Newbie question - trying to get started on the right foot!

Hi there, excited to learn this new system. I'm the process of adding my budget and have come across a question. My credit card is due on the May 11th, and today is April 17th. Is it better to budget to money to pay the card during the month of April, or budget it for May since that is when the money will actually come out?

Along the same lines, what should I do with all the items in my budget that already came out of my bank account this month prior to me starting YNAB ( mortgage, light bill etc). Do I go ahead and put them in the budget this month or add into May's budget?

Hope this makes sense! Thank you so much in advance

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  • Hello, Salmon Horn ! Welcome to YNAB!

    If you pay your card in full (or pay the statement balance but never carry an interest-bearing balance), you'll want to budget for your starting balance immediately. You always want your budget to look like the figure below: one dollar set aside in your budget for every dollar you owe on your credit card bill.

    Except for that credit card starting balance, you don't need to budget for anything that happened before you started your YNAB budget. Of course, you can budget for next month's bills, but if you paid your mortgage on April 1 and started your budget on April 15, there's no need to budget for that April payment—it already happened and the money is already gone!

    Like 2
    • Matthew Great! That makes sense. 

      Let me think out loud here.  What about all the individual expenses that make up that  credit card bill. Do I need to add budget items for them for the month of April? Or no need to go through the work of adding /categorizing all those transactions since I wasn't using the system yet? I do have the money in my bank account to pay in full for the credit card balance.

      For instance lets say my gas and cable bills are part of that card balance that will come due May 11. As I'm setting my budget up, should I enter the amounts for those 2 bills under Aprils budget? Or just simply set aside the budget to pay the card (like you showed in the picture) in Aprils budget, and budget for the gas and cable starting in the month of May?

      Hope thats not too confusing, thanks for your help!


      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      Salmon Horn Some of your CC account balance was entered via the starting balance transaction. Reserve money to pay this off directly in the CC Payment category. (No need to enter transactions for spending prior to starting YNAB.)

      The remainder was entered via transactions categorized to categories like Groceries, Rent/Mortgage, and so forth. These categories should have had money reserved (budgeted) in advance, which automatically moved to the CC Payment category.

      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      Salmon Horn 

      The Cable company charged your card some time in late March or early April. That is when the spending occurred. Do NOT think the spending occurs when you pay the CC bill.

      Moving forward, the concept is to ensure money is in the category prior to the spending (i.e., swiping the CC). I don't know if the next time that will happen is in late April (so you should budget in April's area) or early May (budget in May's area).

      • Salmon Horn
      • Salmon_Horn.2
      • 5 mths ago
      • 1
      • Reported - view

      dakinemaui That makes sense! thank you so much

      Like 1
  • Salmon Horn said:
    just simply set aside the budget to pay the card (like you showed in the picture) in Aprils budget, and budget for the gas and cable starting in the month of May?

     That's what you should do!

    Here's a few other tips I wish I had known at the beginning:

    1. Don't forget to budget to savings categories - if you already have money saved for something (emergency/loss of income, maintenance/repairs, vacation, a big purchase), put the big amount in there (a specific category) right now. This is not how much you will contribute each month, but how much you already have. 

    2. If you can already fund all of May right now, put that money into an "income for next month" category, then take it all out and allocate it sometime around May 1st. It makes things so much easier. Search the forum if you're interested in details on that (or wait until you get the hang of the software, no worries).

    YNAB is great! Good luck and have fun!

    Like 2
    • Move Light Sound Life thank you so much for your feedback! love your tips

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