Budgeting for future months
Can you budget for more than 3 months? I want to budget my savings in September but I can scroll months only till August. My subscription is ending on February next year.
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You can only budget one month farther than the last month in which you've added funds. To budget in September, something must be budgeted in August.
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MomonWheels I just learned this recently and I've been using YNAB since last August. I just don't usually budget in the months ahead, because I hear all this stuff about "stealing from the future" and I don't want to mess with it.
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PhysicsGal When I first started, (only last month) I thought I would DEFINITELY budget in future months. But in less than a month I made a simple mistake, confused myself and decided to embrace the Income For Next Month Category that I hear was a staple of the most recent previous YNAB software. The mistake I made was a small amount of money, but obviously my worry was, messing up a large portion of the budget. No thanks!
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MomonWheels I used to use YNAB3 and it did the same thing as YNAB4 as far as the income for next month was concerned. It's not so bad to do it manually now, but I kinda wish they still did it the old way. Apparently I can still use the old YNAB3 on my computer, but it's way clunkier in most other ways compared to nYNAB. I still think "live on last month's income" is less confusing than "age your money" but it's also a harder goal to reach.
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PhysicsGal At least it is meaningful once achieved.
In fairness, some of the more recent material from YNAB talks about breaking the paycheck to paycheck cycle. I'm happy to see less focus on the Age of Money metric and more on budgeting ahead.
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You can, but I find it counter productive to go beyond even next month. I don't relish flipping through screens changing numbers when priorities or amounts inevitably change. Instead, I just grow an Income Replacement category.
However, if you want to go further, you need to budget in August to open up Sept. If you're trying to fully-budget an outflow that will be paid after August, it's recommended you just budget that in the current month or uniformly in the months leading up to the outflow (Rule 2).
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dakinemaui What about the YNAB principle of giving all of your money a job? I receive commissions in amounts that would allow me to budget for several months into the future.
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aka DerekSmalls Deferring the money you have to use it in a future month is a job. It's the same concept as having an Income Replacement category for job loss, but different in that it's purpose is to smooth out lumpy income. You release the money to budget into the categories that need it in the month that needs it, rather than directly adding it to the category.
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Navy Blue Trumpet said:
I want to budget my savings in SeptemberNo you don't. You just haven't realized it yet.
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nolesrule This response perfectly exemplifies what I feel to be YNAB's worst feature: the cloud of smug condescension it wallows in.
This sort of content-free quip does absolutely nothing to help the OP, and stops just short of calling them stupid. (Or at the very least, ignorant.) Yet posts just like it are rampant on these forums.
I'm glad the software works great for you. And maybe this person will come around to your way of thinking and maybe they won't. But I seriously question the long-term value of being actively hostile to newcomers.
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Aquamarine Cartridge said:
But I seriously question the long-term value of being actively hostile to newcomers.I don't think @norulesrule is trying to to be hostile, it's just that online forums are not the best place to catch people's subtle meaning and connotation. I've felt that way in the past too, when I was challenged on my way of using YNAB, but I know they mean well and, in the end, I came to agree with them.
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Aquamarine Cartridge Telling someone they are doing it wrong is neither smug nor hostile. It's challenging someone's assumptions and hopefully getting them to think critically, but without the handholding.
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nolesrule You're doing it wrong.
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PhysicsGal The forum emailed me what you wrote originally, before the edit. I understand why you removed it, but it did seem to make sense and would explain a lot.
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Aquamarine Cartridge
Aquamarine Cartridge said:
nolesrule You're doing it wrong.I guess I've been doing it wrong for 6 years then.
But based on the long-term results (getting users to think critically about their choices and use YNAB better), it works for the vast majority. I leave it to the others to use other methods. You just never know which method someone will respond to. People learn differently, People are motivated differently.
My experiences inform how I post. Hard to argue with the long-term results. 😉
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nolesrule See also: survivorship bias.
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Aquamarine Cartridge What factor am I ignoring? I am only interested in helping people that post here.
That said, I've gotten plenty of feedback from longtime readers, first time posters that say my posting style has helped. And I grant that's not a scientific study and is itself conformation bias, but I'm limiting my observation and conclusion above to only what is measurable.That scope would be limited to people who post on the forum and not to people who use YNAB as a whole. I don't interact with YNAB users that are outside that scope.
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In my experience “Yeah don’t do that” and “Gee, you probably don’t want to do that :insert lengthy explanation of why not:” are about equally likely to result in the question-asker being affronted that the way they thought they should use the budget is being challenged and accusations of smug condescension. The problem usually lies with the receiver rather than the sender. So as long as telling someone to use the budget in the most efficient manner is going to make the same number of people mad, one may as well do so succinctly.
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Aquamarine Cartridge said:
This sort of content-free quip does absolutely nothing to help the OPSo, there were other responses that outlined details. I instead read Nolesrule's as something to make someone stop and think, which is beneficial.
It was an almost an identically styled comment of his a while back that made me stop and think about how I was (over)paying my credit card. I had another issue, and he basically said the real question was 'why was I paying down to $0 repeatedly?'. I then realized I should maybe learn something new, asked about it, considered the option, and have since chosen to both streamline my YNAB workflow and earn perpetual, compounding interest on my credit card statement amount.
The fact that someone is concise, frank, or possibly uses dry humor without emojis doesn't necessarily mean they're being rude. People from different geographical areas (and even social circles) have different mannerisms when they communicate. What may seem brusque in one region may be considered polite in another. I know when I traveled to New York as a student, the organizers warned us that the people there may seem rude, but they just have a different way of interacting than where I come from (somewhere further south).
I only write this response because I think it's important for the civility of the forum that people don't project unpleasant tones where they're not necessarily present. I, for one, have enough imagination to picture someone who typically uses few words and would say "No you don't. You just haven't realized it yet." with a slightly raised eyebrow, almost smile, and a twinkle in the eye that says, "I know where you are in this - come challenge your idea and you'll learn something you don't know yet." (OK, the smile is unnecessary - I've known great people whose laser-like attention is their version of acknowledging me as a person, and it's just as respectful.) Pedagogically, this is a good practice, because the learner doesn't have everything spelled out for them - they have to figure it out.
Anyways, the forum is a text-based medium, so we're missing many nonverbal cues. Why interpret the worst intention?
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aka DerekSmalls said:
I receive commissions in amounts that would allow me to budget for several months into the futureI suggest you consider a different, but equally useful job: enable planning once more information arrives.
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To answer your question plainly, it is so much easier to budget each month once. Here are some specific scenarios.
1) If you have 3 months' worth of expenses saved up, great - stick it in a category called Loss of Income now and leave it there. You will presumably get paid regularly to maintain regular budgeting (unless you lose your income, in which case, reallocate from that category to cover regular expenses).
2) If you have irregular income, and you know you'll need what you have to last for a few months, great - put it in a Deferred Income category now, in this month. Each new month, take some out so you can fund that month.
3) If you're saving the money for something specific in September, make a category for it (tuition? big concert? whatever?) and stick the money there now, in the current month. It will be there waiting for you when it's time to be used. It's up to you whether you want to spend from that category or move the money to another category that makes more sense (tuition would stay, the concert would be categorized as fun and the money moved to support it).
The benefit of saving in a category separate from its spending is to maintain guidance on normal spending. For example, say I was going to some $200 event in December and the tickets go on sale in September. I have the money now and I don't want to accidentally spend it. If I put it in my regular fun category, I would look at the category to decide if I can get a woodworking tool, see the $225 available, and forget about the $200 dedicated to the concert. I would be sad come September because I would have to find the money all over again. Separating the specific savings is better for the budget, but when I actually buy the tickets, I'd categorize them as fun and move the money appropriately.
I hope that helps you out, Navy Blue Trumpet . If you have another scenario in mind, please ask! There are a lot of people on the forum with experience about the best ways of using the software to help your financial position.
Good luck!
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Move Light Sound Life Usually I'm using second method you described. But I'm not getting any usual income untill September/October when schools will be hopefully open where I live. I need to know for how long my savings will last and fund essential expenses. I'm preparing for a worst case scenario.
nolesrule with that knowledge you still think that I should do it different way? -
Navy Blue Trumpet if you normally make $X and there's 2*X in the category, you will be able to plan 2 months as normal using those funds (when those months arrive) and longer if you cut expenses.
All we're saying is there's little point in filling out those months well in advance if it might change anyway.
I mean, filling out the month just before it arrives works fine when TBB is filled from a check, why does that suddenly change when it is filled from the category?
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Navy Blue Trumpet That makes sense. If you're a new user, I would make a category for each month in between now and then, divide up your money equally between them, and release the appropriate holding money in the appropriate month to budget that month's expenses.
Personally, this would give me peace of mind to make sure I didn't make a calculation error when taking out June's money, leaving me short for August. Peace of mind when things are topsy-turvy is worth a few extra categories.
When things go back to normal, you can consolidate into working back towards a single Loss of Income category.
That's just how I'd do it. Don't budget in future months - this is not the time to have the Stealing From The Future bug bite you if you don't know what that is. Besides, you'll likely be making cuts to make the money last, so each month will likely be different. Save the work and hassle - focus on this month while protecting the next months.
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