Can we talk about the buffer?

The cash buffer is a huge part of why YNAB is a great way to manage your finances.  Reading other posts, I think I see a couple of different ways that people handle that buffer. 

 Some people seem to have a specific "Buffer" category that they keep funded.  Does that mean you then go in and budget the whole month at the beginning of the month, just leaving that pile of cash in the "Buffer" category?

I've been budgeting ahead, so when my November budget is fully funded, the next cash that comes in gets put in the relevant categories for December.  In an ideal world, my end-of-November paycheck is being budgeted into my January spending categories.

My way seems to be working ok for me, but I was wondering how other people manage their buffers!

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  • I've never built up a buffer.  When I'm paid at the end of the month, I allocate all the money for the next month - not only for that month's bills and expenditure, but also into long-term categories, like house maintenance,  non-monthly bills, saving for a holiday etc.  

    I'm not sure whether that means I'm buffered or not.  But I always have money for bills, and have money put aside for both foreseeable and unforseeable expenses.

    Reply Like 2
      • Katejo
      • katejo
      • 2 yrs ago
      • Reported - view

      zita  I do the same on ynab4. I am paid on the 27th usually and all my salary funds the next month and savings categories.  Buffer is in effect covered by the savings categories. 

      Reply Like
      • zita
      • zita
      • 2 yrs ago
      • Reported - view

      Katejo Thank you, it's good to know I'm not the only one doing this!

      Reply Like
      • Katejo
      • katejo
      • 2 yrs ago
      • Reported - view

      zita   Thère were many discussions on ynab4 as to how to deal with a buffer but this was a popular way of doing it.

      Reply Like
  • Here is the way I did it (caveat I did this in YNAB 4). I had a category called Buffer. I allocated funds to it. At the time I got paid on the 10th and 25th of the month. Eventually on the 25th of some month (let's say September) I was able to put enough money in the Buffer category such that the balance was enough to cover everything that I needed to budget for October. I went into the October budget and emptied out the Buffer category and budgeted for the month. I then hid the Buffer category because I didn't need it anymore. When I got paid on Oct 10, I assigned it the category Income for Next Month (not a thing in nYNAB anymore) and just let it sit there as it didn't show anywhere in my October space. Then when I got paid on Oct 25 I also assigned it to Income for Next Month. I then went to the November budget and assigned everything to categories. Rinse and repeat since 2014.

    Reply Like 10
  • I love my buffer. I use all of this month's income to budget next month, which means I am also using all of last month's income to budget this month. The funds were in my account before the month started. This allows me to use my budget categories to guide my spending and not be concerned with the timing of bill payments.

    If I want to take advantage of a great sale and use up all of my clothing money early in the month, and then do a massive pantry restocking run to Costco also early in the month, this does not affect my ability to pay the utility bills on time or any other scheduled payment.  All the funds for the entire month are ready to be accessed should I want them at any point.

    In YNAB4, I assign all income to next month option, so that all skips this month's header and shows up in next month's available to budget. In nYNAB (which I am currently trialing), I have chosen to budget out next month. This turned TBB red in December. As income is received in November and entered into my registers, it immediately gets sucked into the red vacuum of next month and doesn't appear in this month's TBB at all. I am aware of the 'stealing from next month' vulnerability, and I am being super vigilant in using the move-money tool to adjust any of this month's categories. Since all the funds for December will be received in November, by the time the month turns over, my December TBB will no longer be red and overbudgeted.

    I am an enthusiastic supporter of the temporal buffer (being a month ahead) and very vocal in encouraging friends and family to build it into their systems. It frees us from having to time paying  bills and enjoying an outing or buying groceries based on pay days.  That, to me, is the incomparable beauty of the zero-based allocation budget over the zero-based forecasted budget; all the timing issues are completely neutralized.  I haven't felt the personal need to leapfrog my income more than a month ahead, but that choice is based entirely on my situation:  my job stability, the predictability of my income, and the healthy state of my true expenses and emergency funds.

    Reply Like 13
    • Agent99
    • Working to Get Smart at budgeting, finances and life
    • Agent99.1
    • 2 yrs ago
    • 10
    • Reported - view

    In nYNAB, I would create a category for "Income for Next Month" and then sock all of my current month paychecks in that category.  At the beginning of the following month, I would release those funds to TBB(?) and then budget the whole month at once.   I'm buffered and use YNAB4.  If I ever did decide to use nYNAB, this is how I would handle my buffer. 

    Reply Like 10
    • Agent99 I use nYNAB and that's how I do it.

      Reply Like 2
      • Tif_Ann
      • Tif_Ann
      • 8 mths ago
      • Reported - view

      Agent99 This is how I do it as well. When I get paid I set the category to my Income for Next Month Category and then at the end of the month change the category (in the account view) to To Be Budgeted.

      Reply Like
      • bobbucy
      • Tomato_Snow_237e7f17927
      • 8 mths ago
      • Reported - view

      Agent99 This largely my approach as well with the slight variation that I receive income into TBB, then move it to Income for Next Month.  Then I move it back to TBB when I have received all income for the month and am ready to budget the next month.  I'm running it through TBB so that my income figures in reporting are always correct.

      Reply Like
      • ynaber2613
      • ynaber2613
      • 6 mths ago
      • 1
      • Reported - view

      bobbucy Same as you, goes to TBB first then immediately XFER to Income For Next Month buffer.  When next month starts I budget all categories since I have goals for most which makes TBB negative, I cover TBB with the buffer.

      Reply Like 1
      • Tif_Ann
      • Tif_Ann
      • 5 mths ago
      • 1
      • Reported - view

      bobbucy If you change it back at the end of the month to TBB as the category, your income reporting is correct. It also allows you to not have to negative budget that amount to start the next month.

      Reply Like 1
      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 5 mths ago
      • 4
      • Reported - view

      Tif_Ann It's a pick your poison scenario.  If I were to release my buffer on the budget page, total budgeted each month would be zero.  I want to see how much I budget, so I release my buffer with a transaction.

      Others claim that the way I do things messes up income for the income vs. expense report.  I don't get the concern.  Budget income is useful for the budget, but meaningless for credit or income taxes or any other purpose I use income for.  And the point of zero based budgeting is that I budget into categories before I spend, in some cases several months or even years before I spend the number.  So the idea of matching this month's income to this month's actual expenditures doesn't make sense to me.  This month's budget income should match to how much I budget this month.  I'll spend less than that amount in most months, and a lot more in months where a big True Expense comes due.  That's normal.

      But the major big deal is, if YNAB still had a program-supported Income for Next Month, or if it had any program-supported replacement that allowed a user to shift TBB from the current month to a future month without the possibility of inadvertently stealing it back, none of these workarounds would be needed.  They're needed because YNAB backed away from one of the most important, successful parts of the methodology that existed in prior versions of YNAB.

      Reply Like 4
  • OK- sounds like most of the folks that were using the prior version of YNAB are used to sticking money for the next month in one place, then "releasing it" to be budgeted at the turn of the month.  Makes sense that in the new version those folks were continuing to work the same way (if its working, why mess with it!)

    I've only ever used nYNAB, so that never occurred to me.  From the get-go I've been budgeting my income down to zero, and adding money to categories in the next month when my current month's categories were taken care of (if there was still money in my "TBB" line).  You do have to be careful when doing that, because if you go over in a category you don't automatically get the red negative "TBB" in the current month (as HappyDance mentioned), instead it shows up as a problem in the following month.    The budgeting next month so that current income gets "sucked" in is an interesting twist I hadn't thought of!  Will have to think about that.

    I've been using my "Age of Money" number to tell me whether I'm buffering well or not- if its 30 days+, I feel like we're in good shape.   When it drops, I know we need to tighten things up.  

    Reply Like
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 2 yrs ago
      • 2
      • Reported - view

      Hot Pink Mill (f9e491b4de82) 

      On the subject of letting income get vacuumed into next month, it might be a way to scrape or chip away an imperceptible layer of savings from this month.  Say you budget out your next month taking your TBB negative, as you reduce a spending category this month by $1.37 here or $5.15 there from your various categories as the month proceeds, it will lickety-split disappear into next month, and you wouldn't even notice the slight decrease. Done repeatedly that could help a person trim down their spending while helping to snowflake the buffer build up.

      Reply Like 2
      • jenmas
      • jenmas
      • 2 yrs ago
      • 4
      • Reported - view

      Hot Pink Mill (f9e491b4de82) my concern with using Age of Money as guidance is that it doesn't always mean what you might think. The first time I trialed nYNAB was December 2015. I was unemployed at the time. Throughout my trial, my AOM kept going up and up because I wasn't receiving any new income. Obviously I was aware that I was unemployed and therefore I shouldn't think that this rising number was telling me that I was in a good place, but still. . .

      Here's how living on last month's income helped me out while being unemployed: I found out in early September that I was going to be laid off at the end of the month. The September paychecks on 9/10 (for the pay period 8/16-8/31) and 9/25 (pay period 9/1-9/15) fully funded October. On 10/10 I received a normal paycheck for the period 9/16-9/30 that funded half of November. I also received a leave payout of 10 days that funded the other half of November. So it wasn't until the December budget that I touched any of my severance money and only had to dip into my Loss of Income category to cover about 10 days in March 2016 (technically I assigned my lump sum severance to Loss of Income, but I'm talking about the original balance of the category). By then I was on an invoicing cycle with a consulting gig and went from there to full time employment by the end of spring.

      Reply Like 4
  • I have done it both ways. My preference is to park all my next-month money in a category called buffer and then budget it with my husband during our monthly budget meeting. Honestly, this has been the best thing I've gotten out of YNAB -- I have so much peace about having a buffer.

    Reply Like 8
  • Yeah, I think some of how you choose to manage it depends on how you are budgeting. A single person who has no one else they have to have budget discussions really has a bit more leeway in general with how they manage the budget. But in a partnership the awareness has to be present for all involved, and that would preclude things like just letting money jump back and forth between months and let the software deal with it.

    Reply Like 4
  • Having the ability to assign this months earnings to next months to be budgeted is and was the only  feature of YNAB4 that was/is unique. That feature alone radically changed our financial life. We had taken the Financial Peace University class where we were taught to do a written budget every month, before the month began. It seemed to us that YNAB was designed to implement that guideline. We were already debt free when we completed Financial Peace University and had more than a month’s income when we found YNAB. 🚀 (But I do miss YNAB4 😢

    Reply Like 10
  • After migrating to the cloud based version of YNAB, I decided to follow the method as designed. It took me a while to get adjusted, but now it works great for me. Although I am able to fund a full calendar month into the future, I still maintain a category names 'buffer' for some unexpected expenses like health care deductible and other costs to take care of. I do maintain quite a granular budget for all upcoming (committed) expenses, but sometimes something unexpected pops up.

    The buffer category (just €1,500) allows me to take care of such expenses without having to WAM throughout my budget. Next month, I just make sure the buffer is replenished.

    My budgeting method is to fully fund next month's expenses when I get my monthly salary (around the 25th). All TBB still left over goes into additional mortgage pay-off category.

    Reply Like 3
      • Colin_G
      • Colin_G
      • 2 yrs ago
      • 1
      • Reported - view

      Optimist That is how I do it. In reality I see a buffer as  no  more than rainy day savings.

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • 1
      • Reported - view

      Optimist That's called an emergency fund.

      Reply Like 1
      • Optimist
      • Optimist
      • 2 yrs ago
      • 1
      • Reported - view

      nolesrule I guess you may be right. Sorry -- I am not too strict in applying the right terminology. I guess my emergency fund is part of the buffer? I sure am off the paycheck to paycheck cycle in the sense that I fully fund all categories before the new month starts.

      Anyway, after some four years of YNAB4 and now the web based version, I have learned that although my budget now accounts for all my true expenses, there seem to be unexpected events every now and then that I need to take care of. In that sense, an emergency fund only improves my buffer, correct?

      I am working to pay off my mortgage with all excess funds and when done, I am hoping to be able to fund many more months in advance than I do right now -- extending the buffer.

      Thanks for pointing out my mix up of terms, perhaps we should create a list of definitions that are part of the method? Perhaps such list already exists?

      Reply Like 1
      • Colin_G
      • Colin_G
      • 2 yrs ago
      • 1
      • Reported - view

      nolesrule Can't really  get my head around the difference but that is probably because I do not bother too much about the ynab way and do it my way instead :-). I just budget into next month and keep spare cash in savings accounts. If I am short I take it out of savings - so savings is my buffer/emergency fund call it what you will.

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • 3
      • Reported - view

      Colin_G A buffer is money used to get ahead in budgeting. And practically speaking it doesn't need to be bigger than a month because that's all it takes to get off the paycheck to paycheck budgeting cycle. So essentially it's money reserved to make your budget management easier.

      An emergency fund is money reserved in your budget to deal with things your budget wasn't set up to  handle.

      These are treated differently in budget management, because the practicality of dealing with them in the budget as needed is different. One is for getting ahead in the budget (but getting too far ahead has its own set of inconveniences and problems), the other one is for handling unexpected things in the present.

      Reply Like 3
      • Colin_G
      • Colin_G
      • 2 yrs ago
      • Reported - view

      nolesrule But I am already where I want to be re my budgeting so a buffer is redundant whilst traditional savings seem entirely appropriate. As you with probably gather, I am not sold on the ynab way anymore. I am a user of the software and not the philosophy.

      Reply Like
  • I've simply created a saving goal called buffer. Then I decided how many months of my expenses I want to cover (6 months as for now) and put the money every month until I reach the goal.

    I'm paid for hours, so if a month is particularly quiet I may end up gaining less then I'm aspected (unrealistic, but budgeted)

    I also have an Unemployment fund (in case I lose my job entirely) and an emergency fund (for unexpected expenses not related to my job situation)

    Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • 1
      • Reported - view

      FesterVattelapesca I don't understand, you have a 6 month emergency fund, but you also have an income replacement fund and another emergency fund?

      There comes a point when the conservativeness results in holding too much cash for your needs and could be better deployed elsewhere.

       

      I have an Income replacement fund that holds 6 months of expenses. And I have home repair and vehicle repair categories, (medical is our HSA) that are funded monthly based on potential need using rules of thumb. Other than that I have a "buffer", which is all money received in the current month, which then gets budgeted all at once in the next month (I still use YNAB4 so I don't have to deal with temporary holding categories).

       

      More than a month is overkill. If you have variable income, you handle that with a holding category for smoothing income. You add to it in high income months and remove from it in low income months.... but your monthly budgeting should be based on average income. Turn every category into a Rule 2 category and things get much clearer.

      Reply Like 1
    • nolesrule  

       

      Hi

      I have an emergency fund dedicated to my own country: in case something happens to my family I put aside enough money to buy a last-minute plane ticket,  transport to and from the airport and money to spend there if needed. I don't a bank account in Italy anymore, Maybe this is something I should fix.

      An unemployment fund (6 months of spending at my current lifestyle) that is what I'm considering as my buffer.

      An emergency fund dedicate to my life in UK: I don't have saving allocated for healthcare or other things (other than technology) just a big pot I called emergency UK.

      I'm aware I'm too conservative with my money now (those 2 funds constitute 3/4 of my saving) and next here I'm planning to reallocate some money in some type of investment.  The big decision would probably be if in € or £.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • Reported - view

      FesterVattelapesca There's nothing inherently wrong with being overly conservative, as long as you are aware of it.

      When I criticize it, it's because someone is using YNAB in 2 different ways to accomplish the same thing... holding a 6 month emergency fund in a category while also budgeting out money into the next 6 months (just as an example) is no different than holding a 12 month emergency fund with the exception that when you need to change a budget monthly nominal value, you have to make a lot more changes to your budget.

      Reply Like
  • Hot Pink Mill (f9e491b4de82) I'm only a few months into YNAB, but I take a similar approach.  After I've budgeted for the current month, I'll move to the next month and go through the same prioritization process of funding my categories. 

    This provides me more clarity than a buffer/money for next month category in the current month. (That's how I handled things pre-YNAB, when I attempted to allocate money using different savings accounts) It also helps me realize true expenses that I may not have anticipated. 

    I'm currently hoping for an AOM of at least 60 days (for insight into the past) and to have my categories funded for about 2.5 months: this month, next month, and half the following (to secure the near future).  

    If there's still money to-be-budgeted after that, I can return to the current month and can safely consider allocating more $ towards a savings goal  or moving cash into a less liquid vehicle like an investment account.  

    Reply Like 2
    • Maroon Elk (88a000405839) Nice. Same principle here, but 3 months - well that's the goal!

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • 11
      • Reported - view

      I'm not a fan of getting more ahead than being able to budget the entire next month before it starts. Any additional can be stored in a category called Emergency Fund or Income Replacement Fund, and budgeted if/when it is actually needed. Practically speaking, the further ahead you budget, the more effort you have to make when you need or want to make budget amount changes to categories for one reason or another.

      Budgeting 3 months out. Car insurance goes up, that's 3 screens you have to make the change in. Not to mention not only do you need to increase the car insurance category, you have to decrease a category elsewhere.

      Furthermore budgeting money received in current month directly into a future month results in potentially Stealing from the Future. (They have been promising to fix this for almost 2 years now.) The farther out you budget directly, the farther out you have to look at your budget any time you make a change in an earlier month. So it's best to funnel all income that's going to be used in a future month through a budget category and released in the month you plan to use it.

      Reply Like 11
    • nolesrule Yeah, there are tradeoffs. I definitely like moving through the priorities for the calendar month when if I can. Maybe because I'm a beginner, but I find it's a helpful to go ahead and give the money more specific jobs.

      Re: Stealing From the Future. I think budgeting ahead helps prevent that for me, there's more scarcity in my monthly budget....and if I have to roll with the punches I try use the money I have allocated for the current month, if that doesn't work I have to make a conscious decision to move money back from the next month. 

      I do have an emergency fund for income replacement and other catastrophes, but I prefer to have other lines of defense to use before that. 

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • 4
      • Reported - view

      Maroon Elk (88a000405839) When I use the term Stealing from the Future, I am referring to a specific shortcoming in the software that can allow you to siphon money that you explicitlybudget to a future month from current income into the current month without giving you any warning in the current month. It requires you to go look in the furthest month you have budgeted to in order to be sure you have not overbudgeted across all months.

      It's actually quite sneaky and can be a gotcha if you don't pay attention and then spend the money because your category said you could.

      This could easily be remedied if they actually warned you in the current month that you are overbudgeted in a future month (and by how much).

      There is actually no way in nYNAB to absolutely keep your months revenue neutral when moving money around unless you explicitly use the Move Money Tool, but that has its own set of limitations.

      Maroon Elk (88a000405839) said:
      I do have an emergency fund for income replacement and other catastrophes, but I prefer to have other lines of defense to use before that.

       If you have an emergency fund that can handle the income replacement and other catastrophes, then your other lines of defense are really just additional emergency fund, whether you budget them out or not. The phrase for what you are doing is called mental accounting. YNAB itself is mental accounting, but there comes a point where the mental accounting makes you overly conservative beyond the common sense advice.

      I hold that one month ahead is good, and budgeting out the entire month in a single pass is even better, because it allows you to get a more holistic view of your situation. But beyond that is just filling in the budget to have it filled in.

      In a real emergency or loss of income situation, you are going to rearrange your budget to account for said emergency anyway, so budgeting money out ahead of time into additional months creates an additional administrative headache... unless that's your idea of a good time.

      For what it's worth, I've had this discussion a million times in the old YNAB forum. There's just no real value in budgeting more than a month ahead. By the time you get to that 3rd month (1. current month, 2. next month, 3. month after next), you've received another month's worth of new income... and if you didn't, that's what the income replacement fund is for... and as I stated earlier you're going to pare down your budget from the nominal amounts you use when you do receive income to make that income replacement last longer.

      Reply Like 4
  • We have never had a buffer and it's worked for us.  We keep all of our sinking funds in our checking account, so it holds anywhere from $3000-$5000 at a time.  We do all our spending on a rewards CC that's paid off in full about twice a month. 

    I really enjoy receiving our pay checks throughout the month and budgeting them as they come in.  It really works for us, but I can see the appeal of the buffer.  It just never was something I felt we needed.

    Reply Like 1
    • eloquentz
    • Numbers Wizard (Accountant), Acoustic Artist (Musician) and Jill of all Trades (Wife & Mother)
    • eloquentz
    • 1 yr ago
    • Reported - view

    I am still playing catch up, having started using YNAB with an overdraft in my account (so every month starts with "over spending from last month" until I get out of the whole.  When I get to it, I have a category for 3-6 months expenses in savings.  Once that is funded, I plan to start a new vehicle savings category as well.

    Reply Like
  • My ideal Goal is to be 3 months minimum ahead on budget and $10k in Emergency Fund. So, It depends where you are, The buffer can help you Jump one month ahead at a time and then use it to fund your  emergency fund category. First start funding the buffer till you reach one month expense then jump to the following month. Also, make sure that you don't confuse Emergency fund with the buffer. Emergency fund is helpful for loss of the job, high deductibles, medical bills, ...

    Also, before doing all this all your debts except your mortgage must be paid off.  

    Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 8 mths ago
      • 1
      • Reported - view

      Slate Blue Cartridge You mean one month ahead in the Budget, 3 months in an income replacement fund, and properly funded categories for home repair, car repair, emergency travel and medical.

      Reply Like 1
      • lindsay_g
      • Beige_Banjo.3
      • 8 mths ago
      • Reported - view

      Slate Blue Cartridge You need emergency back up alongside debt repayments, or the credit card will be back out at the first unforeseen trouble. 

      Reply Like
    • lindsay_g 

      Reply Like
  • the buffer is a tool that will help you get ahead 2,3,4,5,6 months ahead.  You keep putting the money  on the buffer when the total amount equals one month expense you use it to fund next  month and your paychecks will fund the month after that. Now your are 2 months ahead then you start again the same cycle. 

    Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 8 mths ago
      • 3
      • Reported - view

      Slate Blue Cartridge No. "The Buffer" in YNAB-speak is to set aside money received this month to fund your budget for next month in order to break the paycheck to paycheck budgeting cycle. The "buffer" doesn't even need to be one month's worth of income in order to make the transition into a buffered state, depending on your income cycle. But once you get there, yes it will be a full month of income.

      And while you can do more, it's better separate those additional months and to refer to  what those additional months really are... money to fund your budget in the event of income interruption. Keeping them separate will also make it easier to build and release the correct amount of funds each month so that you really are only budgeting one month using the previous month's income without having to ensure you aren't using to much or too little.

      Reply Like 3
  • Judging from the discussion and debate in this thread there is still a great deal of confusion in my mind on the efficacy of creating a "Buffer" category or "Income for Next Month" category in my budget in nYNAB.  If using nYNAB as designed would I not leave income in TBB for the current month (thus treating TBB as the "Buffer") and use those funds the following month.

     

    If I have explained myself poorly it is clearly an opportunity for the developers behind the tool to take another whack at creating an 'official' explanation.  This thread is as clear as mud.

    Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • Reported - view

      jmsidhu If you just leave it in TBB, you're not giving every dollar a job. Furthermore you can pull it out of TBB by adjusting your current month budget which tends to happen from time to time, whether intentional or not., which can result in changing the amount of money you actually intend to be used to populated your Budgeted amounts in future months.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 6 mths ago
      • 4
      • Reported - view

      jmsidhu I have no such confusion. You want to keep TBB at 0 to follow Rule 1. Also, the "official" solution isn't necessarily the best one. I prefer to budget an entire month at once with last month's income.  If it helps, here's my process (I get paid fortnightly, AKA every two weeks):

      1. Set up recurring paycheck transactions in the scheduler categorized as "Income for Next Month".
      2. After I receive my last paycheck of the month, go to All Accounts view and filter by "Category: Income for Next Month".
      3. Select them and recategorize as "To be Budgeted".
      4. Go to next month and budget the entire month.
      Reply Like 4
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 5
      • Reported - view

      Superbone Wouldn't it be nice if you could just set it to an Income for Next Month category and the software would automatically have it in next month's TBB for you immediately? 😉

      Reply Like 5
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 6 mths ago
      • 3
      • Reported - view

      nolesrule Hey! That's a GREAT idea. It's too bad the YNAB creator didn't think of that. Maybe we should put in a feature request.

      Reply Like 3
      • sgarelick
      • sgarelick
      • 6 mths ago
      • 5
      • Reported - view

      Superbone I've been doing it slightly differently and am wondering if there's a significant difference. 

      1. Set up recurring paycheck transactions in the scheduler categorized as "To be Budgeted".
      2. Move money in "To be Budgeted" to "Income for Next Month"
      3. After I receive my last paycheck of the month, move all the money in "Income for Next Month" to "To be budgeted"
      4. Go to next month and budget the entire month.
      Reply Like 5
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 6 mths ago
      • 2
      • Reported - view

      sgarelick 

      You're on track.  Your method will have the same result as  the method used by Superbone

      I am currently using the same method as you are using: recording all income as TBB in the month received, budgeting it to a holding category in the month received, releasing it all back to TBB after the last income is received, then  going to next month to budget the entire month's income in one budgeting session.

      I always make sure that the # of Inflows this month is the # budgeted  in the next month. I wish YNAB made that an option for me because I sometimes get out of sync and it takes me forever to figure out where I've gone wrong for the dumbest amounts (usually end-of-month interest deposits).

      Reply Like 2
      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 6 mths ago
      • 2
      • Reported - view

      HappyDance 

      Actually, budgeting exactly the income received last month is not technically necessary.  I record all inflows to Buffer, and release the exact amount of my par budget to TBB each month.  It will never exactly match the inflows, but that's okay.  It will exactly match how much I want to budget each month.  That's de-coupling the timing of income from the budget, as dakinemaui has talked about a bit.

      Yeah, it's not for everyone.  But since one of my major areas of focus is how much to draw from investments, holding the total amount budgeted constant from month to month simplifies that issue.

      Reply Like 2
    • nolesrule it occurs to me that leaving it in tbb is no more or less different than just putting it in an income for next month category at least for the purposes of rule 1. It will get a job on the end so I personally wouldn't get to hung up on the semantics of it. Now the accidental adjustments throughout the month would be annoying and reason enough in my book to not just leave it in tbb until I'm ready to budget for the following month.

      Reply Like
    • Hi jmsidhu !

      We suggest budgeting for the current month first. Once all expenses are covered there, we suggest moving forward to budget for next month. This video goes over saving funds in the current month or budgeting ahead. However, as seen in this thread, some YNABers prefer using an Income for Next Month category so they can gather all the funds they plan to use for next month and budget it all at once.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 1
      • Reported - view

      Patzer The difference is  that for most people it is the income that drives the budget. In your case though the budget drives the income. Your way makes sense for your needs, and if this type of system is still around when I'm in your position, I would likely do the same thing.

      Reply Like 1
      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 6 mths ago
      • 3
      • Reported - view

      nolesrule Is what I do all that different from what we'd recommend for someone who has variable income?  We'd tell such a person to smooth out the income and budget a level or nearly level amount each month.  For teachers paid 10 months out of 12, we'd even recommend a specific deferred income category to accomplish this.

      Before nYNAB, I budgeted a somewhat variable amount, even in retirement.  It was the elimination of Income for Next Month that spurred me to think about what made the most sense for me, which is to smooth out the irregular interest income from on-budget accounts, effectively treating that the same as investment income in off-budget accounts.

      In broad theory, someone who is still working could do this.  It would make sense if there is one purpose for all money over the flat amount designated each month for budget.  In my case, that one purpose is investing.  That's reducing budget income by taking less of a draw now, but it could just as easily be throwing all income in excess of the desired monthly budget at investments when in the accumulation phase.  Or throwing it all at charity, for people more civic-minded than I am.  Or putting it all in a trust for kids or grandkids, whatever.

      Reply Like 3
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 1
      • Reported - view

      Patzer Well, when you put it that way, that's pretty much what I do.

      Reply Like 1
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 6 mths ago
      • 3
      • Reported - view

      Patzer 

      I think that may be the next level up.  For now, I use the time warp of budgeting every bit of new income this month in next month, and I use that self-imposed discipline of delay as a means of reducing impulse decisions and impulse spending.  I received a generous $1K birthday gift from my mother this week, and it will sit in my holding category until I budget July.  In a way this also lets me savour what I might spend it on many times before finally increasing a category(ies) by a sudden $1K.

      Reply Like 3
      • ynaber2613
      • ynaber2613
      • 6 mths ago
      • Reported - view

      sgarelick I use another variation of the same theme.

      1) Budget all income to TBB as it comes in.

      2) Immediately move TBB to category "Income for Next Month (INM)", I have a budget amount setup for that category for my par budget so when it is green I know INM is fully funded, I let it keep growing if additional income comes in.

      3) At the end of  the month I true up all underfunded categories and send excess funds for some categories to INM.

      4) I go to next month and auto budget all categories which leaves TBB negative for the amount of my par budget.

      5) I cover the negative TBB with INM.

      Reply Like
      • lindsay_g
      • Beige_Banjo.3
      • 5 mths ago
      • Reported - view

      Patzer Teachers are paid ten months out of twelve?

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 5 mths ago
      • 3
      • Reported - view

      lindsay_g  In the US most K-12 and higher ed faculty’s pay is based on the school year. This means that if you teach in the summer, you are entitled to extra pay. Some places you actually receive the pay only for the 9 - 10 months it is for and have to budget it yourself to cover the summer, and in other places the pay is prorated across 12 months so that you still receive a check each month (that is how mine works, and since I use YNAB, I really wish it didn’t work that way!) 

      Of course, you can’t not *work* in the summer. K-12 folks have continuing ed, preparation, classroom setup, etc. in the summer, and higher ed folks have teaching prep and research to do over the summer, but we pretend like we only officially work for 9 months. 

      The saying I’ve been using lately to explain my summer is “I don’t have to do s### but I have a lot of s### I have to do.”

      Reply Like 3
      • lindsay_g
      • Beige_Banjo.3
      • 5 mths ago
      • 2
      • Reported - view

      WordTenor I hear you. I'm a teacher too and one of the things I'm doing just now is organising all the work I need to have with me over the summer...

      We get paid monthly until June and then we get two months together. So I just had a double pay packet but won't be paid again till August. (Although I keep freelance work and exam board marking ticking over.)

      Thanks to YNAB all that money is already 'spent'. Such a strange feeling to be so rich and so poor both at the same time!!

      Reply Like 2
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 5 mths ago
      • Reported - view

      lindsay_g Aha! So you are already totally in the know. Yeah, the way we do educator pay is so weird! I wish I had all my summer up front, though. I would spend it at a different pace—groceries I’ll spend monthly, but three months of my vacation money all at once would be helpful as I’m trying to book flights and whatnot now, and not in July.

      Reply Like
      • jennie_hi
      • jennie_hi
      • 5 mths ago
      • Reported - view

      WordTenor I pretend that my husband only works 10 months. It is kind of fun. I don’t think he agrees. I do like it though when he picks up an extra class during the summer. We also get the pay over 12 months. I think the only positive is that less taxes are taken out of his pay because of this. 

      Reply Like
    • jennie_hi I wouldn't agree.  The summer is hardly long enough to pay back the temporal/chore/relationship/living debt created during the school year.  There's simply no way to get everything done in terms of seeing family/friends that you never had time for, professional development/preparation, chores because the house is a wreck from the past 10 months, errands and appointments because sub plans are more work than they're worth for an appointment, projects that you swore you'd do in the summer since during the school year is obviously off-limits, and actually recharging personally. 

      At least I can have a bit of time each day to relax (or I'm still running around, feeling like I'll never get ahead).  It's crazy to me that other people get to go to work and come home to spend time with their family/take care of things.  This is just my perspective; I'm sure there are a few teachers out there who can balance work and life during the year and actually have a fulfilling summer.  While I love teaching, love my students, and think it is a mightily worthwhile profession, I have a hard time recommending the career. 

      I'll be honest, right now, I'm a bit demoralized that summer is half-over and my lists are still quite long.  I hate being in debt-reduction mode for my non-finances, especially because I know I'll just be racking it up again come August.  I have to be hopeful for my family's and my students' sakes, but I do wonder how much of that hope is smoke and mirrors.

      Reply Like
  • Move Light Sound Life said:
    summer is half-over

     Hey, summer didn't even start until 2 weeks ago, you've got 82 more days of summer! 😉

    Reply Like
    • jenmas *sigh*

      Thanks for the encouragement. :)

      Reply Like
      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 5 mths ago
      • Reported - view

      jenmas 

      On the other side of the equation, as a parent there's 50 days until the kids are back in school.  Or rather 

      49 days 7 hours 58 minutes 18 seconds

      Day 26 of my captivity.  The natives are "SOOOOO.Bored. Mom!  No, I don't want to do reading, no, I haven't done my chores, no, I don't want to help pick out school supplies!" 

      Not that I'm counting or anything.   

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • Reported - view

      jenmas My kids are getting short-changed due to the move. School ended on June 21st here, and in the new location it starts August 26th

      Reply Like
    • nolesrule I have one month left.  My last four summers have been shortened because of calendars moving earlier.  

      Reply Like
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