Budget for annual expenses in one category
So, YNAB currently does not allow you to have multiple goals per category and that feature has been requested for a long time. I may just start contributing to the toolkit myself.
How have people that used YNAB for a long time budgeted for their annual or monthly subscriptions? I am trying to set a monthly goal for my store subscriptions category with my Amazon, Costco and Sams Club account for it.
I was trying to understand how to do my math for it since YNAB doesn't have that feature, and I don't mind sharpening my brain a bit. It's not just dividing by 12. Since it's one category, I need to budget a little more for my Amazon membership since that is due sooner than my Sams club membership. Having one category will tie up less money, but I need to figure out how much to save in the category so I can cover those expenses.
Is it just taking the Bill A / number of months left + Bill B / number of months left + .... + Bill ? / number of months left, the decimal approximation is fine?
Read more here: https://support.youneedabudget.com/t/y727d8/budgeting-for-future-transactions
I do hope YNAB comes up with a nice solution for this. The obvious use case is for birthdays and subscriptions, having enough for each child.
Slate Blue Pilot (2903ac015cdb) said:
How have people that used YNAB for a long time budgeted for their annual or monthly subscriptions?
I keep them in separate categories. It's more for the constant awareness than the convenience of calculating monthly amounts. I don't like putting different things in the same category because I tend to lose sight of the individual components that may have a change in priority at any given point.
For birthdays I had to throw it in a spreadsheet and just tweak numbers until I had the right amount at the right times, because the birthdays are spread out sporadically through the year I couldn't do a simple formula to hit each one.
I had a column for what I'm adding, a column for what's coming out each birthday, and a running total column, then rows for each month. I just had to tweak my monthly contribution amount while I watched the total each month to make sure none went negative.
I include Christmas too, which actually helps because it's a big amount at the end of the year, so it pushes up the necessary monthly contribution which helps make sure the category has enough for the smaller birthday budgets earlier.
It also helps that I don't have birthdays until May. Combining expenses into one category is way easier if the timing is convenient.
When combining multiple annual transactions in one category, I have figured out that I need to establish the starting month as the month following the largest scheduled transaction in that category. That gives me a starting month that may not necessarily be January.
Example: my family birthdays and special events are spread out over the entire year, but there are more in Feb to April, so month # 1 in my family events category is May. This means I can spend down to zero in that category in April without running into a problem, and I need to start putting aside the 1/12th starting in May in order to have enough to get through the early spring birthdays.
Example: I run all my licenses, insurance, and memberships through one category. My annual car insurance is easily the largest transaction. It occurs in July, and often takes the category to zero or near zero, so month # 1 for this category is August.
By identifying the starting month for the grouped expenses, I can then simply go with 1/12th of the total sum needed for the 12-month period that will follow.
I also created a spreadsheet for this. Check it out: Here's a Spreadsheet to Audit Your "Subscriptions" Category - Using YNAB - YNAB Support Forum (youneedabudget.com). You can download it from my OneDrive to try out yourself. 👍
I've used YNAB for many years (YNAB 2). My general view is to customize to whatever works best for you.
I've gone back and forth between very general categories and super specific categories. I have a lot of subscription type categories. Some are monthly, some are annual, some are in between. A few are every 2 years.
What I have decided works best for me is to have a separate category for every subscription. The monthly ones go in a master category for those. The lumpy ones go in a different master category. I put the amount of the subscription in the category name so it is up front.
I don't actually set up a goal for these categories nor do I budget in advance for them. I'm retired so I know I have the money to pay them when it gets to the month. If I did need to budget in advance for them I would problem set a target amount goal and budget as I could to them to make sure I had enough. I would initially start out by dividing by the number of months. So if it was $700 due in 7 months then I would budget $100 a month. But, I would set a goal so that if I got ahead (or behind) I would see how to adjust to make it by the date.