A little confused about how months work...

Apologies if this has been asked/answered elsewhere - I did a decent bit of searching and couldn't find anything that cleared up my confusion. This may sound a bit silly - and I might be overlooking something very obvious - but I'm a little unsure about how to budget using different months. I've never really had enough money to start setting extra aside for next month's budget, so it just hasn't come up in the short time I've been using YNAB. However, eight weeks of unemployment checks finally came through, and now I have a whole lot of questions. 

My basic question is, essentially - if I want to budget funds for something that I know I will not spend this month, should I put those funds in that category under May 2020, the current month? Or should I put them in my budget for the month I'll spend them in? 

As an example: 
For the sake of using easy numbers, let's say my rent is $500/month. I paid my May 2020 rent on May 1st. I  have $1000 that I want to use for June 2020 rent and July 2020 rent. Should I budget this $1000 under May 2020, and let it roll over through the next two months? Or should I go to my June 2020 budget and put $500 there, then go to July 2020 and put $500 there? 

I hope this makes sense. I think I may be overthinking, or overlooking something very obvious, but my brain just hasn't quite got it yet. Thanks for reading - I really appreciate any insight y'all can offer!

68replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • I don’t like to budget into the next month. So I would put it all in the rent category for May, and maybe rename the category to something like “June/July rent” so I would remember not to remove funds from it.

    Like 1
  • I would budget it in June and July

    Like
  • Some users find it clumsy/cumbersome to budget money directly into future months (as recommended in the official YNAB users guide). Reasons:

    • The UI only displays one month at a time, so you have to navigate back & forth
       
    • There's a nasty gotcha (IMO bug) where, if you over-budget, you'll only see the warning (negative, red To Be Budgeted) in the future-most month. (Search these forums for "Stealing from the Future" to learn more.)
       
    • You might need to make adjustments to your budget that cascade across many months.


    For those reasons (and others), I prefer to save my "future" money in a category rather than directly budgeting it.

    As I earn regular monthly income, I store it all in a "Income for Next Month" category. At the beginning of the new month, I empty out that category and use those funds to budget the next month. Rinse & repeat. This workflow had built-in software support in YNAB 4, but it's still popular and easy to reproduce in the new YNAB.

    For irregular income (e.g. your unemployment windfall, tax refunds, bonuses, or months with extra paychecks), I typically store it into a "Deferred Income" category. If I want that income to last (say) three months, then I'll subtract one-third from that category balance each month. Easy peasey.

    Like 6
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • 1
      • Reported - view

      bret Thank you for providing such a detailed explanation! I really appreciate it. I remember reading a bit about "stealing from the future," I hadn't thought about that in awhile. I like your idea of putting things in an "income for next month" category! That seems like a good way to remind myself not to touch it this month. 

      Like 1
    • bret up until now I've been budgeting in the future month but I like what you're saying about a future category. Is there any way to actually know how much to save for next month without manually adding up immediate obligations etc? What I like currently is that I can accurately go in and fund specific categories to know I definitely have enough

      Like
    • Stu Stirling

      To transition from paycheck/paycheck budgeting to monthly budgeting:

      1) Figure how much money you would need to fund only the minimum requirements in a month.  Select any categories that you absolutely need to fund in the month (include Rule 2 contributions, and I included a bit of fun money, too.  I did not include previous saving priorities without timelines).  The inspector can show you underfunded (maybe go to a clean next month to see a cleaner number), budgeted, and total goals (though that may be a Toolkit feature).

      2) Now that you have the number you need, put that number in the category name of your new INM category (or set a goal...)

      3) Each paycheck, put money into that category after your normal budget is taken care of.  The more you can put in, the faster you'll transition.

      4) When your INM category has enough money to fund your basic spending requirements, then at the beginning of the next month, move your INM money to TBB, and budget your month.  If you truly don't need to budget anything else (you can move money among categories of the same month when you need to WAM), you've done it!

      When You're a Month Ahead

      • All and any income you receive should go to your INM category.  It doesn't matter how much.  You'll budget it on the 1st of whatever month is next.
      • To help streamline this, I set the category of those income events to be "INM."  Then, right before I budget the new month, I go to "All Accounts," search for the INM category, and re-categorize them as "Inflow:TBB" then budget like normal.

      Good luck!  It's a great way to budget!

      Like 1
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 5 mths ago
      • 1
      • Reported - view

      Move Light Sound Life That's a great way to recreate the functionality of the old YNAB 3 (and 4, I just only used 3) by categorizing the income directly to that category, and then moving it into TBB once the month changeover happens.

      Like 1
      • MomonWheels
      • Magenta_Camera.8
      • 5 mths ago
      • Reported - view

      Move Light Sound Life Did I mess up my reports by categorizing Income to TBB, then to "Income for next month" planning to redistribute it on June 1st? Will it show as income twice?

      Like
    • MomonWheels No, as long as income goes through TBB, the reports will be fine. 

      It sounds like you categorized (transaction side) to TBB, moved money (budget side) to INM, and then you'll move money again to budget in June. That's all perfect.

      I decided to automate more than half of that work by getting rid of the move money steps and scheduling future income as INM. Right now, the reports show an annoyingly positive spending category in my INM for May, but when I recategorize all those transactions back to TBB around June 1st, the reports are completely accurate. I figure the May report isn't acurate until it's June anyways, so I ignore it.

      I like my way (which I learned on the forum) because I don't have random numbers popping up in TBB. Very awkward when you're trying to look at your grocery category in the store and there's a big paycheck sitting at the top of the screen...

      Like 2
      • MomonWheels
      • Magenta_Camera.8
      • 5 mths ago
      • 1
      • Reported - view

      Move Light Sound Life  Okay Great. I'm doing everything manually, so I never have unexpected money in TBB but I could see why you would want to streamline the process.

      Like 1
    • MomonWheels I do manual transaction entry, too. Look into using scheduled transactions - they can be very helpful (implicit goals, managing cash-flow while maximizing interest, and bill/budget reminders). 

      I got tired of typing the same thing for the internet bill, the mortgage, the paycheck, etc. 

      Like 1
      • MomonWheels
      • Magenta_Camera.8
      • 5 mths ago
      • Reported - view

      Move Light Sound Life So far I have been adding scheduled recurring transactions a they come up in real life. I'm a little confused as to whether I should do this for monthly bills that are never the same amount, like electric and utilities. 

      Like
    • MomonWheels I do have a base amount in there (some people use 0, but that's more work), and then when I get the bill, I'll update the scheduled transaction with the correct amount, putting the month in the memo. If I'm in June, and my scheduled electric transaction has May in the memo, I know I haven't updated it yet. 

      I do have a monthly funding goal on those to facilitate quick budgeting and rolling over excess. I try to budget enough normally in electric so that enough rolls over to be available for the hot summer months. I'll soon see if my average was a good estimate.

      Like 3
      • MomonWheels
      • Magenta_Camera.8
      • 5 mths ago
      • Reported - view

      Move Light Sound Life  Thank you! I'm trying to accept that they way I budget is a living, breathing thing. I have to learn ans adjust as I go. Logically, I know this. But the Type A Gemini in me wants everything perfect NOW. 😊

      Like
    • MomonWheels I'm a perfectionist, too. I read all the available help/how-to docs, and still overhauled different practices every so often. YNAB helped my situation to change, and my growing understanding of the software/method/workflows allowed me to do more advanced things. 

      Someone in my family is the same personality as me. I tried to get them set up with some of the bells and whistles I'd figured out, and it flat out didn't work.  I really think there are different stages of using YNAB, based on how much a user can trust the software and what their financial goals are. It's quite impressive it can work so well in many situations, tbh.

      There is no doubt that, objectively, I would have had an easier time with things, had I started knowing some of the "tricks" I use now. However, personal finance is a personal journey - I couldn't have used workflows based on fundamental concepts I was just learning. I need checks and balances. 

      I'm trying again tomorrow with that person. There are some things that just take living it to see how it works.

      Like
  • I would put it in the budget for this month, your first suggestion. I have the money now and want to designate it for future expenses in the category. This represents reality to me.

    Like 1
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Elastic Squirrel Thank you! This makes a lot of sense to me. I'm going to keep it in my current month's budget, for sure, either within my rent category, or I might experiment with bret's "income for next month" idea. 

      Like
  • Rule 2 would have you save up equal installments between now and then. It's typically easier that way, since funds are usually tightest when you first start.

    Like
  • EP said:
    I like your idea of putting things in an "income for next month" category! That seems like a good way to remind myself not to touch it this month. 

    Thanks, but it's not really "my" idea. The previous version of YNAB had a built-in category called "Income for Next Month" and users were encouraged to apply all their income to that category. The software would automatically empty it out at the start of the new month. Following that workflow was "Rule 4".

    That said, some users do prefer direct future budgeting instead of reserving money in a category (and deferring the budgeting until later). You might find it more satisfying to budget for specific future expenses -- e.g. June's "Rent" or "Food" -- instead of holding money in a vague "next month" category. You might feel less tempted to frivolously spend that money if you've identified an important job for it.

    Nothing is set in stone. It's easy to try either budgeting style for a while and decide which you prefer! 

    Like 4
  • I put it into the appropriate category but in the current month. So like right now, I have my mortgage "paid" through mid-July, but all that money is in my May Mortgage category. I've tried putting money into the next month(s), but I couldn't understand what I was doing or seeing. Putting it in the right category but in the current month makes sense to me.

    Like 2
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      Amy H There's a lot to be said for the simplicity of budgeting in the month of receipt. I'm very much a fan of NOT splitting the plan across months.

      It's also very natural to have a category in which to save in order to transition to budgeting solely on next month's area in month-sized chunks. When it's big enough, make the switch. In fact, this is how YNAB used to teach about getting ahead.

      They implemented budgeting to arbitrary future months in the latest product, but IMHO, it wasn't a problem that needed solving. "New" doesn't necessarily mean "better".

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Amy H Thank you for your response! I played around with things for a bit today, and I think I like your method best - current month it is :)

      Like
  • It sometimes can be helpful to realize that there’s no reason for there to be months in YNAB at all, except that the world tracks time in months and it can be helpful to see money at monthly intervals as a result. Each time you get new money, you just put it into categories according to what it needs to do. It sits there until it is needed. So I always tend to err on “budget it in the current month.” 

    Like 3
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      WordTenor Thank you for this! I messed around a bit with my budget today, experimenting with putting money in the current month, in the next month, and in an "Income for Next Month" category. I think I've settled on just going with your suggestion and putting the money into categories in the current month. 

      I think I've also figured out the source of some of my confusion - goals. (Also, please don't feel obligated to respond to this, it's only tangentially related! Just wanted to pose this question.) I have watched videos, read documentation, blogs, you name it - I cannot wrap my head around exactly how goals work. For example, I want to make sure I have $130 in my "Prescriptions" category every month. For May 2020, I put $130 into the category, as planned. My "Monthly Spending Goal" of $130 for this category is all set. Great. Then, I go to the pharmacy, and my prescriptions were only $118 this month. So I have an extra $12 available in that category. Awesome! But when I go to look at June, it still wants me to put $130 in that category to meet my goal... but if I do that, I now have $142 in that category. I want to be able to only budget $118 for my Prescriptions category in June and meet my goal - because I only want $130 to do this job, not $142. I do want that extra $12 I have leftover at the end of May to go towards my prescriptions for June, but then I only want to put an additional $118 there... I'm confused as to how the rollover "available" funds work between months, when it comes to goals. 

      Does that make any sense? Am I fundamentally misunderstanding something in how the goals are set up, or how I need to be thinking about goals? Is there a way to make it work the way it works in my brain? If there's something about the YNAB philosophy I'm not getting, I want to learn it and do it that way, rather than force it to work the way my brain does, of course. 

       

      Thank you for reading this wall of text - if it'd be more appropriate for me to make a new thread for this question, I'd be happy to do so! I just don't want to clog up the forum. 

      Like
  • EP said:
    But when I go to look at June, it still wants me to put $130 in that category to meet my goal

    This is a new goal that departs from the precedent of everything else in YNAB. The goal will only make sense when June 1 arrives in the real world. Until then, it's basically worthless as it ignores the actual spending and the remainder in the category.

    I suggest you submit a feature request telling YNAB how this prevents you from planning ahead using information available to you now.

    Like 1
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • 2
      • Reported - view

      dakinemaui Ooohh... so, just to be clear - if I don't touch that category at all, when I wake up on June 1st, YNAB will only want me to put $118 in that category to meet my goal? 

      Like 2
      • satcook
      • satcook
      • 5 mths ago
      • Reported - view

      EP yes!

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      EP Exactly. Makes you wonder why they did it like they did. Because if it updated on-the-fly like every other goal and you didn't touch it, it would STILL say you needed $118. So no different in the use-case considered. However, anyone wanting to plan before June 1 -- like probably EVERYBODY -- would already know they should plan on $118.  Again, I encourage you to let YNAB know if you think it could be improved.

      Like 1
    • dakinemaui There are different goal types. The Monthly Contribution type says add $130 to the category every month. The Monthly goal type says start the month with $130 in the category. Simply edit the goal and change its type.

      Like
      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 5 mths ago
      • 1
      • Reported - view

      Elastic Squirrel you're missing the nuance of the question. The monthly "spend up to" goal type doesn't do the math between the available balance and the goal for the next month until the month rolls over. So if I have $129 in the category today, May 20, if I flip forward to June it will still tell my me goal is underfunded by $130.

      Like 1
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Elastic Squirrel see Vibrant below. I tried switching back and forth between the two goal types to figure out how they think, and, for the most part, I do get it - but the key issue I'm having is that I can't meet that goal for June until June 1st, unless I want to overbudget, then take the excess back out on June 1st. Maybe I'm missing something about how I should be thinking about goals? 

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • 1
      • Reported - view

      dakinemaui Huh. That's just weird to me. It just seems like it could be a lot more helpful to be able to click over to June and see whether or not I've set aside enough to cover my prescriptions by quickly glancing at that goal marker. I mean, I'm a grown lady and can read the number and infer whether or not I should budget more, but that kinda defeats the quick convenience of the goals as "hey, don't forget to fund me!" flags. Thank you for your help with this! I think I will reach out to the YNAB team and mention this. 

      Like 1
    • EP I would budget $130 as a monthly goal type for this month and add the $118 when budgeting next month to meet the goal. If I have the money today, I can put the $118 in the budget for next month and meet the goal today.

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Elastic Squirrel Forgive me if this is a little redundant, but I'm on three hours of sleep and not nearly enough coffee - just to clarify, you're saying that if I have the money today, and I go to the June 2020 budget and add $118 to my prescriptions category, it should say that I've met the goal? Or am I misunderstanding?

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view
      Elastic Squirrel said:
      I would budget $130 as a monthly goal type for this month and add the $118 when budgeting next month to meet the goal

      What kind of monthly goal do you mean? There are 2, and neither is satisfactory as I see it. You won't meet a Monthly Contribution goal, and OP doesn't want to wait until last minute to plan next month.

      In the latter case, they have to do the math, which rather defeats the purpose of a Monthly Spending Goal.

      Even worse, if they hit the Underfunded button in next month's area now, they will budget MORE than necessary, obviously shorting something else.

      Like
    • EP Your statement is correct. You are not misunderstanding.

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Elastic Squirrel Huh, okay. I have tried this and it doesn't show that I've met my goal for June - it says I need to fund it by an additional $12 to meet it. If I wanted to have that goal show as "met," I'd then have $142 in the prescriptions category and have to wait until June 1st move that $12 elsewhere, right? 

      Like
    • EP Change the goal type as I mentioned above.

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Elastic Squirrel I've tried it both ways (Monthly and Monthly Contribution) - same result with both goal types.

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

      EP And that's because as was explained above by dakinemaui the monthly spending goal will only update correctly (or as would be expected) once you've actually reached the month that you are trying to budget in. Until then it will tell you you need to fund the full month value. It's stupid behavior but it is what it is.

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • 2
      • Reported - view

      nolesrule Okay, gotcha. Thank you for clarifying! I just wanted to make sure I wasn't missing something here. The idea of having to wait until it's literally June to have YNAB accurately tell me whether or not I've met my goals for June is... very bizarre to me.

      Like 2
    • EP You may have two goals. One for May and another for June. I haven’t seen this documented, but from experimentation I found YNAB uses the newest goal until it is replaced. This is to allow us to change goals. Right now, you want $130 per month.  You may need to raise it in the future, but wouldn’t want to lose the fact you had a previous goal of $130. YNAB makes a new goal in the month you change it, superseding the previous goal in effect. As you scroll through budget months, you see the goal that was in effect then.

      To fix your problem, go to June and delete the goal.  Then go to May and change the type from Monthly Contribution to Monthly.

      Like
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • Reported - view

      Elastic Squirrel Your explanation about how goals work month to month makes sense to me, and I think things are clicking a bit better now. Unfortunately, when I tried your fix, it's still showing the same behavior - says I need the full $130 for June. 
      I really appreciate all your help with this! 

      Like
    • EP Go to May and look at the goal amount and type. Don’t change anything, cancel out. Then do the same for June.

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • 1
      • Reported - view

      Elastic Squirrel You are missing the point of how monthly spending goals work when you haven't gotten to that month yet. It's working as designed. It's just a poor design.

      Like 1
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view
      Elastic Squirrel said:
      Don’t change anything, cancel out.

       ?? If you cancel out, nothing changes.

      Like
    • dakinemaui Correct. I believe the goal type in effect for June is Monthly Contribution, not Monthly.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      Elastic Squirrel It is impossible to have a Monthly Contribution in June and a Monthly Spending in May. There is only a single goal that applies from the month it is defined forward. The fact there is a goal in May guarantees the exact same goal is present in June. Creating (or editing) a goal in June will delete any goal from May's area.

      (This is actually the basis of a hack for turning off the underfunded warning when reallocating funds for Rule 3.)

      Like 1
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • 1
      • Reported - view

      dakinemaui yep, this is exactly what happens. Can't have two goals for the same category of two different types, regardless of the month. 

      Like 1
  • EP said:
    Maybe I'm missing something about how I should be thinking about goals? 

    No, I think YNAB missed something about how users want to budget.

    Like 3
      • EP
      • Substitute Teacher
      • Epphonehome
      • 5 mths ago
      • 1
      • Reported - view

      dakinemaui Hah! Thanks for the chuckle, and for all your help in this thread!

      Like 1
  • Move Light Sound Life said:
    Select any categories that you absolutely need to fund in the month (include Rule 2 contributions,

    One could possibly accelerate things by NOT including rule 2 contributions. You'd obviously need to make larger contributions in the following months, but your money will go further since you're no longer trying to grow the INM category. 

    It absolutely is simpler to include Rule 2 contributions, but for those motivated enough to do the analysis they could get the reward sooner. 🙂

    Like 2
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 5 mths ago
      • 5
      • Reported - view

      dakinemaui That was what I did. I had six or seven pay events per month, with only two occurring with both the same time interval and amounts. It was very important that I get a month ahead and fast. So I didn’t fund any Rule 2s until I was buffered. 54 days later, I was budgeting month-sized chunks at a time, and started funding my Rule 2s then. 

      Like 5
  • Move Light Sound Life said:
    To help streamline this, I set the category of those income events to be "INM."  Then, right before I budget the new month, I go to "All Accounts," search for the INM category, and re-categorize them as "Inflow:TBB" then budget like normal.

     Is there a difference between a.) going into "All Accounts" and changing the category and b.) simply moving the money from INM to TBB (one step)?  I'm actually curious, because that's all I do, is move the money from INM into TBB when I'm budgeting for the new month.  But I've seen people recommending the other way, and I'm wondering if I'm missing something, or if it's really the same thing, with just more steps.

    Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      Bruce You just need to "match" the release to the capture in order for reports to make sense.

      • If you directly categorized the inflow as TBB, you need to edit the transaction to recategorize.
      • If you categorize the inflow as TBB then budgeted to INM, then you should use a budget entry to release -- either delete the entry in the current month, budget a negative entry in next month's area, or use the Move Money Tool in either.

      I prefer the direct categorization because it's overall less effort and less prone to error (both by me as well as the timing of when I budget). Your choice also has an impact on the monthly headers.

      Like 1
      • Bruce
      • Software Engineer
      • Bruce
      • 5 mths ago
      • Reported - view

      dakinemaui hmmm..  Not sure which  choice I use.  What I do is put income directly into INM from my (and wife's) paychecks.  it sits there until next month, when I use the Move Money tool to put everything from INM into TBB.  Then I go through the process of budgeting it all down to $0.

      I haven't paid enough attention to the monthly headers to recognize what affects them.  I see sometimes there are numbers, and sometimes they're $0.00, but I haven't really tried to understand what they mean.  I figure if my TBB is $0.00 and my categories all have money in them, I'm good.  :)

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • 1
      • Reported - view

      Bruce The "issue" is in the reports. You have no income as far as YNAB is concerned when you never inflow the money to TBB.

      Like 1
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      Bruce With your current process, your the Income report will show $0 and Total & Average Expenses will be understated by your income (meaning near $0, but usually slightly negative). If this bothers you, you might consider a different process.

      I agree, TBB is the main header to look at.

      Like 1
      • Bruce
      • Software Engineer
      • Bruce
      • 5 mths ago
      • Reported - view

      nolesrule dakinemaui thanks, I think I get it.  I've been doing it wrong for about a year.  So you're saying I have to move it back and forth twice?  From paycheck into TBB -> INM, then at end of month INM -> TBB?  (using the Move Money Tool)

      ...I'll think about it...

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view

      Bruce The first direction is typically automatic if you use the categorization approach (scheduled transaction or Payee rules). I believe this is what you currently do, right?

      Being automatic is one of the reasons I prefer it -- it stays out of the way until I'm ready to deal with it at the end of the month (or even a few days into the new month).

      However, that choice mandates recategorization on the release in order to make reports sensible.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 2
      • Reported - view
      dakinemaui said:
      If you directly categorized the inflow as TBB, you need to edit the transaction to recategorize.

      I'm so sorry, I botched first bullet above about matching the input to the release. It should read as follows:

      If you directly categorize the inflow as *INM*, you need to edit the transaction to re-categorize as TBB at the end of the month.

      Like 2
  • Stu Stirling said:
    Is there any way to actually know how much to save for next month without manually adding up immediate obligations etc?

     Budgeting is easier when you work with consistent amounts each month. It's hard to make steady progress on goals if you're always riding a roller coaster of windfalls and shortfalls.

    So to answer your question, I'd recommend saving all of your May income into a category. On June 1, empty that category out and distribute it as needed -- toward June's immediate obligations, toward your various "True Expense" categories, etc.

    There are many advantages of this workflow. First, it's nice to budget June all-at-once, rather than budgeting each scrap of income as at arrives (e.g. multiple paychecks, interest dividends, credit card rewards, etc.)  It's easier to see the big picture and less tedious to budget in whole-month increments.

    Another powerful advantage of "locking" income into a single month is that it creates a sense of scarcity that instills greater discipline. If you overspend a category in May, you don't allow yourself to cover it with money that you've reserved for June. Instead, you can only solve May's overspending problems with the money that you had at the beginning of the month. I.e. you'll have to contribute (and/or spend) less money in some other category during May, instead of pushing the problem off into the future. That immediacy of cause/effect can help you make better decisions (which, in the end, is the whole point of operating a budget.)

    Like 2
  • bret said:
    I'd recommend saving all of your May income into a category

    The reality is, though, it takes some time to get to that point. Basically, budget what you need for expenses between when you receive your paycheck and the end of the month (in the current month's area). Everything else goes in the INM category.

    If you get multiple checks, start with between the last and the end of the month. When you can push all of the last check, work on expenses occurred between your second to last check and the end if the month, etc.

    Alternatively, it doesn't take too long to budget for early expenses in next month (between 1st and your first check). Do that, look at the budgeted total, and then delete those budget entries. You obviously need to end the prior month with at least that much. Grow from there.

    Really, it's harder to describe than it is to just do it.

    Like
  • dakinemaui said:
    The first direction is typically automatic if you use the categorization approach (scheduled transaction or Payee rules). I believe this is what you currently do, right?

     Yes that's what I'm doing.  I just modified all my scheduled transactions to go into TBB instead of INM.  That's the first step.  Then step 2 happens when I start budgeting next month.  I think I've got that.

    I decided to go through and set historical income to TBB to see what reports look like.  I think it messed up a couple of things... maybe?   I believe I've missed a few transactions, such as bonus, and tax refunds, but most everything income is now going through TBB.

    Something weird happened with a deposit that I got in April and had put directly into various categories via split transaction.  I just now changed it, and put it all into TBB, but then the TBB for April didn't change, but the TBB for May had increased by that amount in it.  So I decided I wasn't going to fight with it, and just budgeted those amounts in May...  I know, that's probably going to royally screw something up, but I guess I'll survive.

    Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • 1
      • Reported - view

      Bruce When you switch something from inflowing directly into a category to then go to TBB, it can create a category with a negative balance if you have already pulled the money out of that category. This negative category balance carries into the next month's TBB number as overspending, so it offsets the money that now goes into TBB instead of the category.

      Like 1
  • What I would do is budget in June and July. I currently have my monthly budget for Jun and July funded and am working towards completing August. This way the funds are there for the following months. This works well for me as the business I was working at was closed due to Covid and I have to use what I get to get a bit ahead.

    Like
    • Eric Lofgren You can do that, but you will need to be on guard against the bug called Stealing From The Future. I see you started a new post, so I'll write more over there.

      Like
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 1
      • Reported - view

      Eric Lofgren I wouldn't want to scatter my plan across multiple screens if funds were tight. It seems a little too easy to lose track, at least to me.

      Like 1
Like Follow
  • 5 mths agoLast active
  • 68Replies
  • 590Views
  • 18 Following