New to YNAB - question about monthly budgeting
I am trying to figure out how to budget differently for my monthly expenses based on whether or not I want the excess to roll over and thus decrease the amount that needs to be budgeted next month.
For example, two of my categories are: Groceries and Medical Expenses. For groceries, I want to budget $X / month. If in December, I spend $X-50, then I want to put that $50 towards a long term goal, and budget $X again for groceries for January. For Medical Expenses, I want to put in $Y / month, every month, regardless of expenditures in the category, and let the balance increase over time.
What's the best way to differentiate those two methods? Should I be using the 'goals' feature for one of these types? If so, which one?
Thanks so much.
Yes, the first would be a Monthly Spending Goal, the second a Monthly Contribution goal.
Or, you get to the point where you are following Classic Rule 4, using this month's income to fund the next month's budgeting in its entirety, and in that case, I would recommend they all be Monthly Contribution goals, and in the first example, you just empty out the category and move it somewhere else at the end of the month, and fund it in its entirety again in the next month.
Just note that regardless of what type of goal you use, if you sweep any unused balance out at the end of the month, the category is going to turn yellow because the monthly budgeting goal is now "unmet." There is no workaround for this - you just need to ignore the "yellow" if you look back at a previous month.