Age of money drop?
Can someone explain why my Age of Money would drop from 225 to 160 days in a month? I’ve made no large expenditures or anything in the last month.
I don't know if this is your particular issue, but I used to see drops like that when I had substantial transfers between checking and savings. That was because I wasn't actually "transferring" it within YNAB. For example, if I transferred $100 from checking to savings, I'd see an import under both: a $100 deduction from checking and a $100 addition to savings. The both had bank-provided "PAYEE" descriptions that had the word "transfer" in them (something like "Checking Transfer"; I forget exactly what it looked like) so I thought YNAB recognized the transfer. Instead, I have to change the Payee to YNAB's transfer option. It looks like the attached image to me.
Previously, YNAB thought I was simultaneously spending the $100 from checking while earning $100 in savings. That meant the money I had was seen as "spent" and deducted from AOM. When you use the "Transfer to:" description in Payees, it doesn't count against AOM.
If that happens to be your case, you can always go back through the old transactions and fix them. Easiest thing to to is list them by Payee and they'll all be grouped together. The AOM calculation will automatically fix itself.
The fact that it was a nearly linear increase until the drop tells me it was probably feeding off your starting balance right up to the drop. So now it's starting to map your spending to income events that happened after you started YNAB. So you'll begin to see the ups and downs of how AOM actually behaves.
I think it must have been the transfer between an on-budget account and an off-budget account. I transferred a large sum from my on-budget checking to my off-budget investment account this month. I’m not quite sure what you mean by feeding off my starting balance? I started New YNAB back in August 2019 - does that mean I’ve lived off the money I’ve had since August 2019? I’m not sure what the ups and downs would be - why would my age of money drop at all?
Blue Major said:
does that mean I’ve lived off the money I’ve had since August 2019?
Probably. Look at your net worth (on-budget, cash-based accounts only) as of Aug. 2019. Divide that by your average monthly expenses. That's about how long that money would have lasted before transactions started pulling from newer income events.
The purpose of Age of Money is to escape the paycheck to paycheck cycle. If you are not in that process, the number becomes less meaningful.
Jumping from 225 to 160 means you went from spending money you entered into the budget 225 days ago to spending money you entered into the budget 160 days ago. So you could have had an income spike around half a year ago? At any rate, with numbers like that, Age of Money isn't particularly useful. Net worth becomes a better metric to focus on.
You can find the nitty gritty details of how Age of Money works in this article.