Trying Out the YNAB Buffer

"Buffer"

- Money that allows you to separate the timing of your budgetary actions from the event of your paycheck while following the YNAB method of making decisions with dollars in hand.

How does it work?  You have enough saved up to live on so that all the money earned in one month can then be budgeted in the following month.

Life with the Buffer:

  • User can utilize YNAB method and software while easily making decisions about employing dollars each month.
  • With the recategorization method, no dollars get lost.  While losing the abstraction of dollars is not as bad as losing real dollars, often times the former causes the latter.
  • The budget meeting can happen at the convenience of the decision-makers (at any point after the last income of the month is received, and preferably before/around the start of the new month).

Life without the Buffer:

  • Incomplete information, disorganization, and lack of perspective lends to overwhelming panic while deciding where to put dollars in the budget.  Is that statement too dramatic?  Perhaps.
  • Less than optimal or flat out wrong categories may get funded, leading to spending decisions that indirectly cause unnecessary WAMing (at best), negative progress on goals (not great), or insufficient funds (at worst).  Put this together with SFTF, and the way YNAB the Software works can seriously hurt the unsuspecting user's tenacious finances.

Life in the middle:

Before I learned of the YNAB Buffer, I realized that there needed to be some system to augment the decision making interface YNAB provides.  Using the principles of the YNAB method (give every dollar a job, including true expenses), I would write out all income I could expect, then all the categories that needed to be funded with that money, at which income event.  This allowed me to fiddle with numbers until they fit together well while ensuring that priorities were balanced (ie, later events were not forgotten).  Each paycheck, we would go down the paper and type the appropriate amounts in YNAB.  This saved countless hours and concern.  When our budget started to normalize, a spreadsheet made sense so we could easily copy/paste between months.

To Buffer or Not?

It used to be YNAB's Rule #1.  Then it was Rule #4.  Now it's officially invisible.

Some people place this financial goal before all else, because it provides clarity of decision-making. 

When I learned of the buffer, I prioritized a bit of savings and complete debt paydown first, because I knew the interest impact waiting 2-3 months for a debt focus would have had for me, and I was not OK with that cost.  Besides, I had a workable system, if not native within YNAB, that provided me with clarity when budgeting.

Others don't use this Buffer, preferring to budget endlessly into the future if they have money beyond this month's needs.  From where I see it, this has a few drawbacks, namely Stealing From The Future, poor perspective in weighing priorities across months, and most of all, the increase of busywork required when things change.

Another reason people don't use the Buffer is that it can take time to save enough to make it a reality.  If it is not presented as an important part of YNAB (it's not, anymore), then new users have little impetus to choose this financial goal.

Gaining the Buffer

I went ahead and mapped out my budgets for the next year, showing how we were going to approach our savings goals, and the Buffer was one of the first goals.  I projected that we would be able to use March's money for April, and then we'd focus on the next most timely savings goal (then the next, and next, reverse snowballing until we reach a more steady state - surely there's a better name than unrolling?). 

WordTenor contends that the only people who say the Buffer is not a priority are people who have never experienced YNAB with the Buffer.  I like challenges. 馃槂 Also, I'm impatient.

So, I decided to reallocate from a longer-term savings category to January's budget.  All of January's income is/will be in my INM category, waiting to be released on Feb 1st.  I am buffered.  Further, I can check to make sure I'm not losing (abstract or real) money because I have two benchmarks - the original amount of that savings category as well as my original calculations on the spreadsheet through March. If I am in the same place with those metrics on April 1st, I will consider my Buffer Acquisition successful. 

If truth be told, I seriously doubt the buffer will change much of our decision-making or provide clarity we don't get in the spreadsheet.  Clarity is important.  We already have it. But, we shall see.  I do think it will save us time interacting with the budget. About 5 minutes a month.

Hanging on to a Crutch?

dakinemaui thinks I'll stop using the spreadsheet after a while.  We shall see. 馃

At this time, I fully intend to maintain our spreadsheet.  It has so much valuable information to us.  Not only can I easily compare budgeted amounts across months, but I have a worksheet with our savings snowball/rollout all figured out (and it feeds into the worksheet with the budget, now...).  While I can calculate in my head (probably not as fast as someone who practices every day), if the relevant information is not presented FRONT AND CENTER (or at least with an obvious indication), I simply won't remember what the plan was next. I would then get caught up in the moment and think, "yes, I can budget $100 of "extra" money on manipulatives that will get torn up in the classroom" (or some other thing that shouldn't be a priority but could seem to be).  I could make a list, but what if that list had good ideas that weren't quite feasible? 

I really enjoy the confidence that dry runs of scenarios give me.  It allows me to check for any mistakes or holes in the plan and fix them before implementation.  And yes, having a buffer did save me time creating those other budget months in the spreadsheet - I only needed one column per month, not three.  When we sit down each month to do the budget, we'll likely save about 5 minutes by only having one column to take into account. Also, the single column will leave less need for error detection. Wins!

Comparison

While it's impossible to make a true comparison of two separate realities in the same time frame, I intend to come back here and record my impressions.  I doubt I'll remove the buffer, but I don't think it's astronomically better than my spreadsheet operations.  If I do stop using the spreadsheet, I'll consider the Buffer more impressive than I do now.

Instructions/Complications

I also intend to comment below with the workflows used to catch and release income or anything else useful.  That way, new users may be properly informed of both the philosophy and implementation.  It's nice to not have to comb the forum for info.

Also, dealing with paycheck deductions is a bit of a hassle.  I know nolesrule includes some deductions with your paycheck, though my understanding is that that would be even more complicated with YNAB4 (I've never used it).  I'm curious about your workflow/set up for that.

Thoughts

If anyone else has anything to add about using the buffer or its benefits, feel free to add your tips!

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  • Disclaimer: Everything I know about the YNAB Buffer has been learned from this forum (actually, there was one old Whiteboard Wednesday that mentioned the concept without the name, too.  Jesse had a nice visual, there). I've most commonly seen the following workflows and terminology explained by dakinemaui , so all credit to where it goes.  I'm just trying to consolidate advice to make it easier for newbies to find.  I want to be able to send them here, where all issues are explained, rather than writing it out again.  Or at least make it easier to copy/paste. Or maybe I won't feel the need to write out all possible scenarios and solutions and can just respond to the specific post.  What a concept.  Brevity.

    Using an Income for Next Month (INM) Category
    Note: All workflows below speak of "this" month as being the month to receive income and "next" month as the month to budget income.
     

    Category Approach for Catch/Release
    1. Create transaction for paycheck (scheduled, if you can - it saves work and prevents errors).  Categorize to INM.

    2. As money comes in, do nothing outside of regular reconciling.

    3. When it's time to budget for the next month (after all paychecks for this month are in, typically),
        A) Go to All Accounts view.
        B) Search for your INM.
        C) Select all instances (use the checkboxes and shift key).
        D) Click the "Edit" menu.
        E) Change category to TBB.

    4. Go to the next month's budget.  Budget.
     

    Budget Manipulation Approach for Catch/Release
    1. Create transaction for paycheck (scheduled, if you can - it saves work and prevents errors).  Categorize to TBB.

    2. As money comes in, budget the entirety of your check amount (excluding returns/refunds/other thing that should go elsewhere) to your INM category.

    3. When it's time to budget for the next month (after all paychecks for this month are in, typically),
        A) Go to this month's budget screen.
        B) Move money (by clicking on the available bubble, typing in the budgeted column, or using the Quick Budget "Set available amount to 0" button) from INM to TBB.
        C) Click to next month's budget screen.

    4. Go to next month's budget.  Budget.
     

    Important!  Do not mix the approaches!  It won't work. :)
     

    Comparing Each Approach

    The Category Approach is more hands off, results in a cleaner budget, and is less error prone because it automatically sequesters money until you are ready to budget it.  Because you recategorize via clicking, there is no opportunity for typos or mixing unwanted transactions into your money pool.  There are more systematic checks to ensure accuracy with this approach.

    The Budget Manipulation Approach is easier to use if you are working to attain the buffer or think you might have to pull from it this month.  However, you have to be ready to actively put those dollars into the INM, and typing allows for the possibility of typos.  Further, money that should not have gone into the INM (but was in TBB) can get accidentally missed, depending on the timing of inflow transactions. 

    If you have more to add, please do!

    Like 3
  • Gaining the Buffer

    As I see it, there are a few ways to get the buffer.

    Make it a savings category with high priority.
    Decide that you will set aside X amount until the category balance is high enough to budget your regular month's budget.  Each time you budget your paycheck, pay attention to category balances and move extra money to the Buffer category.  For example, if you don't need to fund groceries/fun as much because you were good at being frugal, put the amount that was left into the Buffer.  When it's time to use it, rename to INM and move the category to the top of your budget (if it's not there already).

    Use the INM as a rolling "Budget Manipulation" category that gradually increases.
    This works well if you already have expenses at the beginning of each month that need to be funded and you don't like rolling them over, like groceries or other variable expenses.  Calculate what you need (let's say $417.31 for groceries, gas, household, and fun) until the first paycheck of the month hits.  Budget that amount in the INM every month, and when the month rolls over, move it to the appropriate categories.  That will make the available = 0 and the budgeted -417.31. If you can put enough money in the category to make the budgeted >0, then you'll know you're progressing.  For example, the next month could have 562.51 available at the end, and the budgeted line will show that you contributed $145.2 more towards this goal.  You can then turn over the month, empty the INM category, and start filling up categories. 

    This way easily morphs into fully using a buffer, because as you approach being buffered, it will be really easy to say, "Hey, I have $2000 in this INM category at the start of the month.  I think I can get away with not touching this month's paychecks and skipping some of the things we normally fund.  It's the home stretch!"

    Forego all non-necessities!
    This may be extreme if you have a lot to save and need multiple months, but if you're close to being buffered, try only funding what you absolutely spend on (and probably true expenses - they're on a timeline, too) and making your money stretch across the next month without touching paychecks.  I know some people would do this and not even contribute to an emergency fund, because they know Efund contributions will pick up again soon.  Besides, people can make the case that the Buffer itself is also an Efund of sorts. 

    Reallocate from an existing savings category.
    If you have enough money saved in an emergency fund, down payment fund, or other savings fund that doesn't have a pressing timeline (don't reallocate from car insurance, right?), move enough money to fill out necessary categories on the 1st of the month.  Then don't touch the paychecks until next month.

    Use a windfall.
    Really, this is like the first way.  Instead of putting a bonus, tax refund, gift, extra paycheck, personal stuff sale proceeds, etc. to fun things, put it towards the buffer first. If it's the highest priority, it's the highest priority.

    Does anyone else have suggestions?

    Like 2
  • The Complication of Paycheck Deductions

    Now, if you only put your net income in YNAB, you don't need to worry about this.  I started putting deductions in because when the time came to decide on health insurance, I wanted numbers. YNAB had been giving me lots of good numbers, so it seemed a logical way to look at my numbers in comparison to the plans' numbers.  Around this time, I came upon Superbone talking about how he tracks investments, too, so I started playing with options.  This was easy to do when I budgeted the income as I received it. 

    Pushing income into the budgetary future really only works for the regular budget, though, not deductions.  I have my deductions as transactions split on the paycheck, and that money needs to be budgeted to cover those transactions when they happen.  There's no point to funding them before the paycheck hits, if that were even feasible.

    Current Set Up

    Step 1
    Split #1:  what hits my account (inflow, no category)
    Line 2: gross - total deductions (inflow, INM)
    Line 3: total deductions (inflow, TBB)
    Line 4-rest: each deduction (outflows, appropriate category in Ded. group)

    Step 2
    In this month's budget, select Deduction category group and "Set available to 0."

    Step 3
    Continue with category approach to buffer and budgeting.

    Concerns

    When a deduction change needs to be made, there are four lines to change (for each scheduled paycheck, too).  Let's say something decreases.  For an increase, flip all prefixes:
    1. Actual deduction amount (line 4ish). 
    2. Increase to Net in checking (line 1).
    3. Increase to line 2.
    4. Decrease to line 3. 

    Is this the most efficient way?  nolesrule , what do you think?  I don't know how much of this translates from YNAB4, but I know you track deductions as well as use the Buffer.

    Like 1
  • I put the following process on someone else's thread about using YNAB.  The reason I think the buffer is not as much of a game-changer for us is because I created another system to deal with many of the issues that the YNAB Buffer takes care of.  Over the next several months (think May/June, it's a long swim from here to there before I get to come up for air again), I might try simulating the decision making within YNAB, but this is how our spreadsheet started.

    Physically writing out and calculating on paper how we were going to make the month work was absolutely imperative when we started. Every month for the first several months followed this pattern:

    1. How much money will we have to work with? Write at top left, with paycheck breakdowns.

    2. What categories do we need to fund and how much? Make a list with numbers. We did this with YNAB open, because I had category balances, goals and scheduled transactions to tell us important numbers.

    3. Add up category numbers. Wait, that's more than we make this month. Where can we cut? Re-evaluate step 2 and repeat step 3 until budget $ = inflow $.  With the spreadsheet, I enjoy that the calculations take care of everything here.  I just look at my cell for "TBB."

    4. Figure out which paycheck needed to fund which categories. Mark them. Our symbol was an arrow. If we had 3 separate income days, I'd make 3 lengths of arrows and put the number through the long line.  After a while, I would just write categories in their appropriate columns, and that's how the spreadsheet works now.

    5. Add up categories for each arrow and ensure they equal the designated paycheck. If not, fix step 4 again.  With the spreadsheet, the calculations take care of everything here, too. 

    6. If a category needs to be partially funded with two paychecks, mark those amounts. 

    7. Eventually I got tired of splitting category funding across paychecks, so if $14.78 (it's never a nice number) was left from the first paycheck, I put it in a holding category called Budgeting Logistics (or End of the Month or Funds for Next Paycheck's Budget Session), and then moved it back into TBB when the next paycheck came in. I don't recommend this until you're comfortable with the other calculations, but it does get you ready to start building a buffer with the same mechanics.  Spreadsheet mechanics ended up with a holding category that I automatically included in the pertinent paycheck's TBB formula.

    8. When paychecks come in, get YNAB ready!  A) reconcile accounts (if they're not), B) cover overspending if you are not increasing debt, C) go down your list and input all values for that paycheck. Type +xx in budget cells, because there is likely already a number in it, and you want to add your budgeted number. 

    9. Double check that nothing is overspent or overbudgeted and that real life hasn't changed what you previously decided your priorities were for that paycheck.

    10. Smile. It will get better. Or grin and bear it, whatever your personality is. :)

    This process really helped us, because we could see all categories and responsibilities at once on the paper, ensuring that nothing got forgotten. Also, we were starting with a blank slate on the paper - no funny numbers from WAMing in the budget column to confuse us or cause a typo. If we needed to erase while putting the puzzle together, we knew we weren't messing something up with the real budget (that happened more times than I can count. I hate losing abstractions of money! A lot of frustrations and time were involved trying to error detect whatever numbers we were playing with on YNAB. That alone made the paper worth it for us).

    No month was the same. Especially because, at the beginning, there were overspent categories. So, we'd count those as required amounts and figure out where to cut to make those possible. It took a few months (and specific willpower before spending) for us to stop "floating" those overspent categories in the budget, which made the planning part much nicer when we got there.

    This, and this alone, is something I figured out - out of screaming (actually, we were very quietly overwhelmed and frustrated - sometimes that's worse) necessity, long before I ever went to the forum.  I include this because it's the main reason I think the Buffer will only have a slight change for us, and that's something I'd like to keep tabs on with this post.  I also think that it could possibly help other people who can't get the Buffer quite yet.

    Like 1
  • TRULY WONDERFUL summary of background, advantages, and various tidbits collected over the years! 馃憤馃憤

    Like 3
    • dakinemaui I've had good resources, so thanks to you (and the other forum people)!

      Like 1
  • Regarding the Budget Manipulation approach, it's easiest to just delete the budget entry at the end of the month (to release).

    Also as a recommendation, I favor the Budget Manipulation approach while you're partially buffered (splitting income between months), but then switching to the Categorization approach after you can push all income into next month. It's easier to put a variable amount into the category with a budget entry, as well as pull some out if you get a little too optimistic about your needs. In contrast, the categorization is harder to pull money back, which is exactly what you want when fully buffered. You should strive very hard to keep each month standalone.

    It's like a tiny Fresh Start every month. Reset and face the coming month with eyes open and fire in your belly. 馃槈

    Like 1
  • Move Light Sound Life I just wanted to thank you for taking the time to write all of this up. I've read every word and recommended it to all of my colleagues.

    One thing you said really stuck with me: "Another reason people don't use the Buffer is that it can take time to save enough to make it a reality."

    That's true, and it's a real concern.

    But we already officially recommend something almost totally analogous: getting off the credit card float. There's almost no difference between the process for getting off the float and getting a month ahead. Getting off the float means going from being a month behind to "on-month," for lack of a better term, and becoming fully buffered means going from "on-month" to a month ahead.

    Both goals require injecting a lot of additional money into the budget, from any and all of those sources you recommend. That can be daunting, of course, and may take a long time if you're in a tough spot when you come to YNAB. But one of the most important things I've learned since starting my own YNAB journey is that a healthy budget has to include a lot of money sitting around doing nothing. There's just no way around it!

    Like 6
  • What a well-written synopsis! I came to share my despair at having lost my buffer so others can be reminded to protect theirs or be inspired to create one. 

    100% agree with WordTenor . I鈥檇 had a buffer for over a year. Didn鈥檛 need to time or even pay attention to when paydays were. Bills got paid immediately. On the 1st of the month (joy!) INM was waiting to fund all of my categories for the new month. Rinse and repeat. 

    Then I neglected the budget for about 6+ weeks while travelling during the holidays. My buffer went up in smoke. (On the plus side, without a buffer that same spending could have become debt, talk about despair!)

    Now payday feels soooo far away. It鈥檚 just a few dollars shifted by just a few weeks, but it鈥檚 the difference between feeling rich and like I鈥檝e got my sh** together, and feeling poor and behind, scrabbling to catch up. (Choosing to live lean for 2 months rather than pull emergency funds as being lazy and wasteful is not an emergency)

    Take away: Use YNAB! I was following the YNAB rules but using Excel instead of the app. It was difficult to keep up with while travelling and it was impossible to coordinate well with my husband. I鈥檓 2 weeks into the free trial and I鈥檝e already subscribed; it鈥檚 awesome!

    Recommendation: You say you rely on your spreadsheet partly b/c 鈥渋f the relevant information is not presented FRONT AND CENTER (or at least with an obvious indication), I simply won't remember what the plan was next.鈥 GOALS provide the plan for what鈥檚 next. You don鈥檛 mention them; give them a try if you haven鈥檛 yet. Definitely interested in your analysis!

    Happy YNABing!

    Like 2
    • Kensington What a good reminder!

      I use the spreadsheet for planning purposes only - if I had to rely on it to inform spending, I'd have to set up a way to input transactions and make registers talk to the budget. My husband says this would best be done using an access database, which I would have to research. At this time in our lives, that set up overhead is worth $84 a year to have YNAB make it more polished and mobile. It has certainly paid off for us.

      Regarding goals, yes, I use them, mostly for quick budgeting efficiency. However, they don't fulfill the same purpose as the spreadsheet, which ensures all priorities are met, zero-sum, across time. We haven't had many months that started out with the same budget. I think our max in a row was four. Perhaps this is because we're still building spending/savings routines or were paying down debt. Our spreadsheet outlines the goal timeline, ie. what we're focusing on first, when it will reach a normalized amount, how much we're putting where in each month. It means we don't have to rehash those discussions every time something gets implemented. 

      Also, since starting this post, I have linked my savings snowball worksheet to the budget worksheet. That way, if we get any extra income, it's exceedingly simple to see where it's supposed to go right now.  I just input the numbers in my snowball spreadsheet (which has each month divided into normal budget contributions to that category plus snowball contributions), take a minute to manipulate the thresholds, and the budget numbers are correct in the worksheet I use to plan the budget. Also, it's a matter of seconds to change the contribution amount horizontally across the year for a bill whose amount changes, as well as where the extra will go/come from.

      Like 1
  • I found it incredibly hard to put money into a buffer category ready for the start of the new month. When I experimentally moved to budgeting into the new month instead  it was a game changer for me.

    I had to give myself the rule that I NEVER used the money coming in for this month's stuff. This month all had to come from wamming between categories. So ALL money that came in was budgeted next month.

    My categories are ordered by priority, so as money comes in I budget down the list. 

    This is working for me because (a) any overspending has to be assessed against my current budget amounts, which can be painful and a good learning experience, and keeps my spending in check. And (b) seeing the money go into the categories and seeing the categories next month which don't yet have any money allocated removes the temptation to steal some for this month. I get a real sense of satisfaction as each of next month's categories fills up, and a sense of perspective with the ones that aren't filled. (Not all my budget categories can be filled every month, so I get that reminder that I need to keep a tight rein.)

    My income is very limited, so a tight rein is required to keep things under control. It would be different I think if there was more padding, and it was easy to shuffle some money for one big or distant pot to this month's needs. 

    I lost my buffer twice, by filching from it for this month's needs, and found I had a constant sense of anxiety about whether it would get big enough before the end of the month. By shifting to budgeting next month I lost a whole heap of anxiety I hadn't been aware I was carrying, until was gone.

    Like 2
      • Owlette
      • owlette
      • 7 mths ago
      • Reported - view

      Cirrus Desperately trying to rebuild my buffer (The anxiety of life without it!) and I just filched from INM AGAIN this month 馃槚 because I hate WAMing (That $ was assigned to those categories for a REASON and they're ALL important!), so following your example I'll try budgeting into next month. I think you're right, it might be psychologically more difficult to take money back for the current month that's already been given a job, as opposed to taking money that's waiting to be given a job. It would hurt my heart to take a pretty green category back to yellow. Visually it will look like one of those thermometer goal charts right? I'll plus up SIFTBF to stave off WAMing as much as possible (and STOP SPENDING when the $ is gone). I'll be on guard for SFTF; have you been burned by that? Thanks for sharing your experience. We'll see how it goes!

      Like
      • Cirrus
      • Living mobile and solo
      • miriamnz
      • 7 mths ago
      • 10
      • Reported - view

      Kensington  you know, i think i would strongly advise you to WAM. Watch the green disappear when you buy things you haven鈥檛 budgeted for.  Yes, it is painful. It is the cost of spending. 
      the reality is that all those green categories are the things you   intend to spend on.  But you actually spent on something else.  Perhaps because the something else was more important. Or perhaps because (like me) you let your impulses rule. 
      It is this painful process of taking money away from the plan that either teaches you to stop doing it, or that your true priorities are different from what you think. 
      The best learning comes if you take from your green categories before you spend. I want those shoes that are on special 鈥 but to have them i have to take money away from ... vacation, xmas, delay buying a house, renewing the netflix subscription. Do i want those shoes more than those green categories? If not, then i cant afford it. Its this weighing up between the green categories and the current want that begin the mindshift that makes ynab a winner.   We have to change how we think about money and spending and we have to change how we act/spend. It is very hard, but the ynab method (decide where to wam before you buy) can help us do it. 

      Like 10
      • dakinemaui
      • dakinemaui
      • 7 mths ago
      • 4
      • Reported - view

      Kensington 

      Kensington said:
      That $ was assigned to those categories for a REASON

      Sure, and you ignored those guidelines for a STRONGER reason. Plans change all the time, and the budget is simply that -- a plan created with whatever information you had at the time.

      I'm certain you do this without question elsewhere in your life. Planned a picnic, but it's raining then and there? Are you really going to eat in the rain?

      Doggedly sticking to the plan when circumstances demand you adapt will never be as effective.

      Like 4
  • dakinemaui said:
    Doggedly sticking to the plan when circumstances demand you adapt will never be as effective.

     That was old-style budgeting. Rule 3 was revolutionary.

    Like 3
  • dakinemaui said:
    I'm certain you do this without question elsewhere in your life. Planned a picnic, but it's raining then and there? Are you really going to eat in the rain?
    Doggedly sticking to the plan when circumstances demand you adapt will never be as effective.

    Whoa, budgeting as metaphor for life. No, IRL I'm terrible at rolling with the punches. Being disciplined with my lists and calendar etc. is usually an advantage but a small hiccup often derails things. I can try to be more flexible, uncomfortable WAMing included. I don't want to derail my financial goals. 

    Like 1
      • dakinemaui
      • dakinemaui
      • 7 mths ago
      • 3
      • Reported - view

      Kensington I found that WAMing was actually key to better achieving my financial goals. Doing so allows me to put more money toward the important things. (That's the entire point of Rule 3, after all.) I also have a far greater understanding of what is important to me.

      Like 3
  • So, I thought I'd check in with my opinions on the above. 

    1. My husband never wants to go back to being without a buffer, even to pay off debt.  *He thinks it's entirely situational, depending on amount and rate.*

    2. In my view, being buffered has the additional benefit of giving extra time for decisions. For example, when we found out that April's income would affected (in March), we had a couple weeks to decide how to make cuts in April's budget, which was funded with March's money. So by the time May comes around with less money available, we'll already have a plan. 

    3. We did all of that decision making in my spreadsheet. I am never giving that up! It is so valuable.  I can see, in the future, when things are completely normalized, having just one budget template without making a copy for each month, but it will always be there, ready to be deployed if changes need to be made.

    Conclusion: The argument of needing the buffer to simplify decision-making/logistics is less powerful for me because of my spreadsheet. If that was the only benefit, I would certainly prioritize debt payments over maintaining the Buffer. However, the timing benefit is quite powerful by providing greater flexibility as things change, setting the Buffer as a high financial priority.

    Like 3
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 5 mths ago
      • 3
      • Reported - view

      Move Light Sound Life I鈥檓 wondering if there is an equivalent to schadenfreude when what the other party is experiencing isn鈥檛 misery but something good? Glee over someone else鈥檚 glee?

      Glad you are enjoying bufferdom.

      Like 3
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 2
      • Reported - view

      Move Light Sound Life thanks for the update! More time yielding more options is an excellent observation and pretty big advantage.

      I've also flipped back and forth between bi-weekly, semi-monthly, and monthly income streams over the past few years. Nary an impact to the budget. Remaining focused on priorities rather than timing has been so nice.

      Like 2
    • WordTenor 馃榿 Thanks for goading me into trying it ahead of schedule. 馃榿  I'm sure that goal would have been pushed back with all the events going on. 

      I don't know about the opposite of schadenfreude - there are evidently multiple takes on what the meaning would even be (Google search took me to a discussion on stack exchange). But, teaching my students how to celebrate/appreciate other people's wins is a vital part of their character development. It's also rather invisible.  I don't know of an all encompassing word, though German is good at smashing words together. 'Mudita/Mitfreude means "joy derived from the joy of others".' - Stack Exchange.

      I am trying to acknowledge the good things in life, especially now.  There's always cause for hope and celebration. The rest just requires reasoned persistence.  The Buffer does indeed help allay panic.

      Like 2
  • Couldn't live without the buffer. I keep a certain amount in it always. If I dip below that amount because of unforeseen expenses, I cover that overspending with the buffer...then responsibly top it back up when I get the chance. 馃檪 It has never failed me.

    Like
    • Powder Blue Cornet I think we are using the same word for two different situations?  The YNAB Buffer is a state of budgeting the entire month with money earned in the previous month. You're describing an "Unforeseen Expenses" category, which is quite valuable, but different. 

      Of course, it would help if the YNAB Buffer had a different name. Calling all wordsmiths? 

      Like 1
    • Move Light Sound Life The end goal of my buffer category is for it to cover the whole next month. I'm just not there yet. 

      Like 1
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 2
      • Reported - view

      Powder Blue Cornet The buffer Move Light Sound Life is discussing is a temporal buffer. It's purpose is to cover expenses between your income arrival and the end of the current month. It allows you to push all income into the following month, providing convenience (1-click budgeting of the month), advance notice/options, and a big-picture viewpoint aligned with the expense recurrence period.

      Much like a YouTube (streaming video) buffer, it hides the sporadic arrival time of dollars. It is not an extra source of funds for unanticipated expenses, since every penny already has a planned purpose. It is true that it could be reallocated to help out in an emergency, but you'd necessarily lose the benefit of the temporal buffer. (Much like reallocating from a Vacation category means you can't go on vacation.)

      Like 2
    • dakinemaui I'm well aware of the concept and I am building toward its full expression. I dont have the complete stability/convenience that you are talking about, but that doesn't mean we aren't talking about the same fundamental concept. 

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

      Powder Blue Cornet I'm afraid it does when you're talking about something that can be used for unanticipated expenses. That means it cannot be used for normal expenses. Although different, they are both very useful concepts. There's no doubt that each can be converted into the other, which is likely why the difference isn't obvious to you or perhaps why you feel there is no difference.

      However, at any given time, it's an either-or prospect. This is seen most easily once you can push all income into next month's area. As soon as you use any of that money for an unexpected expense, you can no longer push all your income into next month until you've "topped it back up".

      Like 1
    • dakinemaui I don't come to a YNAB forum to mince semantics, but when I say fundamental, I am talking about something foundational, basic, in other words, something that isn't explained in terms of the manner in which it is put into practice. We are talking about different applications/extensions of the same fundamental concept of Aging Your Money. Our apparently differing financial situations cause us to apply the same concept in different ways. I do find it convenient to use my buffer category to cover unforeseen expenses, but the reason I created the category was to eventually build it up to what this post is talking about. To further clarify myself: when I can, I increase the amount of my buffer, and eventually, it will cover my next full month. And when you say either "the difference isn't obvious to you or perhaps ... you feel there is no difference," I am firmly in the latter category. We are both aging our money to increase stability and flexibility. I believe Jesse settled on the description Aging Your Money because it telegraphs what we as YNABers are really trying to do, regardless of our financial situation.

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

      Powder Blue Cornet 

      In my view, the entire purpose of an Emergency Fund is to deal with unexpected expenses without impacting anything else in the budget. The main purpose of the classic buffer is to insulate me from income arrival times. Hopefully you will agree that if I use the latter to replace the furnace, I am no longer insulated from sporadic income arrival times.

      As I see it, this is no different than reallocating from Vacation to fix the furnace and then not being able to go on vacation. Surely you don't regard an emergency fund as being equivalent to a Vacation category. And yet, they both "age my money".

      Likely we are at an impasse, but other readers can form their own opinions whether there is a concrete difference or not.

      Like 2
    • dakinemaui Currently, my buffer category is roughly 1/6 of my total monthly expenses. At this stage and practically, I only need one category that is primarily directed toward aging my money. I say "primarily directed toward aging my money" to distinguish this category from specific savings goal categories that are primarily directed toward covering future, known expenses like a vacation, but have the secondary effect of aging my money. With so little fallback money, it would be silly to have both an emergency fund and a buffer category. Because of my financial situation, those two categories would be serving the same purpose of aging my money to provide security and flexibility. Practically, it makes sense to combine them.

      So why do I prefer the name "buffer" for my category? First because it is more flexible purely from the standpoint of naming. I am not having an emergency right now, and even though the amount of money in my buffer doesn't constitute a complete "classic buffer," the money in that category still partially has the effect of the classic buffer in that it gives me some extra cushion so I don't overdraft because a bill goes through the day before I get my paycheck.  On the flip side, If I had an emergency, the name "buffer" still works because the money there would soften the blow of the emergency. Of course, I'm in a tenuous situation because I don't have a complete buffer or emergency fund, but that's just my situation. I also like "buffer" better than "emergency fund" because it reminds me what I am working toward, that is, the classic buffer.

      Going back to my prior point though, these sorts of categories that are primarily directed toward aging your money, and thereby give you a general cushion that provides security and flexibility (that is, categories that are not directed toward a specific, known, future expense) are really the same thing, and naming them differently really is a distinction without a difference. Of course, I'm not saying you shouldn't have two such categories. I'm just saying I would prefer to have just one, even if I did have enough money to allocate to both a classic buffer and an emergency fund.

      That is really all I have to say on the subject. Thank you for the discussion. Hopefully our exchange will be useful to some passerby.

      Like 1
      • Kit
      • kit
      • 5 mths ago
      • 1
      • Reported - view

      There's merit to both sides here. My understanding of the YNAB buffer zone is when you are paying for next month with this month's dollars. Once achieved, each paycheque keeps you in the state of being a month ahead.

      Pre-YNAB, a buffer was defined as a cash cushion, as the new 0 in your chequing account, the amount you never dipped under. Its intention was to handle minimal increases in bills or overspending and to widen the gap between your dollars and overdrafting . You budgeted $200 for groceries, the total was $202, so your cushion covered the $2. Typically, it was equal to 1-2 weeks of pay. This is a great first goal for new budgeters or those trying to get out of debt/off the credit card float. 

      As you move towards being buffered in the YNAB sense, a cash cushion isn't as necessary, but it's best to do what would help you sleep at night. 

      Like 1
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 5 mths ago
      • 3
      • Reported - view

      Kit Since I used YNAB back when one of the rules was "Live on Last Month's Income" which is this buffer, I tend to agree with the YNAB definition of buffer being that.  However, people can do what they need to.  On the other hand, it might be better to have a separate category for the cash cushion because you don't want to get in the habit of taking from your buffer when you finish it up someday.  I know I'm actually thinking about doing something like this because I keep moving "leftover" money into my E-fund category prematurely near the end of the month, then realizing I still need some of it and having to take back from that category, which makes me nervous because once I build it up, I don't want to touch it for spending but only for emergencies.

      Like 3
      • Kit
      • kit
      • 5 mths ago
      • Reported - view

      Good point on breaking the dip-in habit. I have a line item called $500 to manage that. Used to be more, but as I'm halfway through budgeting for May I felt comfortable reducing it. Can't see myself getting rid of it though. It may eventually become part of another long term savings category once I hit 30 days. 

      Like
  • Powder Blue Cornet said:
    give you a general cushion that provides security and flexibility (that is, categories that are not directed toward a specific, known, future expense

    I m sorry, I feel like I have to address this, as it's a critical distinction. This is absolutely true of an emergency fund. It is most definitely not true of the classic buffer and further evidence they are different.

    Every penny of the classic buffer is earmarked toward specific expenses. Mine are labeled Groceries, Internet, Restaurants, Gas, and so forth.

    Honestly, I do appreciate your comments. Hopefully the contrast is enlightening to other readers regardless of which side of this debate they may fall.

    Like 2
  • Powder Blue Cornet said:
    I don't come to a YNAB forum to mince semantics

     That's exactly why I like the YNAB forum.  Well, maybe not quite the same connotation of "mincing semantics," but I greatly enjoy discussing ideas about the best ways to plan, organize, and utilize YNAB to best support my finances. 

    It just turns out that we have to use words to explore those ideas, and then words to organize and label those ideas. Clarifying which words are connected with which ideas is part of having a fruitful discussion.  

    Someone informing someone else of a semantic misunderstanding of a label that has a specific history and meaning should not be taken as a judgement on the informed party, but rather an effort to help them join the discussion of an already established (and labeled) idea. In this case, the YNAB Buffer. 

    If you're not familiar with it, you're actually in the right place because the super long original post (at the top) that I made was an effort to collect all the information about it in one place. 

    An analogy:

    Person 1 begins discussing apples by compiling all known information about them, then outlining their take on the info.

    Person 2 comes by, outlining their take on oranges. 

    Person 1 says, "Hey, oranges are great, but they're different from apples in these ways."

    Person 2 says, "But they're both fruit, aren't we taking about the same thing?"

    If you try to use the same recipe for apple pie with oranges, you're going to have a hard time. 

    If you try to interchange the functionality of the Classic YNAB Temporal Buffer with the popular understanding of a financial buffer, you're going to have a hard time.  One's on an X axis, and the other's on the Y. Or Z. It's on a different plane of logical rules and logistical implementations. Related - ok. Similar - sure. But distinctly different. Many details are above.

    With that analysis of why discussion can be difficult, I hereby move that the Classic YNAB Temporal Buffer be renamed to the "Bumper." At least with a new name, people can stop and say "What the heck is a bumper?" Rather than persisting with misunderstanding/misnomers. 

    Please, someone come up with something better. 

    I suppose the CynabTB does "bump" money to the next month...

    Like 3
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • 1
      • Reported - view

      Move Light Sound Life I like the modifier better than a new name. How about just TB for short?

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • 2
      • Reported - view

      Move Light Sound Life 

      Move Light Sound Life said:
      With that analysis of why discussion can be difficult, I hereby move that the Classic YNAB Temporal Buffer be renamed to the "Bumper."

      It has  a name, but people just don't use it. I've been railing for people to use the correct term for years. "Income for Next Month" or INM. It doesn't require (nearly as much of) and explanation as any of the other terms. Alternatively, we could base it on the wording of the Classic Rule 4 and call it "Last Month's Income" or LMI. Either way, it's using one month's income to fund the next month's budget and can be interpretted from either phrase.

      P.S. "bumper" is too much like "buffer", both in sound and in basic meaning.

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • 1
      • Reported - view

      nolesrule Even better. I originally called my nYNAB category Buffer but renamed it to Income for Next Month quite a while ago.

      Like 1
    • nolesrule "Next Month's Income," while using 4 syllables like "Classic Buffer," is longer to type. NMI is an acronym. Handy, but not as memorable as a name. But at least it has history. Making words up from scratch is a bit of a farce, anyways. 

       

      nolesrule said:
      but couldn't get people to jump on my bandwagon.

       I always attributed your winning forum demeanor to the part of the country you're hailing from.  馃榿

      You have good ideas. 馃槈

      Like
  • nolesrule said:
    It has  a name, but people just don't use it. I've been railing for people to use the correct term for years. "Income for Next Month" or INM.

     That's interesting. I've seen both used, but I had thought the more official term was the buffer.  I guess I haven't been around long enough. 馃檪

     

    nolesrule said:
    It doesn't require (nearly as much of) and explanation as any of the other terms.

     That's true. I had something concrete to find out about when I happened across INM. 

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

      Move Light Sound Life I'm not sure how official a term "The Buffer" is, but I've been against it for many years, but couldn't get people to jump on my bandwagon.

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

      Move Light Sound Life The INM phrase started being used when nYNAB was released in order to re-create the YNAB4 built-in "Income for <next month>" category, where <next month> was actually filled in with the month after the transaction date; e.g., "Income For May" when dated in April.

      There was a lot of confusion about what it meant (still is, apparently). Quite possibly because YNAB themselves couldn't agree. Jesse's vision was not what was implemented in YNAB4. I (and others) think we simply got lucky, as his vision was along the lines of a source of "extra" funds. Some help articles directly spoke to that vision and were contradictory to implemented usage. (Am I buffered if I am paid on the last day of the month? The official answer was no, clearly missing the point that the "Buffer" existed on a continuum. Again, contrary to the implemented product itself.)

      Like 1
    • dakinemaui That is really very interesting. Thanks for sharing! I wonder if anyone from the company will read this. 

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

      From the classic Rule 4 docs, note the usage of the (capital) Buffer:

      In order to live on last month鈥檚 income, you first save up enough money to cover a month鈥檚 worth of expenses. When you save this money and put it to work, we call that a Buffer. The buffer allows you to put some space between when you receive your income and when you actually need to put it to work. This breaks the paycheck-to-paycheck cycle, provides you more time to plan when the unexpected happens, and also allows you to budget for the whole month at once.

      To further confuse things, the above is incorrect as you didn't have to save up "enough money to cover a month's worth of expenses". Witness someone paid on the last day of the month who was Buffered without saving a penny (assuming no expenses paid on that last day). One can quibble about what does "save" mean, but when some people can get it "for free", that rather excludes the thought of saving for them.

      nolesrule I don't think of the Buffer as next month's income. As I see it, it is the savings that allows you to fill the NMI category. It's what you would live on if you weren't paid. Fortunately, one does get paid, and money is fungible, so the distinction is of academic interest most of the time. Assuming you are paid, it can be in next month's plan by changing your perception (like many things in YNAB). I'd submit that it's those savings that comprise the Buffer, if one had to put a finger on it.

      That is also consistent with the difficulty (or lack thereof) in becoming Buffered. For the interest of others, one recommended approach to get Buffered was to create a category for those savings, which were used to fund the remainder of the "transition" month. In other words, the Buffer (savings) enabled the state of "being Buffered". Also from those classic Rule 4 docs:

      Specifically, you鈥檙e going to budget some money each month to a Buffer category, then put it to use when you have reached your goal.

      These days, it's easier and more intuitive to speak of "pushing all income into next month". This switches to focusing on the "being Buffered" aspect instead of the "Buffer" (savings) aspect; in other words, the "other side of the coin" that is the classic Buffer/Buffered workflow. That also sidesteps the nYNAB-specific confusion about saying, "I'm a month ahead" which is just as ambiguous and misunderstood as "buffer vs. Buffer".

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

      Hmm, YNAB is apparently stripping links. The classic Rule 4 description can be found here:

      https://web.archive.org/web/20151202063929/http://www.youneedabudget.com/support/article/rule-four-live-on-last-months-income

      Like 1
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • Reported - view
      dakinemaui said:
      his vision was along the lines of a source of "extra" funds

      To elaborate, Jesse's idea of a Buffer was you didn't have to touch new income for 30 days, and one could reallocate as needed. Reminder, this is my understanding of things, but that's backed by what we got with the Age Of Money metric. Well, sort of, since that also has an average and the fact you have to spend to update the metric.

      However, AoM and indeed anything about specifically 30 days is a useless concept for various reasons expounded elsewhere, and the classic concept remained superior. The latter isolated the user from their particular income arrival times and aligned the budgeting process with the expense recurrence cycle.

      Like
    • dakinemaui That's fascinating. I know I started YNAB just a few months before they overhauled all their educational material.  Articles, Help Docs, and Videos that had been quite clear with good examples for applying the methodology in real life through the software became over-simplified in the 2019 overhaul. I lucked out, because I learned a lot from good, official channels, but it's been hard to pass on materials to others that may be interested in YNAB.  

      Although, Jesse originally wanting to be able to not touch money for 30 days seems more in line with earning all of May's budget money before April 1st.  It doesn't seem to be a source of extra funds for unexpected things in the current month, because then the money would be touched. 

      Most of us on this thread know that the Age of Money calculation does not play nicely with Saving for True Expenses. One renders the other meaningless. 

      More thoughts. I'm thinking that I've done enough thinking for the day.  Have a good one!

      Like 1
    • Move Light Sound Life Probably not.

      Seriously, there is considerable ongoing internal discussion about this topic. I'm not in a position to share much about that or when/whether it will influence the product, but I think it would be fair to say that "Age of Money is a valuable motivator for new users" and "'Live on last month's income' is a better way to express Rule 4" are both very popular opinions.

      Like 7
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 5 mths ago
      • 2
      • Reported - view

      Matthew But is Age of Money a valuable motivator for new users because of it's inherent value or is it valuable because someone is telling them it's valuable (or implying it's value)? As far as I can tell, it seems to be the latter, and quite often attributed to the assumption that it's a calculation of how long your money will last.

      Like 2
      • dakinemaui
      • dakinemaui
      • 5 mths ago
      • 4
      • Reported - view

      nolesrule or they mistakenly believe it to measure how far ahead they are (which is only subtly different).

      Given the prominence on the budget page and the fundamental purpose of YNAB, it would be nice if it had something to do with the budget. Reward True Expense contributions. Viscously penalize the leaving of cash overspending that is a substantial portion of on-budget cash. Reward covering of overspending. Reward getting TBB to $0. Reward reconciliation. Reward manual entry (aka "being up-to-date"). Reward additional money budgeted into next months area (vs. last month). Reward decreases in CC float (account-category difference). Another bump when reaching PIF.

      Use gamification to promote those good habits. No, it's not measured in days, but it will help users.

      Like 4
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 5 mths ago
      • 3
      • Reported - view

      Matthew Bonus to the above: it will cut down on the disappointed, "I bought my house and now my AOM is 6 days what gives" negative ratings. 

      Like 3
  • Move Light Sound Life said:
    NMI is an acronym.

     Since we are splitting hairs, it鈥檚 actually an alphabetism. 馃槀

    Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 5 mths ago
      • 5
      • Reported - view

      Not only is it a better way to express Rule 4, it鈥檚 actionable unlike the current Rule 4 which happens naturally by following Rules 1-3.

      Like 5
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