Get a month ahead - no "income for next month" like in classic
I've got a category called "get a month ahead" and it's fully funded. In cYNAB, I would have instead been stashing this money in the "income for _next month_" option when income comes in and you choose to make it income to be budgeted. In cYNAB you could make that income to be budgeted in the following months.
So, in this YNAB, once you've saved enough to be a month ahead, how do you incorporate that into your system?
I have a separate category called Income for Next Month right at the top of all my other categories. As income starts to arrive in the current month, it goes to TBB and then into income for next month. At the end of the month, I release all those funds back to TBB and fund the following month all at once.
All the workflows employ a category to hold/accumulate funds. They differ in how they put those funds in and then release them, with pros and cons to each.
I prefer to directly categorize to the INM category because that can be automated (scheduled transactions and payee rules) and is impossible to mix with money received early in the month if I don't get around to budgeting until then.
That choice mandates that I edit the transactions to release the funds in order to keep reports accurate. Search for INM, Select All, (possibly deselect transactions that are too new) Edit, Categorize as...)
The above priorities ease of use (fewer manual operations) and error resistance.
For someone who is still budgeting something to the current month, I'd recommend prioritizing flexibility. Bringing in money as TBB and budgeting it to the INM category. The release at the end of the month is achieved by simply deleting the budget entry.
A better approach (IMHO) will instead release with a negative budget entry in next months area. This has the obvious feedback of progress if you can get the budget entry positive before the month ends. This would be my preference when some income is still needed in the current month. In fact, I used this exact approach in YNAB4 when I was "partially buffered".
I just begin budgeting in the next month. I basically fill in my categories from the top down until I've received all income for the month. If at any given time I don't have time to allocate, I just drop in the first category I have not yet funded until I decide to go back and finish. I don't find the need for a specific category to hold it in.
Ok... that was clarifying and utterly confusing! Thank you everyone for answering.
I still don't know what to do. If I have a lump sum saved in a category (get a month ahead), should I pull that money out on the first of July, and then start dumping future paycheques directly into that category instead of TBB? Or put them in TBB and then categorize them to INM? I don't like the idea of messing with the total budgeted... I like to see that total budgeted is the same as total income, which I think this will mess with?
Violet Device said:
start dumping future paycheques directly into that category instead of TBB? Or put them in TBB and then categorize them to INM?
Either way works.
The first way can be more automatic, and is what I was referencing in my list above.
The important thing is that you match the way the money got into the category to the way you take it out of the category. If you budgeted it in, budget it out. If you categorized it in, categorize it out.
My system is pretty much the same as yours. I have a category named Buffering in a parent group named Holding. I keep the Buffering category hidden except for a few moments each week when I move each new paycheck from TBB to Buffering.
On the last day of each month, I zero out my Buffering category, sending everything back to TBB. Then I open up the new month and begin budgeting with everything I just pulled out of Buffering.
I love this workflow so much! It's changed my mindset so much. Also, keeping that Buffering category hidden makes it easy to never even feel tempted to spend from it. Mentally, I treat the money almost like a CD awaiting maturity. I would feel like I'd lost something if I were to spend it earlier than I planned. I don't even mentally consider it to be part of an emergency fund or savings... It's as if it was imaginary money that hasn't even happened yet.
It's a very cool feeling to not even feel tempted (with minimal or no effort) to spend a good sized chunk of money.