How can I budget to be budgeted money I have 3-4 months out
So I started in June with ynab. And it’s August now and I finally broke the paycheck to paycheck cycle 🎊👏🏼👏🏼 I’m totally budgeted for the month of August and I still have 2 paychecks due So. I see it only lets me see September. Is there a way to budget for say October...November if I have money to be budgeted?
For many reasons, one month ahead is the way to go. Budget using the previous month's income. Don't go out any further than that. When you can budget next month with only this month's income, all your non-monthly categories are funded the same amount every month, and you have an adequate emergency fund, then the money is extra, and means you can look at accelerating funding of savings goals, increase/max retirement contributions and/or invest in a taxable account.
Don't let the urge to fund too far into the future allow you to make the wrong decisions. Put the money to work.
That said, you can access a future month once the month previous to it has money budgeted.Reply
Having an emergency fund of 3-4 months expenses is not the same as having it budgeted that far in the future. The farther something is budgeted into the future, the more likely something will change about it before the time comes. If you are one month ahead already, that is about perfect for what you need. Budget all of August. When income comes in in August, you can either budget it in September or wait until the end of August and budget all of September. If you have excess funds in August come in, this is what you use to flush out your savings like job loss fund, car replacement fund, home maintenance, car maintenance, any large purchases in the near to not-so-near future (new roof, new furnace, new tires). Then you move on to your wish list (for example, I have remote starters for the cars on my wish list because we live in a cold climate in winter and it would be so nice to look out the living room window and turn the car on to warm up a bit before I get out there to scrap off the ice....I want it and I have it there as a reminder, but I am not far enough ahead yet to justify funding this category, but the reminder motivates me to see what I can do to get it funded).Reply
Future-budgeting is a slippery slope. Taken to an extreme, it reaches a point of absurdity where Rule-2 is no longer actionable and your budget becomes a massive juggling act.
For example, let's say you have a vacation planned in December that you'd like to start saving for. Great! Go budget some money directly into December's "Vacation" category... hold up. Surely you'll need to eat between now and then? Not starving is a higher priority than going on vacation, so you you need to ensure "Food" is fully budgeted each month between now and December first. And what about bills? Hmm. Maybe you really can't afford to start saving for that vacation yet after all -- need to cover those higher priority obligations first...
Maybe all goes well and you'll save enough money over the next few months that all your obligations through December are covered. By the time November rolls around, all the money you earn can be 100% applied toward the upcoming vacation. Whew, just in time!
This "roller coaster" budgeting style is really chaotic and difficult to manage. Instead of making steady, consistent progress toward your goals -- and having the confidence that you're on track to achieve them -- you're playing an endless game of whack-a-mole.
That's why many experienced YNAB users will counsel you to limit future-budgeting to just a single month (at most). Embrace categories (and Rule-2) as a way of saving for the future. You don't need to save for November's "Food" during August. You'll almost certainly earn some money during October to cover that. If you're worried about that -- if your job isn't stable and your future income is uncertain -- then set aside some money in an "Emergency" or "Job Loss" category as a contingency.
In the end, it's your choice how to manage your budget, and nothing is set in stone. It's easy to try both styles of budgeting out for a while and switch back and forth and see what works better for you. Good luck!Reply
Update: You were all right!!! i budgeted $170 for electric and the bill came in at $296.93! I budgeted $205 for cable it came in at $213.86 . So yes one month out is good. except for my mortgage which stays the same. I have been just budgeting half the money ahead and the other half when due.
once again; thank you all!Reply