Income at the end of the month

Husband and I were YNAB'ers for about two years to save aggressively towards downpayment on our house and budget for a 6 month non-paid course he wanted to do. We made it and I dropped off using YNAB and sort of winged it in a little Excel template and quit altogether when our first daughter arrived in January. 

Our income is ok and more than enough to cover mortgage, fixed expenses, some fun extras each month and some  saving, but we are lacking overview and purposes for saving, so why not order that take out or buy these shoes? I felt floating around a bit, including a nagging feeling each time a big bill arrives or the feeling we're not saving nearly enough. So last week, we've set some clear financial goals for short term and longer term (some bigger fun purchases, car to be paid out of pocket in about a year- year and a half and savings for our daughter). 

Came back to YNA, took stock of the current situation and went on to give every dollar a job. Feels much better already, and situation is quite good. I have an overview and categories of fixed monthly costs (put these with a monthly goal), the less regular bills with 'goal by date' and flex things like groceries, gift giving, clothes, the works. All covered and the rest of TBB towards our goals, happy to fund a bit of those as well. TBB at zero, entering transactions as we go. 

 

Now I started to think towards the future: fast forward to the 25th, when we both get our monthly paycheck. I have no idea how to handle that + month transition: I read you should not leave money in TBB, but if I put our May 25th paychecks May's budget, June's fixed categories will be underfunded untill June income hits our accounts. I'd rather not put it all in savings categories and do the June budget a couple of days later, feels like 'losing' my savings, so I lean towards starting to budget towards June fixed expenses already end of May/when paycheck arrives. Or is this not the way to go? I feel like this is a very stupid question, but can't wrap my head around the best way to tackle this! 

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  • Create an Income for Next Month category and put it there. Then in June, take it back out and budget the money.

    Like
  • That's probably what I need! Would you recommend putting a goal (eg my fixed & irregular bills) on that category too, or not? 

    Like
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      Elien C No. The category is based on the income, not on the outgo, and there are no goals for “did this category get all my income budgeted to it?” 

      Come to think of it, that would be a great goal type...

      Like 1
    • WordTenor ooo, perhaps a special income category that would automatically enter budget entries on your behalf, satisfying the goal of "budget all income" and even release it for you in the following month. Yeah, that would be slick.

      Like 2
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 1 yr ago
      • Reported - view

      dakinemaui that's genius.

      Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 yr ago
      • 7
      • Reported - view

       Where do you guys come up with this stuff?! Wow, that would be powerful!

      So... You're saying that all your income this month would fund next month and you'd have a kind of "buffer" between when you get your income and when you spend it? Crazy! Why has nobody ever thought of this before?! Imagine if it was built into the software...

      Like 7
      • Peter
      • Professional Designer, Web Developer
      • lasty
      • 1 yr ago
      • Reported - view

      dakinemaui what if we go one further? Make the end of the month income a scheduled recurring transaction and don't just assign it to TBB but make it a split transaction that already includes all the usual suspect categories with never-changing outflow amounts. Bam. Semi-Automatic budgeting

      Like
    • Peter No, because that skews both income and expenses in reports. The use of Goals is one way to achieve semi-automatic budgeting.

      Like 2
      • Peter
      • Professional Designer, Web Developer
      • lasty
      • 1 yr ago
      • Reported - view

      dakinemaui I see. I don't really use those reports much

      Like
    • Peter I don't really use reports either, but I do use the average for many of my categories.

      Like
      • Elien C
      • elien_c
      • 1 yr ago
      • Reported - view

      dakinemaui agree, I'd prefer my reports to reflect reality as much as possible, especially in the expenses, so I can base my budget on historical averages for a couple of categories. Automatically budgeting fixed monthly expenses with a certain category (INM) or inflow would be very powerful, but as a beginner/restarter, I think it's good to keep a close eye on everything and take osme time to get it right and know where I'm at every month. 

      Like
      • Cirrus
      • Living mobile and solo
      • miriamnz
      • 5 mths ago
      • Reported - view

      Peter 

      where do you get you conscious awareness around $ if its all automated? The monthly doddle through my categories is necessary to me for mindfulness. I dont import either, preferring the hands on. But then, my budget is very very tight, so mindfulness matters more for survival than for quality if life, which does, i think, makes a difference. 

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      • Peter
      • Professional Designer, Web Developer
      • lasty
      • 5 mths ago
      • Reported - view

      Cirrus What I suggested here would still need your approval every month (like any scheduled transaction) and I would only apply it to the categories that are always the same outflow every month like rent, regular bills or true expenses.

      You would still have to look at it and approve it or change it if needed, but if how you set it up is already good for most of the months it will save you manually assigning the dollars later.

      For clarification: I'm not using this method, the comment was more meant as an idea abut how to implement something like what dakinemaui suggested with our current means.

      I'm going the regular route of categorizing the inflow as To Be Budgeted, then manually assigning it to the budget categories. My income also hits at the end of the month, but I just budget it when it arrives to give the upcoming monthly budgeting session a head start

      Like
  • I agree. We had enough money on hand thanks to taxes and such to budget most of May before the first. Initially, I was moving ahead to June as new income arrived and budgeting it there. At first this seemed great! I loved watching future categories fill up. (We are paid weekly, multiple incomes, so I was doing this a lot.) Before long though, moving between months got confusing and I somehow made a mistake. 

    I had read about using an income for next month category as a holding area during the current month. I switched things around and I'm sold. No confusion, and I'm looking forward to budgeting a moth at a time.

    Like 4
      • MomonWheels
      • Magenta_Camera.8
      • 1 yr ago
      • Reported - view

      Magenta Camera  *month

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 yr ago
      • Reported - view

      Magenta Camera It really is the way to go. I had the good fortune of starting a job which pays a month at a time at the end of the month exactly when I started using the web app, but after almost 2 years of chunking individual income events into one big pile (which happened automatically in YNAB 4) I can't imagine ever going back to doing it piecemeal again. 

      Like
  • Thanks all, I've done some more digging around the forums and I now have a set up with a INM category filling up in May and negative budgeted with the expected income in June, working on a template for fixed  expenses one month ahead. I should be able to release the INM category in TBB when month switches, and TBB will then tell me how much I've got to allocate for my flex categories. 

    Like 1
  • I have the same issue, my money comes in on the 11th of the month, to cover a payment month of 5th to 4th, so should I proportion it out so the right number of days worth is held over for the next month?  In which case, should I push forward how many days worth: 4 or 10?  Or do I think of it as I'm being paid in arrears, so the money is actually for part of the previous month?   🤯

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  • Good Intentions said:
    to cover a payment month of 5th to 4th

    If you mean your CC statement period is 5th to 4th, you shouldn't be thinking about it that way. Money is reserved for CC purchases immediately (assuming Available funds), so the CC statement period is immaterial to anything.

    When your money comes in on the 11th, budget toward categories with outflows between the 11th and the end of the month in the current area. Include True Expenses in this as they have "effective" outflows each month. If you have money left over, switch over to next month's area and budget for expenses incurred between the 1st and the 10th.

    If there's anything left after that, budget toward things occurring after the 10th of next month in order to get a head start on what your next month's check has to cover. Eventually, you won't even need any of your check in that month you get it, and you'll budget ALL of it in the following month's area. At that point, everything is laid out on a single screen and can be filled in with a few clicks if suitably setup using goals and scheduled transactions.

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    • dakinemaui I mean a payment month ie that the check is paid in arrears on 11th to cover the preceding period 5th to 4th, ie it's paid 7 days after the end of the respective payment period.  Nothing to do with my CC.

      Two isses - most of my automated payments go out before 11th, because they were set up to fit with a typical salary payment date, not welfare check 😞  Also YNAB prompts you to budget by the start of a month for all recurring payments in that month, no matter what date they fall on.

      At the moment I am not sailing so close to the wind that I'm going to miss my rent payment, I am just trying to get my head around it.  Currently I have put 4/30th of the check money into the following month in its own category.

      What do you think of that as a solution?

      If things get really bad I have two options: ask for the welfare to be paid twice a month, or make an alteration to my rent payment date, involving paying a part month upfront.

      Like
  • Good Intentions said:
    Or do I think of it as I'm being paid in arrears

    Definitely not. The budget is the plan for your FUTURE spending. That might be next week or next year, but always in the future.

    Like
  • Good Intentions said:
    I mean a payment month ie that the check is paid in arrears on 11th to cover the preceding period 5th to 4th

    Ah, got it. When you worked doesn't matter. What matters is when you're paid, because you can't spend money you don't have. My advice above still applies. You have to make a plan for all that money when you get it. You have to live until the end of the month, so budget for that in the current month's area. You have to live from the first to the 11th, so budget for that in next month's area.

    Given the importance of Rent, you might even budget for rent in next month's area right off the top. Then switch back to the current month and see where that leaves you. You should always allocate money to the highest priority category first. That way when you get To Be Budgeted to $0 and stop, it's the least important things that are not funded.

    Good Intentions said:
    Currently I have put 4/30th of the check money into the following month in its own category.

    Not a great solution if your rent and other early month expenses total more than 13% (4/30) of your income. You need to put AT LEAST enough to pay those expenses into the category, and work to grow it over time. Again, given the importance of Rent, etc. you might budget to this category right off the top if you use this approach.

    This category is an aid to sequester funds without the frequent flipping of screens as well as combat a design flaw that can pull back funds directly allocated to next month, leaving you short without obvious warning. Preferences vary; but regardless of how you do it (shuffle via category or just budget directly), eventually those early next month expenses need to be budgeted using money received on the 11th of this month.

    Good Intentions said:
    YNAB prompts you to budget by the start of a month for all recurring payments in that month, no matter what date they fall on.

    YNAB doesn't do that at the basic level. YNAB urges you to budget income when you get it. As something to work toward, they do urge you to get ahead, by budgeting for expenses in next month's area that occur after your next month's check. This gives you a head start as I originally mentioned. Eventually you'll get far enough ahead where you can budget for all of next month using this month's income. You are just not there yet.

    Like
    • nolesrule I do think it's easier conceptually to explain it that way to start with. (You'll note the safer category approach is mentioned immediately following.) Yes, there's the risk of being shorted, but there's also a chicken-egg issue with the amount. I know people would balk if advised to, "Add up all the entries you would have budgeted in next month's area before the 11th (on a calculator), then budget that to the Income Next Month category." Or perhaps, "Budget for the early-month expenses in next month's area, look at the Budgeted header, write that number down, delete all those budget entries, flip back to the current month, and budget that total into the INM category."

      Yes, it's risky to budget directly to the future. However, that's the design. Maybe if more people are burned, YNAB will fix the issue.

      Like
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 1 yr ago
      • 4
      • Reported - view

      dakinemaui 

      dakinemaui said:
      Maybe if more people are burned, YNAB will fix the issue.

       I needed that good belly laugh this morning, thanks. 

      Like 4
  • nolesrule said:
    You know To Be Budgeted can reach zero without actually being zero.

    dakinemaui  said

    a design flaw that can pull back funds directly allocated to next month, leaving you short without obvious warning

    I don't like the sound of those. Can you explain?

    I have added up all my early month expenses by hand, except for a couple that are on my CC so count as late month. They are all important and add up to 658 which is less than 100 short of the whole check.  I know I have to sub myself out of savings at the moment, I am just trying to keep that as low as I can, and be mindful of the payment period of the welfare check.  If things start to go critical I'll have to rethink.

    Like
    • Good Intentions Search for Stealing From the Future. The TBB value in the future-most month with budget entries is the only one that's guaranteed to be accurate. By not budgeting directly to next month's area, you prevent YNAB from being able to mislead you. Putting $658 in the holding category (Income Next Month or similar name), keeps you from planning to use it elsewhere this month. At the end of the month, you can release the funds from the holding category and fill out those early month categories. In fact you can release it any time with a negative budget entry in next month's area. Additionally, having a category gives you an obvious/easy path to get ahead.

      To be fair, there are ways to guard against being mislead if you do budget directly in next month's area. Most notably, it's only when TBB is $0 that you might have an issue. An easy workaround is to leave $1 in TBB. However, just knowing about the possibility means you can guard against it (or check next month's TBB frequently after messing about in the current month's budget). Use of the Move Money Tool also reduces the risk.

      This is very much a preference thing. I will say once you're able to push all income to next month, it's without a doubt less work to use the category.

      Like 1
  • dakinemaui said:
    Search for Stealing From the Future.

     Could you give me a link please - there are lots of references to that phrase coming up on a search.

    Like
  • I do use the report so the solution I need cannot mess with the number or it will be confusing. 

    I did mine by creating 2 Employer (of same name). One for deposit (to record the day I got paid) 

    Another is to "transfer" the past month as inflow for budgeting. 

     

    So it will look like this (assuming payday is 20th)

    20/03/2021 Salary (Deposit). Category: Income for Next Month. Outflow [blank] Inflow [blank]

    01/04/2021 Salary (past month).Category: Inflow: To be budgeted. Outflow [blank] Inflow [3000]

    20/04/2021 Salary (Deposit).Category: Income for Next Month. Outflow [blank] Inflow [blank]

    01/05/2021 Salary(past month).Category: Inflow: To be budgeted.Outflow [blank] Inflow [3000]

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

      Emily Eden You can simplify this by re-categorising the income transactions. At the start of the month, go to the All Accounts screen, search for Income for Next Month, select all and in the Edit menu re-categorise to To Be Budgeted. This way you don't have transactions that have not happened in reality.

      Like
      • Emily Eden
      • emily_eden
      • 5 mths ago
      • Reported - view

      Ceeses will this mess with the report?

      Like
    • Emily Eden It shouldn't! All of your income will end up categorized as Inflow: To be Budgeted, and that will make it show up as income in the Income v Expense report.

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

      Emily Eden When you receive your pay, the income will appear as a positive expense in the Income for Next Month category. But this can be easily filtered out if you need a total expense report. Or it can be left in if you need a net expense report. Then it will get to the income portion of the report on the 1st of the next month. In your case, you actually missed the income when you receive it ($0 transaction on that day) so it still messes with the reports (no income shown) but also prevents you from reconciling your account between pay day and the start of the next month. With the solution I gave, your account ledger in YNAB is always correct and it's always possible to reconcile.

      Like
      • Emily Eden
      • emily_eden
      • 5 mths ago
      • Reported - view

      Ceeses Matthew

      Don't think I did it right. May budget didn't show income from Apr. Can't budget. Report is 0 income for May. 

      Like
      • Emily Eden
      • emily_eden
      • 5 mths ago
      • Reported - view

      Think I figured it out. Shouldn't budget for March. Only add end march income for Apr budgeting.

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

      Emily Eden The screenshots seem to show it worked at intended. The April income shows in April as you received it in April. For the moment, no income shows in May in the Income part of the report because it is in the Income for Next Month category. But because it appears in the Expense part of the report, the net income is correct. Once it is released to TBB, it will show as income for May and disappear from the Income from Next Month "expense" category.

      Like 1
      • Emily Eden
      • emily_eden
      • 5 mths ago
      • Reported - view

      Ceeses I was trying to figure out why I have 0 fund for May to be budgeted. the budget was red (negative). 

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

      Emily Eden You put the starting balance in Fun Money and not To Be Budgeted. And you also have an outflow on 31st December without a category (strange that it says category not needed) for HK$3,000. Which I'm pretty sure was probably taken out of To Be Budgeted. So if you budget the HK$50,000 of income every month, the To Be Budgeted will be short by $3,000. Which will only show in the last month with money budgeted.

      Like 1
      • Emily Eden
      • emily_eden
      • 5 mths ago
      • Reported - view

      Ceeses I changed starting balance category from inflow to fun money because it is my savings. Not really the income for the month. I don't want to budget my savings 100k for anything but keeping it as savings and untouched. Thought that would be easy fix. The 3000 is credit card starting balance. Maybe that's why no category. Can't group into one. 

      Like
    • Emily Eden I'd recommend categorizing all of your starting balances as Inflow: To be Budgeted and then budgeting the money to your savings categories. It's not a big deal either way, but if you budget the starting balance directly to a category, your reports are going to come out looking odd, because the starting balance will be considered "negative spending".

      Like 1
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