New YNABer - what to do when income paid at irregular intervals?
Hello! I'm a new YNABer - apologies if this question has been answered previously (can't find an answer in the forums).
I have received as a lump sum the amount of income I'll earn for the next 6 months. I want to budget monthly, but my money won't come in monthly. I've set up my December budget with the relevant categories (groceries, rent, etc.), but what's the best way to account for the fact that I've already received my income for these next few months? Should I create a budget category for each coming month, eg. 'January', 'February', etc and budget a lump sum (my monthly expenses) into each category? Is there a better way to do this?
Thanks very much!
I'm no expert on ynab or budgeting but I do see two different ways you could deal with it. A) budget each of the next 6 months, starting with the essentials for each month and working your way down the list. Ie. Budget for rent / mortgage for Dec, Jan, Feb, etc. then groceries for each month, then utilities, etc. Then use what's left to budget for everything else.
B)Stick the money in a savings account, decide how often you want to get paid (weekly/monthly/etc.) and pay yourself on a regular basis. If you get paid 26000, you could pay yourself $4333.33/month or $1000/week. In your budget have a category for your saved income and when you get the lump sum, budget it to there. When you take money out of savings, move the same amount out of the category and into to-be-budgeted. Now you can budget that income like everyone else and there is lots of example of how to do that.
Keep in mind this if you're going to get another shot of income in, say, June, then ideally this money will carry you THROUGH June. That way you don't need to wait on the June income to pay for expenses occurring at the end of June. In other words, the DI category goes to $0 in the same month you get more income. Keep this in mind when working out how much to take out each month (and put in this month).