Is YNAB for me? Accustomed to budgeting full month of expenses

Some background: I just started using YNAB yesterday. The only things I use my checking accounts for are: (1) Paying my mortgage (2) Paying my auto loan (3) Paying my credit card. All of my monthly spending is on my credit card for the cash-back rewards. Sometimes I carry a small balance but usually I pay it off in full each month. I am salaried and paid twice a month, same amount per paycheck.

I am used to budgeting for all items on a "full month" basis. To keep things simple, let's say I am paid $1,000 per paycheck, or $2,000 per month. And let's say I budget $2,000 worth of expenses for the entire month (all of them paid via Credit Card).

My question is: will my "To Be Budgeted" total amount on YNAB be "in the red" if I enter a full month of budgeted expenses at the beginning of the month? In that scenario, I've only been paid $1,000 (first of the month paycheck) and yet I have $2,000 of expenses budgeted.

In the past I haven't cared one bit about how much of my monthly income is spent in the first half of the month versus the second half of the month, because *timing of that spend is meaningless* since it's all put on my credit card and paid at the very end of the month.

Can I use YNAB effectively with the way I spend and budget for money? In other words, I know with full certainty what my income will be for a given month. What I don't want to have to do is babysit my budget by logging-in at the beginning of the month and budget for the "first half" of my monthly paycheck, and then login at the middle of the month and budget for the "second half" of my monthly paycheck. I just want to say, here's the total amount of money I'll get for this month, and here's where I plan on spending it.

Will YNAB be showing me "overspent" throughout the first half of the month (assuming I spend more than the $1,000 that I am paid on the 1st) until I'm paid the second $1,000 on the 15th? I understand the logic in this, but for someone who uses a credit card for all of their spend, I am not "over budget" and it's frustrating if I have to manage it this way.

Thanks in advance for any help / advice!

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  • With YNAB, you only budget money you actually have. I also get paid twice a month and use credit cards for everything. I can budget an entire month because I am buffered... everything that comes in this month is budgeted in *next* month. So, at the end of January, I use my two January paychecks to budget February. That's the only way you'll be able to budget a full month at once with YNAB. Trust me... I and others have tried to do it your way, and it just doesn't work. I was accustomed to budgeting a full month at once, too, and really tried to work against the system at first. You'll start seeing progress once you embrace the method.

    BTW, you don't know with full certainty what your income will be. Even if it is literally impossible for you to not get your paycheck... you might also get savings account interest, credit card cash back, gifts, bonuses, etc. The amount you budget per month will pretty much always vary. At least, I haven't had any two months with the same amount to budget in 3 years, despite being salaried.

    Reply Like
    • Laura Coursen Thanks Laura for the very quick and helpful reply. Good point about income variability... I was just trying to explain that I'm not really "over-spent" for a given month if YNAB doesn't properly recognize (virtually) guaranteed income that has yet to come in for that month. But I guess that will require a change in my budgeting behavior if I want to use this system...

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      • Laura Coursen
      • Technical Writer
      • lecoursen
      • 4 mths ago
      • Reported - view

      Turquoise Tape Yeah, it's a huge mind shift. But it's totally worth it!

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
      • 3
      • Reported - view

      Turquoise Tape Mrs nolesrule has worked at a MegaCorp for 16 years. For 16 years there have been no payroll issues. But now they've screwed up 3 of the last 4 paychecks. Income is never guaranteed until it's in your account.

      Reply Like 3
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 4 mths ago
      • Reported - view

      nolesrule Truth. It's happened to my mom at least three times in the last several months too. I wonder if they work for the same MegaCorp.

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    • nolesrule Fair enough!

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  • Has your previous method been working for you? Are you meeting all of your financial goals such as maxing out retirement accounts, saving to buy a home, not being stressed about money? You say that you occasionally carry credit card debt so that’s not ideal. Also it sounds like you are riding the credit card float - relying on money you earn tomorrow to fund the expenses you make today. 

    Maybe completely changing what you do and embracing the YNAB methodology will improve your financial situation. 

    Reply Like 3
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 4 mths ago
      • 2
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      jenmas It certainly did for me!

      I carry some 0% debt right now but the money is sitting right in the credit card payment category so I could pay it off at a moment's notice. I paid my credit cards off two years ago, including riding the float. It feels good.

      I also understand the urge to see my income as completely guaranteed, but the fact is, there are always computer glitches. Heck, people who work in nice, safe federal jobs can't even count on their paychecks arriving on time! It's always a good idea to plan for the worst and hope for the best. But both parts of that are important-- you have to actually plan for the worst!  I like the safe feeling of that, too.

      Reply Like 2
    • bevocat I always took it for granted, and was never sure how to define it, but "riding the credit float" is exactly what I've been doing. And as you've probably surmised (since I'm posting in a YNAB forum!), my budgeting has not been that great despite how much sense it might make in my head.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 4 mths ago
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      Turquoise Tape Well, you're making a great start! They say the best time to plant a tree is 20 years ago. The second best time is right now.

      Chip away at it, and pretty soon when you make a charge on your credit card, the money for that purchase will be sitting in the payment category waiting for you to send it off to the CC company when it's time, and working for you earning interest for you instead of working for them!

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
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      bevocat That saying has always bugged me. If the best time to plant a tree was 20 years ago, the second best time would have been 19 years 364 days ago.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 4 mths ago
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      nolesrule Only a YNAB4 Evangelist would make such an objection. 😉

      Reply Like 3
  • Turquoise Tape said:
    Can I use YNAB effectively with the way I spend and budget for money?

     Can I use YNAB effectively - yes, you can. Absolutely and Positively.

    the way I spend and budget for money - Um.....yes and no..... it depends on how quirky you are with your money handling and attitudes.  (I say this as a formerly very quirky money-handler 🙂)

    YNAB is a methodology first and foremost and a lovely software with all sorts of bells and whistles to make it efficient and fun.  I truly found it to be a life-altering methodology.  The best advice I got from other YNABers when I started was:  set aside your way of doing things temporarily and give YNAB a shot the way they teach us to use it.  You can always go back to your way of doing crazy (sorry, that was about my quirky methods of handling money) after you give it a shot.  OMG!  What a change and for the better.  Some things took a little getting used to, namely only budgeting money I had, and then I really struggled with not using separate bank accounts to define the purpose of my money.  Four years later, my net worth has tripled, I have no debt, my credit report is the best and highest it's ever been, and I have the biggest emergency fund at my disposal.....and which account(s) it's living in is anyone's guess.

    Reply Like 9
  • Turquoise Tape said:
    My question is: will my "To Be Budgeted" total amount on YNAB be "in the red" if I enter a full month of budgeted expenses at the beginning of the month?

     Everyone (including yourself) seems to be ignoring any money you currently have -- not including January's paycheck. You're going to have to make a plan for the money that is currently in your account(s). Ideally, you will fill out the rest of January's demands using this Pre-January / startup money. Your Jan. paycheck can be used to budget all of Feb. At once. Using real money you can actually spend. You can budget March anytime after your Feb. check clears. Etc.

    TLDR: if you have sufficient money at startup -- not including Jan paychecks -- then no, you will not be "in the red" if you budget Feb. at the beginning of Feb.

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      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • Reported - view

      It may be possible that structuring your budget to leverage the CC float will allow you to push income into the following month. You're just going to have to start plugging in real balances/categories and see how things pan out.

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