Expenses too high?
I'm struggling to form my question. I'm in the middle of the month and I'm concerned money coming in is not going to equal what I have going out.
I keep adding expenses as I figure this out, such as saving for taxes at the end of the year. I think my question becomes, is there some way to look at my income versus expenses? I feel like I'm going to be short this month but I don't really know how to figure that out.
Like I said, I'm not even sure how to ask the question that's in my head.
The best way to know your income vs. expenses is to import and categorize your transactions for 1-2 full months and use the Income vs Expense section under Reports to track your behavior. It takes a little time if you're just starting out, but I feel it provides a true picture.
Before that happens, though, I sometimes estimate my expenses and add them as Goals to each category. Then my Underfunded number for all my categories this month will roughly predict how much I need.
If it turns out your expenses do start to exceed your income, that's when the Roll With the Punches principle of ynab comes in. You can move things around, maybe choose not to buy something, or put off saving for another month.
Welcome to the YNAB party. In the beginning things can be a little overwhelming when you are suddenly aware of everything that you realize you *need* to budget for that you never thought of before you started YNAB.
Take a deep breath!
The key is to find the balance of what needs to be budgeted between now and next pay day with the dollars I have vs what things will need to be budgeted for in the future that it would be easier to "spread out" budgeting for.
It's a tricky question - and a very personal situation that only you will know the answer to.
As someone who has lived at or in the red for many years, sometimes there just aren't enough dollars to go around. And when that is the case, you have to prioritize what is most important (i.e. bills due between now and pay day + groceries and gas), and the rest is going to slide. It was a big relief for me to know what I could actually cover, and where I KNEW that I was over spending.
So saving for taxes at the end of the year is GREAT! But right now, if you can't cover the rent/mortgage that is due at the beginning of the month, then the mortgage needs to come first, and the taxes are going to need to wait. As you get a handle on how to budget, this will smooth out and you'll find a few more dollars here and there that you can squeeze out of your budget.
(It's probably also helpful to remember that while it might seem scary right now that you can't fund all the categories at once if you didn't have YNAB you wouldn't know that, which likely means that come tax time you'd be squeezed, too).
And another note - sometimes you can 'find' extra money in your budget. If you get paid bi-weekly, then you will probably have a "3 paycheck month" coming up in a few months - that money could help pay your taxes. While you aren't supposed to lean on money that isn't IN your accounts yet, if your job is stable, then knowing that can give you a little peace of mind in the moment. Sometimes in the beginning you have to rely on those things in order to get through. If you don't get paid bi-weekly, then likely you'll have some bigger checks coming up that you could use the surplus to help offset.
Anyway, if you want to talk strategy in detail, feel free to message me - I've been in your shoes for a long time, and am finally getting out into nicer shoes now!
Okay, I found the expenses reports. YNAB is so different and maybe I am just too used to money in vs money out I need to give it more time.
I feel like I am spending too much and need to cut back where I can. And here I am not sure where I stand, I guess I don't want to get a little behind each month and not realize it till it is too late. (Still struggling with forming the correct question)
Are you checking your categories before spending to make sure you have enough funds? Are you Rolling with the Punches if you overspend a category and moving funds from a lower priority category to cover? These are the things that will help you not to overspend.
If you're relatively new to YNAB, it will take a little bit of time to get comfortable and learn to spend within your limits. YNAB is a zero sum budget which helps keep you within your limits. Follow the 3 rules and you will start to get ahead.
Thanks for all the replies, I think maybe I need to go back and revisit some of the video explanations on ynab.
And give it a little more time, this is very different than any budget I've run before. But I've been budget/less for years now. And I really think the basics of YNAB are good.
I'm now budgeting for things I used to just scramble and try to figure out how to pay. Like real estate taxes at the end of the year, or Christmas. And I guess that's where my nerves are on edge because I feel like I'm paying out so much but I guess it'll be easier when those bills come up and I have the cash.
Somewhat related, watched some videos this morning and saw something interesting. when I hit the lightning button it shows me that I'm underfunded by $1,600, and today is the 23rd of the month. I should have another $800 income before the end of the month.
So it seems like I'm over budgeted by $800 a month roughly? Does that sound correct?
I think I got carried away setting goals for everything, and set too many goals? And maybe I need to trim those back a little bit?
yes, simple is better in the beginning! I think one of the ways people get bogged down (and then don't continue) is because they try to do too many things at once
This is so common. I think people watch all the videos and nick true and add the toolkit and wish farm and ... the basic concept is so simple yet so different. Add all your accounts that have money or owe money as budget accounts. Leave loans and mortgages out. This should put an amount in To be budgeted (TBB) at the top.
last thing is, if you are not a month ahead (and most people starting YNAB aren’t - more like a month behind 😆) then you have to budget every time new money arrives in your account. So payday - allocate that cheque to the budget. Sold something on Craigslist- allocate that to the budget. Like Superbone said “Every time you get paid, just think to yourself, what does this money have to cover until I get paid again and then budget to that.”
if you just do that for the first couple of months then you will be fine. Wait until you get the basic budget nailed down before going off into other areas.
Caution - i will say that if you have your bank accounts set up to manage saving goals (which is NOT how YNAB works) then make sure you have that amount in a budget category. I messed that up at first. For example if you have a bank account set up to save for a car with $2000 in it and you add that account to YNAB budget accounts, that $2000 will be in TBB and you might accidentally allocate that money to other categories. Then later you wonder why you don’t have any way to use the car money for a car. So if that is the case set up a car budget category and make sure you assign the $2000 to that
Thanks to all with your suggestions especially about making it simpler and not using goals. I eliminated goals last month and now that the new month rolled over this is so much easier and less stressful with things mostly green.
So anybody else reading this that's newer, my recommendation is just do a few things each month, simple is better because the concept is different than standard forecast budgeting.
I set out and said if I'm going in I'm going to go all in. So I just added everything into YNAB and made it over complicated for myself.