Funding True Expenses - focus or even distribution?
I do not have enough income to fund all of my true expenses to the extent that they probably need funding each month. What is the best distribution of the funds I do have available to fund true expenses?
1) Pick a True Expense and focus on funding that one item, then when that's on track/fully funded, move on to the next one
2) Take the funds available and divide evenly among my True Expenses, so that they each have some funding but none of them are close to on track?
Or some other option I haven't thought of.
I know we have conversations like these on the forums, but I couldn't find ones that I found helpful recently, and am hoping people don't mind having the conversation again. Thanks!
I use a combination. I start out with method 2, and then if I am getting very close to funding one of my true expenses, I will complete it with one of my paychecks just to give myself a small “win”.
From personal experience, if I try to fund them all slowly and equally, I often end up stealing from them. But I never steal money from a completely funded true expense.
So this depends on if you cannot fund them all because of a shortened timeline to when they are due because you just started YNAB (e.g. an annual expense is due in 3 months so you have to fund it 1/3 per month instead of 1/12 per month) or if everything funded at the regular monthly rate is too much.
If it's the former you will need to focus temporarily and then when you have some breathing room you can establish the regular cadence.
If the issue is the latter, then your plan is not feasible at current income levels and you need more income or you need to cut expenses.
The YNAB book emphasizes having priorities, and I think it really just depends on you the budgeter.
Is having money for car maintenance more important TO YOU than funding other categories?
If you do not have a buffer, I would recommend you try that method. https://support.youneedabudget.com/t/m1hqyb3/trying-out-the-ynab-buffer