How do I get my month in sync with my salary paydate?
I am new to YNAB and I am from Holland. I am having trouble filling in my budget because I get paid on the 21st of the month. I can't get the numbers in YNAB to reflect that the money that comes in at the 21st of the month, pays for my bills until the 21st of the following month.
Is it possible for me to start to budget my month from the 21st of every month?
Thanks in advance for helping me!
If you put in a month's worth of money on the 21st, then that category is should last you until the following 20th. You already know that, so don't get thrown off by the month-oriented layout of the budget. You're always going to be looking at the current month for spending guidance, and anything not spent this month will carry over into next month.
Long term, it is useful to budget in sync with your expense recurrence cycle (typically monthly). The general idea is to be far enough ahead that you don't need to budget any of your checks received this month in this month's area. You can then temporarily stash/accumulate all income (paychecks, interest, side-jobs, whatever) until the end of the month, at which time you budget the entirety of next month at one go. This is a huge simplification for anyone with multiple income events.
While you may not see much difference (being paid monthly), the same principle applies to allow you to be "synced" to the calendar boundaries, should you wish to do so.
Two ways to get ahead:
- Grow funds in a dedicated category to eventually cover budget entries made after the 21st in the current month. This keeps all the "getting ahead" consolidated so your normal categories are on consistent timelines until you make the one-time switch of everything to the calendar boundaries. I definitely favor this approach, as it's very simple.
- Put slightly more than 1 month's worth in a category each month until you've pushed the "end of funding" to the end of next month. If you put 34 days into Groceries on the 21st, it will last until the 27th of next month. Do that again, and the Grocery funding goes until the end of next month. Revert to the month-sized amount. If you have a normal (single outflow) expense occurring after the 21st (e.g., $100): if you budget $150 this month and $150 next month, then that category will be synced to the calendar month. Repeat this process for each category until everything is aligned.
A related approach to #2 is to make two budget entries -- one for the remainder of this month (in this month's area) and the remainder in next month's area (including the "extra"). I dislike this for several reasons, but you'll see it being mentioned.
At the beginning, this is really confounding. I get paid every two weeks, and had to figure out the cycle of bills and budget categories that needed to be covered by the current paycheck, and which would be covered by the next, and my head spun for a couple months.
However, once you find your rhythm, and especially when you're no longer spending dollars you earned THIS paycheck (but dollars you earned LAST paycheck), the months feel more comfortable.
I used an Excel spreadsheet to help me calculate how to divide up the bills and other categories by paycheck, and I only needed it for a few months until it clicked and I was able to do it entirely within YNAB.
I like the idea that dakinemaui shared, and while I budget a different way, I think it's solid advice!