Quick Budgeting: Budgeted Last Year?

When using the Quick Budget options to assign an amount, I'm surprised there isn't a "Budgeted Last Year" category that will take the amount you budgeted to this Category from the same month in the prior year. For example, electric utility bills might vary significantly based on seasons, so using "Spent Last Month" may not be as accurate as "Spent Last Year" for the same month. 

Am I missing something that would allow a quick and easy way to refer back to February 2019's budgeted/spent amounts when planning for February 2020?

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  • Rule 2 would have you normalize those utility expenses so your monthly budgeted value does not vary appreciably by season. I find that a relatively consistent budget is much easier to work with.

    Put yourself on a DYI "budget billing" program by budgeting the monthly average (= yearly total / 12), unless there's reason to budget more (e.g., overspending or imminent overspending).

    I do this with a lot of categories, utilities obviously, but also kid's activities, gas in the car, and so forth.

    Like 6
  • I agree it would be really useful to have the amount spent this month last year for context when budgeting. Things like car registration and inspections, vet checkups, etc. happen once or twice a year and would be helpful to know they're upcoming. Right now I try to enter these in as recurring transactions so I'm reminded when they come back around, but some months are just higher than others without one specific transaction to enter in (groceries in November, for example). I don't like using a consistent budget because if I don't need the dollars in a certain category in a month I'd rather throw them at one of my savings goals. 

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  • Gold Orca said:
    I don't like using a consistent budget because if I don't need the dollars in a certain category in a month I'd rather throw them at one of my savings goals. 

     How do you ensure you will have enough to budget for that expense in the month you need it? Raid your savings categories? If you have a lot of slack in your budget where you send a large portion of your income to savings, it might work as you just send less to savings on those months.

    Else, you just end up with your savings categories going up and down all the time. What happens if, in August, you spend from your savings categories and then in September you need to pay an annual bill and don't have enough income and don't have enough anymore in savings categories? In other words, how do you know the money in your savings categories is really good to use for the purpose of the category and ensure you won't need that money for a True Expense?

    Like 3
      • Gold Orca
      • Gold_Orca.13
      • 3 wk ago
      • Reported - view

      Ceeses we're able to save a large portion of our income each month, thanks to using YNAB religiously for 6 years or so now. So we don't have to take money out that was previously put into savings, but may just save less that month. I used to do consistent budgeting, and it worked okay, but we're in a different place in our budgeting now. We have some pretty lofty savings goals (home improvement  projects, etc.), and if I'm not going to need to pay car insurance for another three months but that set-aside will meet our savings goal and let us schedule a contractor, I'd rather do the latter. It doesn't impact our ability to pay the insurance in a few months. Consistent budgeting works when you're starting out, but later on it'd be nice to know when to expect big once-a-year expenses so you can plan accordingly. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • Reported - view

      Gold Orca This is YNAB. YNAB is a budgeting system. The software is built such that it follows the Rules of the system. Rule 2 would have you budget consistently for your non-monthly recurring expenses.

      It is unlikely they are going to provide tools that make cash flowing the budget easier, because that goes against their system.

      If your True Expenses are so large that they have a significant impact on your savings goal timeline, then I can't see how you are really saving as much as you claim to be toward your savings goals. The thing about True Expenses is they all have different timelines, so you'd be spending the money regularly anyway, even if it's not all on the same thing.

      Keep it simple.

      Or you can always adjust your lofty savings savings goals. Want to do something sooner? Fund them consecutively rather than serially.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • Reported - view

      Gold Orca All that said, just put in a scheduled transaction and you can use the Underfunded Quick Budget Option to budget for the transaction in the month it happens.

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  • Wow. This was my first time commenting in the forum, and I did so because this feature would be handy to have and I was looking for a way to raise it up as an idea. I didn't expect to be yelled at and told I'm doing everything wrong. We did use Rule 2 for years, but over time no longer feel financially stressed over sudden expenses because we can now cover them without needing to set aside small amounts each month.  Isn't that the point of YNAB, to help you get a handle on your expenses and age your money? What we're doing works for us, and how we budget has shifted over the years as our spending has become more consistent and our income has increased.  You're welcome to disagree that such a feature would be helpful to you, but there's no need to jump on how I choose to use YNAB to meet our goals.  I'm pretty shocked at the attitudes here, and disinclined to comment again. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • Reported - view

      Gold Orca I provided you with a workable solution. Rather than basing it on a past expense from a year ago, enter in the future transactions (make it recurring so you don't have to enter a new one) and it'll show up as underfunded in the month of the transaction. You can Quick Budget underfunded.

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      • Gold Orca
      • Gold_Orca.13
      • 3 wk ago
      • Reported - view

      nolesrule If you actually read my initial comment you'll see that I do enter in recurring transactions for specific expenses where I can, but sometimes it's nice to know that expenses in a certain category in a certain month will likely be higher than usual - like groceries in November since we often host or cook a large portion of Thanksgiving dinner. Or gas in July, when we may be taking more day trips than usual. Things like that is what the feature would be handy for.

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    • Gold Orca I agree, those discretionary categories like groceries and gas (for extra trips) wouldn't benefit from Rule 2 planning - if I tried it, I'd just inflate grocery spending throughout the year and still come up short in November. Lifestyle inflation! 

      But (and sometimes I feel I have to say this), no one was yelling at you.

      There are a lot of people unfamiliar with the method who come to the forum with some misconceptions. I've found that the people in the forum are good at explaining the best ways to use the software (and real life applications, why it works, etc). I've learned a lot, regardless of people using short sentences with punctuation (which isn't yelling). 😄

      Like 1
      • Gold Orca
      • Gold_Orca.13
      • 3 wk ago
      • 1
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      Move Light Sound Life I appreciate this! 

      Like 1
  • Gold Orca said:
    Or gas in July, when we may be taking more day trips than usual.

    I build up a surplus in the low months because of Rule 2. When July arrives, the "extra" money is already there. I don't have to search for other categories to rob. So easy.

    Like 1
  • Gold Orca said:
    there's no need to jump on how I choose to use YNAB to meet our goals

    It's just a discussion. We've pointed out some disadvantages with your approach. If you can't objectively explain why such claims are in error, then that is evidence it may not be as good as you think it is. If you cannot offer clear, objective advantages either, then what are we -- or other readers in the future -- supposed to think?

    There only potential advantage I recall you mentioning is that you can reach a savings goal sooner and "make it up" for whatever other category you robbed/delayed.

    I do NOT dispute the first part is true, but YNAB is an extremely poor tool to evaluate the second -- whether you even can "make it up", given all the other demands on your money. (That leads back to the error-prone, manual process required that I mentioned as a disadvantage.)

    Again, we are discussing ideas. Your thoughts are welcome. I would hope you would feel the same about expressing our thoughts, regardless of whether they are different from yours.

    Like 3
  • Fair enough. Here's a bigger picture of what we do for context.

    I follow the old rule of budgeting last month's income. In a given month there may be $300-1000 of "one-time" expenses, but there's always something that's coming up, right? So I know that I'll be budgeting a few hundred extra in different categories each month, it's just a matter of which categories.  Once I budget everything, including my best guesses at one-time expenses based on historical data (which is where I'd love a feature for amount spent this month last year), any leftover money goes into the savings goals in order of priority.  

    Everyone has different money triggers, right? For me, if I see extra money sitting in a category, like groceries, I'm more likely to spend it or want to move it to cover elsewhere when really it should be reserved for later in the year. And it's more "painful" for me to pull money out of savings than to move money around in the spending categories. So I've found it easier to budget as best as I can up front, including extra for one-time expenses, then pack away as much as is feasible into savings, and not touch it. At the end of the month I set the available amounts for all spending categories to $0, except for those that are goal categories (like Christmas), move any extra to savings goals, and then the next month take last month's income and repeat the process. 

    I've been using this method, of zeroing out the available amounts for spending categories, rather than Rule 2, for maybe the last year or so. It works better for me - I'm less likely to move money around during the month and I feel like I have a more realistic picture of what I actually need in a month and how much can be dedicated to savings.

    What you all are saying about Rule 2 is that you know you always have the extra in a category when you need it. And, that's true, but when do you know you have too much and can move extra to savings? I've found that it's true that there are always one-time expenses, every month. So assuming you'll have them, but being specific about what they are is helpful to me. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
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      Gold Orca 

      Gold Orca said:
      but when do you know you have too much and can move extra to savings?

       Set a cap on your categories. I put it right in the category name as a reminder.

      I have variables ways I treat my categories.... YNAB doesn't have the tools to let me know all of these so I have to be cognizant:

      1. Fund it the same amount every month, leftovers get redeployed at the end of the month (e.g. groceries)
      2. Fund it the same amount every month, leftovers build up indefinitely (e.g. Home maintenance)
      3. Fund it the same every month up to a cap. If you reach the cap, stop funding until you start a new month  below the cap (e.g. School Supplies, Clothing)
      4.  Budget billing calculation..... fund the 12 month average with a cap based on 12 month costs above average (e.g. Electricity, gasoline)
      Like 2
  • Gold Orca said:
    I've been using this method, of zeroing out the available amounts for spending categories, rather than Rule 2, for maybe the last year or so. It works better for me

    Lots of people zero out their monthly spending categories. If you happen to spend $600 on groceries instead of $700, that's an easy way to accelerate some savings goal once you know you don't need more groceries. Rule 3 in action. (It's not just for overspending.)

    Rule 2 is for expenses that do not repeat monthly. They might be recurring or one-off, but they are treated the same.

    best guesses at one-time expenses based on historical data

    How can you have historical data for a one-time expense? 

    Like 1
      • Gold Orca
      • Gold_Orca.13
      • 3 wk ago
      • Reported - view

      dakinemaui poor choice of words. I meant once-a-year or once-in-a-while rather than just one-time. Things that don't reoccur every month. 

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  • Gold Orca said:
    you always have the extra in a category when you need it. And, that's true, but when do you know you have too much and can move extra to savings?

     This type of "budget billing" is perfect for electric - it's what the electric company is doing when they offer to smooth out your bill, too. The difference is you get to keep the money and earn interest on it if you do it yourself.  I think I've seen someone's calculation for it, but don't remember who. It is something along the lines of budgeting the average for the past year (or sightly higher? I've seen a 5% increase) and capping the category available at average + sum of any months with bills above the average. 

    But I wouldn't use rule two on anything with daily discretionary purchases, like groceries. I'd probably make a second category for Thanksgiving Hosting and use Rule 2 that way. 

    Like 1
    • Move Light Sound Life Yep. I have a Seasonal Occasion category from which I reallocate for Easter, Thanksgiving, Halloween candy, Christmas parties/decorations. I treat it identically to my variable Electric bill -- a consistent amount and money is there waiting when I need it.

      Like 1
    • Move Light Sound Life said:
      I think I've seen someone's calculation for it, but don't remember who.

      I used to base my cap on the overages. @nolesrule used (perhaps still does) a similar approach, with the formula differing by when it was evaluated (either pre or post expense). These days I use the projection/max drawdown approach.

      These sorts of analyses are what I had hoped would be coming when Goals were announced so many years ago. Unfortunately, we're still getting things that can be done with a couple entries on the built-in calculator. 🙁

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • Reported - view

      dakinemaui Yeah, I still use the 12 month average + overages as the start of month max available for water, electricity/natural gas, and gasoline. I budget the 12 month average (or less if hitting the max).

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  • Gold Orca said:
    when do you know you have too much and can move extra to savings?

    I assume you mean to some other savings-like category. (The budget has no bearing for movement to a savings account.)

    So knowing when there's too much depends on the scenario:

    For something like car repair, I'd probably compute a cap based on historic data and just leave money there. It's just a matter of time until it's needed, and I'd hate to get hit with a car repair after reallocating a bunch of that money for some other savings goal.

    For something like the Electric you could look at the amounts over the average as Move Light Sound Life mentioned. Set the cap at the total of those amounts is a pretty conservative approach, since you would be able to handle the case when all those overages happen in consecutive months (the worst case of timing).

    Alternatively for something like Electric, you can realize that the category should go to $0 at some point during the year. No sense holding more money in the category than is necessary. That point can be estimated from past data. After that particular month's outflow, just reallocate that money to whatever high-priority category. Similar analysis tells you exactly what you should have Available at every point in the year, so you wouldn't have to wait.

    I've pitched this multi-outflow/variable amount goal to YNAB under the guise of a Birthday scenario. No traction as yet.

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    • dakinemaui said:
      No sense holding more money in the category than is necessary. That point can be estimated from past data.

      Gold Orca I suspect the above sort of analysis -- based on cash flow -- is somewhat akin to what you're trying to do when you speak of budgeting inconsistent amounts. The difference is that my budget is consistent until data has indicated that particular contribution amount is less than optimal and therefore needs to change. (Rule 3, right?)  So I reallocate (to elsewhere if there's excess or from elsewhere if there's an expected shortage) and use a new amount (consistently) from that point onward.

      This applies regardless of how often the outflows occur. Electric obviously happens every month, but the same analysis works for birthdays (occurring in perhaps half of the months of the year) or even for a single outflow per year.

      The great thing about spreading out contributions for a yearly recurring expense is they are more than an order of magnitude smaller than trying to scramble last minute. I don't miss the relatively small amount each month, but I sure appreciate it when money's "just there" when I need it. 

      Again, a consistent budget is easy to manage.

      Like 1
  • I don't know about you but my budget is ever evolving and so are the amounts I spend in certain categories.

    Was there a subsequent payment last year? Did I enter everything correctly a year ago?

    I would not ever trust myself or my budget with having a sensible amount the same month last year without examining last year's expenses in the category of that month, in which case I'm already there and can just as well remember the amount and enter it in the month I'm currently budgeting for.

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