Problem with organising budget categories and using goals for multiple payments while having irregular income.
I'm new to the YNAB app, but I already read all the available material on YNAB website and their documentation. I also took part in two webinars: "Get Started and Prioritize" and "Create a Budget Template", and I listen to some YNAB podcasts episodes. But still, I find difficult to grasp some ideas behind the budget template organisation, transactions and goals.
In the Category Grup "True Expenses" there is a category "Sofware Subscriptions". I have few subscriptions, and they look like this:
- Dropbox for $138 paid annually on 28th of February
- Adobe for $360 paid annually on 18th of April
- Hosting for $14 paid annually on 4th of July
- Domain for $60 paid annually on 20th of December
Now, I can make a Transaction for each of them, and I understand that in those four months (February, April, July and December) those amounts will pop up at my budget and make an orange number in the "Available" column.
But the thing is that I am a freelancer with very irregular incomes, so I would like to have the money put aside for all those subscriptions ahead of time, but not necessarily the whole amount here and now.
I understand that Goal mechanism is the way to go, right? But is there any other way than to just sum up those four prices and, have a goal of $572? That doesn't seem to be useful. What date would I put on that goal?
What I would like to do is to create four separate goals for each of those payments with their own due dates but under just that one "Sofware Subscriptions" category. That, however, seems to be impossible to do.
I would like to avoid creating categories for every separate payment, just to keep a tab on it. I would also like to avoid going into the month and suddenly discover that I have $360 payment to make but no income that month.
I would be grateful for any ideas on how to organise budget with that specific case in mind.
Hi Anna !
I completely understand what you mean and cases like this require a bit of math, but can work out to be a standard expense. The issue here is that since you're starting in February, this requires a bit of catch up. In order to meet those upcoming expenses, you need to budget $138 as soon as possible and then $180 in March and $180 at the beginning of April. After those immediate and larger expenses are met, you can start budgeting for those transactions on a smaller scale on a regular basis.
A monthly funding goal is a good idea in this case. So, starting in May, you can create a Monthly Funding Goal of $50. If you budget $50 in May and June, you'll have $100 saved by July - which is more than enough to pay the $14 hosting fee, leaving $86 left. If you continue and budget $50 in July, August, September, October, November and December, you'll have $386 - which is more than enough to pay the $60 due in December for your domain. That'll leave you with $326.
If you continue and budget $50 in January and February, you'll have $426. Which will cover the $138 due in February and leave you with $288.
If you budget $50 more in March and April, you'll have $388 which will cover the $360 due for Adobe in April. Then, you can start the process over again for the next year, still budgeting $50 a month so that you have enough available once each bill comes due.
Does that help iron things out? There are other methods to do this (other ways to work those goals into the equation) but I prefer this method to keep the amounts small but still allow you to have the needed amount when the time comes. :)
Though it stinks, and I complete understand your desire to avoid the clutter, I did exactly what you specifically are trying to avoid and created a separate "subscriptions" category group, with my subscriptions underneath (amazon prime, my annual professional membership, Netflix, etc. ) I find it a ton easier to keep track of them and make sure they are funded, and at the end of this year I would be able to look back and see if the subscriptions are worth it and see if I need to cut any. Now those I certainly understand you can't cut, but it's just and example. Then each category can have a "balance by date" which will help you split it all up monthly. Then what you would need to do is just keep paying off the monthly goal each month by either paying ahead in the next months, or leaving it in that category for the month and then having it adjust your monthly goal later. Nothing ideal or perfect, but it's another option you can do.
Thank you Faness at YNAB and T Kelly for sharing with me your ideas on how to deal with such payments. It seems to me that some mechanic is missing in the YNAB app and method, but it is what it is, and I think I will go and try Faness' plan. I'm not sure if this will be clear enough to check, maintain and to know where we stand, especially that I'm not the only one who will be working with the app. But maybe I'm wrong. I need to see for myself first.
Once more thanks for the insides!
I felt like this is a good example of what Faness was saying in a way that helped me see how to keep track of what I was intending by the monthly funding goal: https://www.reddit.com/r/ynab/comments/5dye60/nynab_our_monthly_auto_maintenance_fund/