Newbie with set up questions
Payday was today so I decided to start YNAB today because there is money in my account. I realized my mistake halfway into entering budget amounts - it was still set to December, while the money is for the first two weeks of January. I think I've fixed that now. But it left me thinking maybe I should see if other users in similar situations to mine have recommendations that might save me from making big mistakes.
My prior idea of "budget" was whatever is left after bills is available to spend. A month or two before a "true" expense, I would start to consider how to plan for it.
I get paid the same amount on the 15th and the last day of the month. I live completely paycheck to paycheck right now, and it's just me. So my first goal is to get 2 weeks ahead, and then a month ahead. Ultimately, my goals are to pay off debt and get 6 months worth of expenses in the bank. I have a big purchase goal in 2021, and I am pretty sure I can be disciplined enough to make that goal and work towards those other goals.
The thing I'm struggling with at the moment is how I future budget for the whole month of January, and then successive months, without having it showing me a negative. Is there a way for me to budget, say, 3 or 6 months ahead without the budget showing a negative number? Or will it only function in real time when money is available? I guess the question is if I can set a date range on the budget in a sort of "active" vs "future" dashboard kind of display.
Totally open to suggestions from people who have been in a similar paycheck to paycheck situation, too.
The thing I'm struggling with at the moment is how I future budget for the whole month of January, and then successive months, without having it showing me a negative. Is there a way for me to budget, say, 3 or 6 months ahead without the budget showing a negative number?
You should never budget money you do not have in TBB. YNAB is a zero based budget, you add money to the budget in TBB and then determine which categories need to get funded. You should budget TBB to zero but never below zero. It takes a while to get used to doing it the YNAB way but it is definitely the best budgeting method I have seen.
I get paid the same amount on the 15th and the last day of the month. [...] So my first goal is to get 2 weeks ahead, and then a month ahead.
Within YOUR particular budget, getting 2 weeks ahead is the critical milestone. Your end-of-month check already goes toward next month. All you need to do is cover expenses occurring after the 15th and all your income can be pushed into next month. This is what breaks the paycheck to paycheck cycle. You will be able to budget the entirety of next month on one go, and things get a LOT simpler, easier, and more clear in YNAB at that point.
Specific workflows that many have found to be efficient and effective can be found here:
For additional financial cushion, the 6 month Income Replacement fund is a good idea (in addition to other likely true expenses that are traditionally thought of as "emergencies" like car repair, etc.).
However, I find it MUCH easier to grow the IR fund in a single category rather than constantly flip screens to budget out the next 6-7 months. That's a lot of busy work when priorities or bill amounts change for no real benefit.
Thanks for sharing your story. It sounds like mine when I started, trying to fit what I "know" about budgeting into YNAB.
Believe what you discovered in your first live class was the budget template. That was a game changer for me also. YNAB considers itself more of an educational program than a standard budgeting program.
For me, I had to forget everything I thought I knew about budgeting, and learn the YNAB method and I'm so very glad I did. The way I did it was to attend classes regularly, again and again, read everything I could, watch all the videos, and allow the process to take place, the process of learning the YNAB method, one layer at a time. As I learned something new, I'd incorporate it and things got better, then I'd learn some thing else new.
There are still a few things I do the old way, like the buffer. I'm sure I will learn that one eventually. For now, I have enough in my emergency accounts that would cover me for over 6 months, if the sky fell in. Could easily move money from my "new to me vehicle" category and be buffered for several months but prefer to keep it in that category, as it keeps me hungry since I have variable income.
My suggestion? Keep working the program. Keep learning. The next thing you know, you will have your 6 month buffer, probably in less than a year. As you learn more, you will probably save more also. For me, it was all a matter of making choices each and every time I made a purchase. Sounds easy today and it was incredibly hard when I started, over 6 years ago.
You've got this. Look forward to following your success story.