Pineapple Gal One thing I will mention is that 30AOM does not mean one month ahead. To be clear, to be one month ahead, you want a category that you place all your paychecks into. When next month happens, you release those funds into TBB and use that to fund next month. It means you live off of last months paychecks. 30AOM doesn't actually mean you are in that position. Hope that helps

Pineapple Gal so, the thing with budgeting into the future with each paycheck is twofold:

First, on a practical level, there is a known quirk (some might say flaw) in the software where once you start budgeting past the current month, *only* the furthest-most budgeted month's TBB box is accurate, and it is possible to budget more money than you actually have and not realize it because the current month's TBB doesn't turn red, only the furthest month does. Keeping all your money in the current month by using a holding category eliminates this problem.

Second, on a psychological level, there is a shift that happens when you stop looking at your money at the paycheck level and start budgeting a month at a time. "Breaking the paycheck to paycheck cycle" isn't just about living paycheck to paycheck, it's about budgeting paycheck to paycheck too. You see your priorities in a new way when you can look at all of them at once instead of picking and choosing what gets funded from this paycheck and what has to wait. 

Pineapple Gal It was a huge game changer for us! We were half a month ahead. So the last paycheck of Feb paid for first half of Mar. So we kept that up but instead took the extra savings and added towards the "One Month Ahead" category. When that category reached one paycheck's worth we were good. So we then took the last paycheck of the month and the "One month ahead" category and we became 1 month ahead from that point forward.

From that point on we lived on last months income. Any income that comes in that month (eg Mar) goes from TBB _right_ into One Month Ahead. At the end of the month (eg Mar), we release those funds back into TBB (eg in Mar), move to the next month (eg Apr) and budget away. Left over funds go towards any savings/wish farm goals. But the best part is the whole month is done and funded as of DAY 1.

Best way to use the software (in my mind) is keeping TBB at 0. Get that money out of there and into a job. It is closest to 0-based budgeting. Give every dollar a job. If you don't, any category that goes neg will/might pull from TBB and you lose sight that you are not within your budgeted amounts.

Pineapple Gal When one month ahead, my perspective, is that Mar is budgeted and done with Mar 1st. After that point ANY income goes into One Month Ahead and will be dealt with Apr 1st. So in your scenario, come Apr 1st, you pay all requirements and be left which this huge lump sum to determine what to do with.

I see several benefits with this:

• Forces you time to think how to spend
• Keeps the logic simple (Budget is done/funded on 1st; now just roll with punches)
• Funds cover any expenses that would actually come from other accounts
  • An example of this for us would be clothing which actually lives in Savings. We reconcile at end/beginning of month to ensure accounts have sufficient funds. So if we spend clothing funds, the One Month Ahead dollars living inside Checking would "technically" be covering those costs. If we instead moved those funds to some Debt and also PAID that this month it might lower our Checking to a point we were not comfortable. (Not sure if I explained that well enough)

Pineapple Gal I budget right into next month and the month after. I use the desktop toolkit so it warns me if the furthest month goes negative. I worry that if I use a holding category I will steal from it because its not really budgeted out. 

Gray Network This is exactly what I did too. Last year we reorganized our budget to reflect a more "activity based costing" type approach. It resonated more with my husband, I like it overall and it helped us get a better idea on what life activities we are spending our money on. Are we eating all of our money or are we going for trips or playing golf or what have you? I think that categories evolve over time as you become more comfortable with what you are trying to achieve.

Gray Network  I don't have a specific "fun money" category either, I divide it up based on what I'm doing - broadly speaking, into either "social spends", "online shopping" or "hobbies" 

Mx Emmin said: It's not about how many categories other people have, its about how many categories work best for you.

^ this is spot on.

I have discovered that I need a simplified budget structure. I tend to group a lot of like items together rather than create a separate category for each and every item. I find a plethora of categories simply overwhelming and distracting. It's not unlike being in the shampoo aisle of a huge store. My eyes start to spin from all the options and colours.

I have a total of 32 categories grouped under these master groups:

Admin holds my categories like Income for Next Month, Reimbursement categories for family, office, and social groups, and a small slush fund to keep my reimbursement categories at zero until I'm repaid.

Pineapple Gal 

Pineapple Gal said:
I guess what I'm really asking is: Once you get a month ahead, what's next? 
P.S. I'm building up an income replacement fund at the moment, so building multiple months' worth of income in the NMI category doesn't seem necessary.

 That's it, if you completely budgeted your month and still have money left in NMI, you have to decide what to do with that money.  There's no need to keep in in NMI, because this is the month it was saved for.  Budget it here.  If you want to put a big chunk onto debt do that.  If you want to add a bunch into your Income Replacement fund, do that.

Just budget it all out for the month, and start again by saving all the income you get this month (April, in this case) and do the same the next month.  You budget everything you need, and if you have excess, put it to the next "goal" whether that be debt, or income replacement, or some other True Expense.  Or split it evenly among them.

Once your Income Replacement gets big enough (maybe 6 months) and all your other true expenses are sufficiently filled, and you have no more debt, then you can start thinking about investing that extra.

Pineapple Gal exactly what Bruce said. On April 1, you move every dollar from NMI back to TBB, and you give ~every~ dollar a new job. 

This is why I get on a soapbox on the difference between "being a month ahead" (vague, open to interpretation) and YNAB4's rule 4 (actually rule 1 way way back in the day, I believe) of "living on last month's income."