I've been working with the new version of YNAB for over a year now, and I'm noticing that annual subscriptions are sneaking up on me in my business. There are several things that I pay for once a year (like YNAB and website domains) that have been difficult to budget for because they only happen once a year. I am thinking that it would be helpful to know how much I spend each year on subscriptions, and create a category to spread that amount out across the year.
Is it possible to go backward and find those transactions and create a category so I can look back over the year and get a better handle on these situations?
Any other ideas or suggestions for managing this situation would be helpful.
This is the heart of Rule 2 in YNAB. Save monthly for your non-monthly expenses.
If it's something annual, you should be budgeting 1/12 of the amount to a category every month, so that when it comes time to make the payment, the money is all there. Other frequencies use other denominators to determine the monthly amount, based on the number of months per cycle.
As you get started, you're probably better off having one category per subscription. Otherwise to combine them you need to do the math to figure out how to fund it correctly so that the lone category never goes negative (it's more complicated, but the required monthly budgeting amount in total is a little less this way).
How interesting. This is timely for us, as well. My husband and I just decided to make a category for Annual Memberships/Subscriptions, with a subcategory for each expense, with its own goal and timeline.
When it comes time to pay, we plan to enter the transaction in the logical category (software/entertainment/professional) and move the money from the saving category.
We had been doing the math when they were part of other categories, but it just wasn't working with the surprises. Hopefully we've got it down now.
In terms of going back and cleaning up the budget (recategorizing some early transactions), I wish it were easier.
I really want to do it, but my attempts so far have resulted in weird changes (SFTF related) that made me undo really quickly. I think I've figured out both the logic and procedures to stay safe, but i haven't taken the time to try.
I anticipate needing hyper awareness and follow through throughout these past category changes (because you have to move the money in the budget to follow the category ... And there's nothing to help you check if it's right). I can't recommend it unless you've really thought through the possible consequences and feel comfortable circumventing them.
I'll let you know what works if I try soon. :)
I have a category "Current Yr Annual and Semi-Annual Bills" and a "Next Yr Annual and Semi-Annual Bills". I keep the latter minimized/hidden. These are set up as rolling 6 months buckets. So, my "Current Yr" one, has all the once/twice yearly bills that will be upcoming in the next 6 months: June 2019 - Nov 2019 with due date reflected in the title. ex. "YNAB subscription - June 2019'". Once I pay it this month I will rename it "YNAB subscription - June 2020" and move it to the "Next Yr" category. This way I can budget 6 months in advance and don't look at a lot of clutter (I also don't like budgeting little amounts every month like $7 for YNAB each month...instead I start funding once it gets pulled into the "Current" category..but that's just personal preference).
I've got three categories with subscriptions in them.
1. Better life - news and magazines (includes a mixture of annual and monthly payments for, well, news sites and periodicals)
2. Fitness including apps - because as well as buying running shoes I also pay for some apps (I had a ton of weight to lose and I did, and kept it off, so these are an investment in my view and well worth it.
3. Subscriptions (which is a mixture of annual and monthly amounts on stuff like a VPN, storage, YNAB, whatever else)
As nolesrule has pointed out, it does mean I had to do the Maths, but it wasn't hard. I looked up (not all at once, over time) the cost and - if annual - date of the payment. I note it in the Notes. And then I do whatever Maths is needed to set a monthly goal.
It's the sort of thing you might sit and work out one evening while you were fiddling around with the budget anyway, making cancellation choices and so on.
The note in Fitness including apps reads thusly:
PIIT Pocket $99 = £76 pa, renews 23 Aug. DOWN DOG $20 = £15 pa. Renews 8 May. Zombies Run. £26 pa. March. MyFitnessPal. $50 = £38 pa, renews Jan 16. Clothes & kit = £80 pa (trainers and stuff).
And it all shakes out at a monthly goal of £20. If I cancel anything or add a new one I can rejig it in a couple of minutes. The clothes and kit number is low because I bought a ton of new stuff just before starting YNAB, so I'll have to change that at some stage. And as you can see, most of the costs are in dollars and I've converted them, so none of it's to the penny, but hey, whatever! :)
For the annual subscriptions they're in their own category group but monthlies are mostly in a an entertainment category for which i budget a certain amount each month. The others come out of the appropriate category they're grouped in with. I.e. the icloud storage fee comes out of the Backup/Storage Maintenance/Replacement Category. The monthly HVAC repair and maintenance contract comes out of Home Repair.
I leave the entertainment ones lumped because I hand enter every transaction and reconcile the credit cards and accounts manually. So I am aware of each monthly charge.
Thanks for everybody's thoughts!
I can see how going backward would make a mess of things, which is unfortunate because I would love to be able to see what was happening over time. I think I'll just have to go through and find the transactions and figure out what I need to put in there monthly so that I can begin to work with it moving forward.