vanguard's MMFs and I do use them (I'm a fan of Vanguard in general), but they aren't even incrementally better than a Capital One savings account right now.

      Like 1
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 1 mth ago
      • 3
      • Reported - view

      nolesrule I'm a huge fan on Vanguard too.  I read lots about investing only to actually invest all of my retirement money into a Vanguard Target retirement fund.

      Like 3
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • 1
      • Reported - view

      PhysicsGal Those are great products and you couldn't do better in an all-in-one solution but I like having more control over my glide path.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • Reported - view

      Agree with Superbone . Vanguard TDFs are great.

      I don't use them personally for greater control, not just over glidepath, but over the tax efficiency of our portfolio. We've been growing our taxable account, and in my tax bracket it really doesn't make sense to hold muni bonds nor taxable bonds due to a combination of yield and tax efficiency issues, so I hold tax efficient stock index funds in our taxable account and hold all our bonds in our tax-deferred accounts.

      Like
  • A lot of replies skimming straight past my mention of bonds and equities and overall investment strategies to hard focus on the also mentioned money market funds. MM funds along with bonds and equity funds in a brokerage account is part of a larger investing plan that includes cash and banking accounts .

    Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      kevinf Yes, bonds and equities are part of an overall plan. Most people shouldn't be investing their emergency fund or near-term spending dollars due to the risk of principal loss unless they have the ability to take on that risk (part of the whole "need, ability, and willingness" thing).

      If you don't already have excess cash beyond the needs of your budget that you can invest to build up that investment balance, then you don't have the ability to invest.

      Like 1
  • nolesrule said:
    Yes, bonds and equities are part of an overall plan. Most people shouldn't be investing their emergency fund or near-term spending dollars due to the risk of principal loss unless they have the ability to take on that risk (part of the whole "need, ability, and willingness" thing).

     Yep. A task money markets are well equipped for. A person may not wish to use a high yield bank account so money market funds are a reasonable alternative.

    PhysicsGal said:
    Actually one of the things I remember from the 2008 global financial meltdown is that some money market funds lost money some day.  Not a lot, but it was a huge deal because they are supposed to always keep the balance.  An FDIC insured bank account is as reliable as the FDIC insurance, whatever you think about that.

     Yes, but not the Vanguard funds due to the fund managers not chasing yield with questionable securities. Also, why I specifically mentioned the Treasury money market as it is 99%+ US government obligations and backed by the full faith and credit of the US government.

     

    Another potential pitfall is gating during a crisis, but not all MM funds have gates. One must always research what they are putting money into.

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