I keep making goals, but never have money to fund them

I know that a big YNAB rule is to Embrace Your True Expenses. So I've added several future funding goals into YNAB--Christmas, Vacation, down payment on a house, new tires, car maintenance, etc. I've figured what month I'll probably need/want these funds by and created a target balance savings goal. However, with every influx of cash, I never have funds to put in those envelopes and the monthly contribution just increases steadily making it even harder to fund them...

Am I missing something here?

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    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 4 mths ago
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    It sounds like you either need to ratchet down your goal target, or you need to budget less elsewhere so that you can afford to budget for your goals. If you can't afford to fund them relatively evenly, then you can't afford the goal you've set. Or if you want to be able to afford those goals, you need to budget for them first and budget for things you care about less afterward. 

    I care a lot about going on vacation and giving nice Christmas gifts.  I also care a lot about having money set aside in case my car breaks down or my water heater blows. Those get budgeted for as though they are bills. If I'm going to come up short somewhere it will be in something like "home shiny" where I budget for new decor. 

    Like 4
    • WordTenor said:
      It sounds like you either need to ratchet down your goal target

       It's not so much that each individual goal is inconceivable, but rather the combination of all of them that it. I anticipate that it is a matter of our income at the moment that is holding us back. It's good to know what the reality is. My husband is just starting his career and I've taken a pay cut so I can work from home and eliminate child care. I added goals like a down payment on a house and set it out to 2025, which I feel is halfway between an ideal and realistic time frame. We just replaced tires on our car and the other two should be good for a few more years so I added a goal for that as well due in 2023. That goal is SUPER reasonable at $6 a month. Then there's Christmas which given our track record I should take more seriously. It all just starts to really add up.

      Like 1
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 4 mths ago
      • 1
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      PeculiarBella It's a balancing act, but at least you're not paying attention ahead of time rather than putting them on a card when the expense comes and hoping to pay it off.

      Like 1
    • Vibrant
    • No more counting dollars, we'll be counting stars
    • vibrant
    • 4 mths ago
    • 9
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    You're not missing something, but you are becoming aware of something a lot of folks are living with but may not be staring them in the face the way it is for you now: your income may be enough to cover your monthly obligations, but doesn't leave a lot of wiggle room for building savings (True Expenses). One of the things YNAB does is makes you take a hard look at your income relative to your priorities, and consider things like: what is the opportunity cost of the debt I'm carrying? What discretionary categories can I trim back, a little (or a lot) at a time, to free up money for these longer-term goals? Do I want/need to increase my income? Etc.

    Like 9
  • No magic solution, unfortunately. You have to prioritize and put money toward things that matter more.

    The only saving grace is that non-monthly expenses (i.e., True Expenses with known dates) typically require larger than "nominal" contributions at startup. For example, an annual expense nominally requires 1/12 of the amount; however, starting YNAB 3 months before you have to pay that bill requires contributions 300% larger than nominal (assuming you don't use any startup funds to help). That's just the way it is. After you've paid that bill, contributions can drop down to the nominal level, in turn letting lower priority categories that initially waited get some money.

    It's not without a downside, since contributions toward the lower priority category increase the longer it goes unfunded, as you've seen. Again, prioritization so things that don't make the cut aren't as important.

    Like 6
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 4 mths ago
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      dakinemaui I'm feeling that right now because I'm about to pay an annual membership for my yoga studio because it went on sale, even though my current membership doesn't expire until July.  I had actually drained my savings for it at the end of last year because I thought I might cancel it for awhile and go even more gazelle intense.  But it's not worth giving up my wonderful yoga studio membership.  I'd rather take an extra few months to get out of debt but be doing yoga the whole time.

      Like 1
      • dakinemaui
      • dakinemaui
      • 4 mths ago
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      PhysicsGal Yep, the beauty of Rule 3 and understanding your own priorities. Taking advantage of the sale is important to you, and you therefore shift funds from something of lower priority. If that lower-priority something is "maintain CC debt", then so be it. The important thing is that you're aligning your budget (and actions) with your priorities.

      The next question is, will you start saving now so you can take advantage of a February sale next year?

      This is the "hidden" impact of accelerating such membership payments. With this in mind, the sale needs to be "really good" for me to take advantage of it. 😉

      Like 1
  • A worthwhile exercise is to add up your expenses normalized to their nominal timeframes to get your "long-term" monthly budget requirement. That means 1/12 of any annual expenses, 1/6 of semi-annual expenses, etc. on top of monthly expenses. Things like Electric that fluctuate should use the average (1/12 the yearly total). Your CC year-end summary may be helpful to quantify these things. (You can temporarily put these numbers in an empty month in YNAB to add them up, use a spreadsheet, or paper and pencil.)

    If that monthly total is within your monthly income limits, then you have a time-shift issue; you just need to "get over the hump". Credit can help you do that (though usually at a cost), as can temporarily cutting the less important things. There is light at the end of this tunnel, at least.

    However, if that exceeds your income, then you will never make it with that particular expense/income combination. The sooner you know there is no light at the end of that tunnel, the better -- you need to switch to a different tunnel by increasing income, cutting expenses, or both. 

    Like 5
    • dakinemaui This sounds very interesting. However, we haven't been using YNAB for a whole year yet... I think I understand what you're suggesting... but  

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      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • 2
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      PeculiarBella 🙂 You've got your various categories representing your known/estimated expenses and timelines.(*) Let's say $2000 Rent (monthly), $100 average Electric (monthly), $200 gas (monthly), $600 semi-annual (every 6 months) car insurance (which is $600/6 or $100 monthly equivalent), and $125 Amazon Prime annual fee ($125/12 monthly equivalent). The "steady-state" money required for these things every month is $2000 + $100 + $200 + $600 / 6 + $125 / 12 = $2410.

      If income is more than that, then you can eventually make this work. The timing may take a while to get straight, though. Again, if you can't spread that $600 car insurance over 6 months of saving, it's going to require more than $100 per month in the short term.

      On the other hand, if your income is less than that, you've got a big problem and must take action as soon as possible (usually to cut expenses).

      (*) You've said you haven't been using YNAB for a whole year, but there are other ways to see what you've spent. Go back through past credit card statements (the year-end summary is great for this) for a basis. That wasn't using YNAB for guidance, so likely you can come down on some things. Look at past Utility bills to add up a year's worth of bills and divide by 12. If you don't have those, then make your best guess -- electric is $50 now, it's probably 3x that high in the summer if you have air conditioning. Ask your neighbors what their yearly total might be. Anything you can do to make your assessment more realistic the better.

      Like 2
      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • 4
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      All that being said, I'd say that most people cannot make it "as-is" -- almost everyone needs to cut expenses. After all, if things were fine, you probably wouldn't be looking at YNAB for help.

      Like 4
  • I just come from your Journal and it seems you are on the credit card float. Which is pretty much like having debt. So you may have to solve this first before moving to actual savings.

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      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 4 mths ago
      • Reported - view

      Ceeses Yep, that sounds familiar!  I'm so glad I'm off the float. 

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  • I had the same when I started; kept thinking of new things , made a goal and saw my monthly amount to be funded rise...

    for me shifting to the steady state, by taking savings and putting them for example towards 10/12 of a yearly bill due in 2 months, like dakinemaui suggests, made a big difference. On the way I suppose I also realised I wanted to prepare for lots of future things but can’t do all that at once.

    Since then the stress around it left. Starting the budget made me save for my true expenses. And that got me in the mindset where I could always think of more true expenses. For example we want to fund some of the college costs for our now 11 year old. A few months back I made a goal for it and lots of other things. Now I look at it as something we will do, but can’t put money towards just now. So priorities, yes. But it doesn’t mean it will never happen. It will just have to wait a little.

    Like 4
  • Honestly, I think it may be a simple matter of cutting down expenses and seeing where you can shave off some dollars here and there. When I started doing YNAB, I had to look critically at our budget to see where we could save some dollars for our true expenses. I had to start grocery shopping at a different grocery store, made myself more aware of gas prices, planning meals so we could eat out less, and being very deliberate with all the money coming in. Our next step of action is to start selling some things that we haven't used in a while, because we are working to pay off some debt while still covering all our immediate obligations and true expenses. 

    Also I think it's important to make the distinction between true expenses (like going to the dentist, and car maintenance, Christmas) and  lifestyle goals (like vacations). I think the true expenses are necessary things that you know are going to happen no matter what. And lifestyle goals are the nice to haves, but shouldn't get in the way of your immediate obligations or true expenses.

    Does that make sense?

    Like 5
  • Powder Blue Pony said:
    shifting to the steady state, by taking savings and putting them for example towards 10/12 of a yearly bill due in 2 months,

    Well said. Using savings to fast-track yourself to the steady state condition is a great thing to do when possible. Getting to that steady state condition eliminates the passage of time as a reason to change your nominal budget values (leaving just amount refinements as you better understand your priorities). Even doing it for some categories is helpful; I'd suggest putting it toward the items that will reduce the most first, as that lets you fund more categories that would have originally waited.

    Like 1
    • dakinemaui Haha! You taught me that! :-)

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      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • 5
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      Powder Blue Pony And the student becomes the teacher.  Sweeeeeeeet!! 👋 Made my day! 😄

      Like 5
  • Thanks to everyone for helping me work out my thoughts! We are 100% on the credit card float. I'm hoping to take a big step off of it with our tax return and then continue to chip away at the debt we have left. I've created more specific categories for true expenses for groceries, furniture and random appliance purchases, household needs, etc. in order to keep a stricter eye on our budget. I mentioned in my journal that we've still been tracking our spending and not budgeting for spending. That is going to change in March! We have some upcoming expenses that can't be avoided so we've decided to sell some things to cover it. We are going to prioritize Christmas and Car Maintenance. We have a nasty habit of overspending a lot at Christmas and spoiling each other and our kids. I'm determined to avoid that this year. I think I am finally getting a grasp on what our priorities are right now and it's helping a lot to see that light at the end of the tunnel. 

    Like 6
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 4 mths ago
      • Reported - view

      PeculiarBella Once you get off the credit card float and start using your CCs the YNAB way, and saving up for true expenses, you will feel so much better.  Just keep at it!  You can do it.  But consider negotiating or removing any unnecessary bills for now.  I cancelled my Dropbox and Amazon Prime for the meantime, while I'm getting out of debt.  I can always go back later, when I don't have to budget so much money to my debt and savings for an Efund.

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  • Violet Sloth said:
    Also I think it's important to make the distinction between true expenses (like going to the dentist, and car maintenance, Christmas) and  lifestyle goals (like vacations).

     Perception about what is a true expense and what a lifestyle goal is flexible to an extent though, isn’t it? Things you have always done feel like things you are going to spend anyway, so you better budget for it. To take it further: I need a car. But only if I can afford it.

    At a certain point I started to doubt everything. But just following priorities helped a lot. I agree that I can now, for my current level of income, name true expenses and lifestyle goals.

    Like 7
  • My wife was initially very resistant to the YNAB method and complained, "This is dumb! I don't want to write down all of our goals/expenses! That'll just show that we don't have enough money to afford everything!"

    As it turned out, our money could stretch a lot further than either of us originally expected, as long as we set realistic timelines for some of the flexible/longer-term spending goals. E.g. buying a new car with cash sounds super intimidating, but when you give yourself 10+ years to save up for it, it can be very achievable!

    But my wife was still correct: We had some goals that simply didn't make the cut. And you know what? We actually felt great about it!  Instead of making ourselves miserable wondering why we can't afford all-the-things, we seized control of our finances. Suddenly everything made sense: We choose not to pursue some goals, because we have other goals that are higher priorities.

    Who knows, someday our incomes might improve or our priorities may change and we may revive some of those goals that didn't make the cut. But they no longer torment us. We're in control.

    Good luck on your YNAB journey!

    Like 13
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