JoeDid The use of the word “luxury” to describe something that used to be the first rule of the YNAB method, and a goal that everyone was supposed to be striving for as quickly as possible, is a very interesting shift. 

In any event, I use multi-select to use different quick budgets on different sets of categories, based on what the purpose of those categories is. It’s useful when you’re buffered, too. 

JoeDid 

JoeDid said:
 As someone who has the luxury of budgeting ahead, you probably don't have any use for the ability to select category groups and use the inspector to budget "for that and only that selection" at any given time. You're not the norm, however, as I'm sure you are aware.

 I have come to realize, kicking and screaming all the way, that being a full month ahead of the budget and able to budget a full month at once is apparently not the norm for the mass of YNAB users.

What's really a shame is, it's no longer a goal promulgated by the YNAB organization.  From some time before I started using YNAB in January 2008, up till the release of the web version, budgeting a full month at once using income received in the prior month was one of the rules.  When I started, it was Rule 1 and was titled "Stop Living Paycheck to Paycheck."

YNAB had an elegant path to getting there:  Budget each time you get paid.  When you have extra money, budget it to a category called "Buffer."  When the Buffer accumulates to be enough to budget a full month, release it to (cognate of TBB) and budget the next month.  At that point, recognize all inflows as Primary Income (later, Income for Next Month) and go on budgeting on last month's income forever.

This work flow still works with the web version of YNAB, except releasing the Buffer category isn't a one-time event.  You have to do it every month, because the program no longer supports Income for Next Month.  And the organization gives newbies guidance to budget every time they get paid, no matter how far ahead they get.  No doubt people can make that work; but it is clumsier and less clear than budgeting a month at once, using income that was received before the month started. 

That's why many former YNAB 4 users work around to create Income for Next Month.  It's not mostly about preventing Stealing from the Future, though it will do that.  It's mostly about clarity and ease of workflow.  Even users who never saw a prior version of YNAB tell each other things like, "I just dump all of the extra money into my mortgage category next month, then budget the month for real on the first."

You would think YNAB would get a clue when users who never saw a prior version are figuring out ways to roll up a month of income to budget it all at once.  But instead, the sound track says to think about what that money needs to do before you get paid again . . . even when your paycheck doesn't have to do *anything* before you get paid again because you have older money to handle the near term.

Given this YNAB history, it was very hard for me to accept that not being able to budget a full month at once is not the norm.  It was even harder for me to accept that being able to budget a full month at once is not even an aspirational goal in the new YNAB.

Patzer That was so well said, and what I've experienced in 10 years of YNAB use too.  I just want to add, something I had to get used to in switching to nYNAB in 2016, was regularly "whacking-a-mole."  That was something I diligently avoided in old YNABs unless absolutely necessary.  When I overspent, I let myself be accountable the next month, and I needed that hand-slapping sometimes.  Otherwise it was like all the other budgeting apps that said "Oh well, you're in the red, try harder next month!"

Now, to keep away nags and go for all green, I'm constantly WAMing.  I'm not saying I was better off one way or another, but it was a big change in philosophy as far as I'm concerned, and one I had to adapt to in order to remain financially healthy.

WordTenor And I look forward to the day when I can reorganize my categories, moving them out of "First half of Month," and "Second half of Month," into a more category-based order. I call it a luxury. It'll be nice if it ever gets to the the norm for me.

WordTenor 

WordTenor said:
In any event, I use multi-select to use different quick budgets on different sets of categories, based on what the purpose of those categories is. It’s useful when you’re buffered, too. 

 Thank you.  I'd never thought of that, and it might save a few seconds and clicks in my monthly budget process.  Gave it a test with preview of July, and it works as expected; then I zeroed out July because I can't budget July for real until after I'm done spending in June.  I'll see how it goes when I budget July for real on June 30 or July 1.

Patzer As someone who only knew the method from the website and help docs, and didn't know about the forum, it quickly became clear that sitting down and hashing out our priorities every paycheck was not tenable: it took way too much time for us. 

We started applying the YNAB principles as a paper projection - what are our goals? Required responsibilities? Give paycheck 1 a job, give paycheck 2 a job. At the beginning, we inevitably were trying to have more jobs than dollars, partly because we were in the middle of spending cycles and also trying to combine finances. The paper let us try out solutions and easily see the whole jigsaw. 

Now, our budget is more normalized, but we still use the paper to create the plan. Then on payday, either of us can take the plan and crunch the numbers, without needing to sit down and figure it out .again.

When we get buffered (after debt is paid), we could use YNAB to plan with the income for next month workarounds I've seen here.  

As I'm teaching a few people how to use YNAB, I find myself saying, "and Rule 4 is ___, which is vague, but it used to mean Live on Last Month's Income." It's a more quantifiable, specific, actionable, and meaningful goal. 

Move Light Sound Life 

Move Light Sound Life said:
As someone who only knew the method from the website and help docs, and didn't know about the forum, it quickly became clear that sitting down and hashing out our priorities every paycheck was not tenable: it took way too much time for us. 

 From your mouth, to YNAB's ears!

Time was, one of YNAB's marketing tags was "Budget in 30 minutes a month!"  At the time, I was fairly new to YNAB and that seemed overly optimistic.  However, a decade later I really am budgeting in considerably less than 30 minutes a month (excluding time spent during the month tracking transactions, but probably including time spent adjusting budget categories mid-month.) 

YNAB delivered on that promise, once I had enough experience budgeting and my priorities became fairly stable.  But I couldn't do it if I had to budget 4 times a month, as I receive money.  Fortunately, under-featured previous versions of YNAB taught me how to devise workarounds to budget as needed in the absence of program support.  To some extent, nYNAB feels like YNAB 3; there's a stuff I wish the program would do, but I can work around it to make up for the lack.  Except the lack in YNAB 3 was because some useful features hadn't been created yet, and in nYNAB it's because they were deliberately disabled.

JoeDid 

Personally, I don't see this as a "luxury" but as an absolute "necessity", and I think I was predisposed to fall in love with YNAB because of this concept.  My finances were sick, and the prescription was a little more planning/breathing room.  It had such a profound and positive impact on my financial well-being that I was very dismayed when YNAB chose to let it drop in their web version roll out. I just cannot go back to the chaos and stress that was paycheque-to-paycheque spending and planning, or being financially sick again.

HappyDance Well, maybe you don't see it as a luxury because you "are there." When one is "on the other side" but hoping to get there, it can't be a necessity, which is defined as something that's required, or indispensable. Once I attain it, I hope to keep it as a necessity. I've already felt a significant impact on my financial situation, but I'm not there yet.

JoeDid There are a couple bookkeeping tricks that often will put someone over the top: reallocation from an emergency fund or category with an outflow well in the future. Also intentionally riding the CC float.

All of these are easily and quickly reverted if needed. Until such time, though, the increased clarity from budgeting ahead is amazing.

dakinemaui Thank you! There are some things here I can think about!

I only recently started riding the CC float, but I keep seeing all those green 'available' numbers and I'm always tempted to pay 'em off right away! Old habits are kicking and screaming to survive...

JoeDid On the forum, riding the float has a different meaning than I think you intended.  If you are able to pay your cards in full at any given time (as evidenced by the card payment categories being in sync with the card balances), you're not riding the float by forum definition. 

If you are simply paying the statement balance on the due date and collecting interest on dollars that are in your custody until the day you're required to return those dollars to their rightful owners, that's not float as the forum defines it.  That's float as I traditionally understood it, earning interest on money I've spent but do not yet need to remit.  My understanding got me into some confusing discussions with other forum members until I figured out our definitions of "float" weren't the same and we were talking past each other.

I highly recommend earning interest on those funds for as long as practical.  It might not be much money, but it's money that requires almost zero effort to get.

Patzer Thanks for the confirmation. I don't know how many times I'll need to beat it into my brain that what I'm doing is not bad, but is, in fact wise. Even now, as three or four "pay the statement balance by due date" dates approach, I'm still thinking "but I should pay the current balance!" (I don't need to: I have ample room on all those cards for additional charges, all of which would be covered by my budget.)

It's just that I'm o-o-old, and seeing a CC balance makes me antsy. I will force myself to accept this definition of riding the float by renaming it "working with the float to maximize my cash."

Patzer My definition of riding the float is that one is not able to pay the bill upon receipt but can by the due date. No discrepancy between YNAB and IRL.

JoeDid On a card with paid in full status in YNAB, the Payment category equals the account balance when you get the bill. By the time you pay the bill however category has grown to roughly twice as high, assuming consistent use ($X per month). Intentionally riding the float means reallocating that amount $X -- or less -- that you can consistently put on the card to elsewhere into the budget. The category is zero (at minimum) when you receive the bill but budgeted purchases will sufficiently raise it by the time the due date arrives. I repeat, you must continue to make budgeted purchases on the card to enable the payment.

For the purpose of getting ahead, "elsewhere" means to regular categories with outflow later this month so your income can be budgeted entirely into next month's area.

Over time you can reduce the float by budgeting to the CC Payment category, all the while budgeting in month-sized chunks. Contrast this to what you are no doubt doing now: gradually budgeting increasingly ahead to spending categories but still piecemeal with every income event.

And to touch in Patzer 's comment about interest, this is strictly a bookkeeping exercise. You still have the cash in your account earning the same interest as it normally would.

TBH, the best option is to reallocate from an EF (or similar) and then gradually re-grow that. However, riding the CC float is easily managed with the guidance of YNAB.

JoeDid 

Alas, the elimination of Live on Last Month's Income as a rule mars the classic statement of why to pay the statement balance in full on the due date, and no earlier:

Paying this month's expenses with next month's income is a fool's game.  But I'm very happy paying this month's expenses next month, using money I received last month, and getting 2% cash back the month after next.

JoeDid I will admit it took me a little time with getting comfortable with just paying the statement balance when it was due but now it’s old hat. The automation and never worrying about it has been great.

Superbone dakinemaui  Patzer et al: Thanks for the feedback. Giving up smoking back in '66 was easier than letting go of the urge to 'pay it off! pay it now!! all of it' but I will succeed!

JoeDid 

I started easing into paying only the statement balance and only on the due date at the beginning of 2019. All the purchases are budgeted for, and the entire amount to pay the balance is available in my account.  It still makes me quite uncomfortable to see this:

At the end of May, I couldn't stand it anymore and paid off the balance which had grown to 1.5 x my monthly take-home due to some bigger than usual expenses and timing on purchasing being shortly after a statement cut-off.  I am not yet comfortable seeing a debt total with a comma in it left unattended at the end of a month. Working on it. 

HappyDance This might end up being my ultimate approach: A periodic 'flush' of the balances on my CCs, for my sense of well-being. Thank you for enabling me. 😉

HappyDance  Get a mortgage and enter it as an off-budget account. Then the credit card debt in the Net Worth report will be negligible. :)

HappyDance you made me feel better :). Maybe I’ll set a date to start easing in, as you put it, and see if the increase in interest helps mitigate my propensity to start vomiting when I see a similar chart. 

Annieland There's a month lag during which you earn interest on the money you haven't yet sent the CC. If you normally put $3k on the card every month, your average bank balance is about 1.5k higher than if you pay on the closing date. (Even more if your spending is skewered to be earlier in the period.)

It's enough to buy a burger at least. Plus I enjoy the "payback"aspect relative to how much I gave the CC when I was young and foolish.

Realistically, I think the real benefit is the payment can be automated, reducing the chance of error.

Annieland As dakinemaui notes, there is a benefit to automating the payment so the due date is not missed.  I have not yet done that, but I have set up e-bills that let me do a one-click scheduling of paying the statement balance on the due date.

As to the earnings . . . suppose I don't charge as much as the previous example.  Suppose my average monthly charges are $1,000.  My card closes on the 3rd of the month, with the due date on the 1st.  In a 30 day month, paying on the closing date is paying 27 days before I have to.  Looking at Fidelity right now, I'm earning 2.01% on money that's sitting in the account I use for checking.  $1000 * 2.01% * (27/365) = $1.49 of earnings I would give up by paying as soon as I'm billed instead of as late as I'm allowed. 

That's not a lot of money; but it's money that takes zero effort to get.

Patzer And of course that's looking at one month. Per year that's an Andrew Jackson.

nolesrule If I add up all my cards and use my real monthly billing instead of a nice even $1000, it's closer to a U. S. Grant every year. But still .  .  .

Today I got an ebill from Discover.  The due date is a Sunday.  Fidelity can push a payment on the previous Friday, but Discover says it can pull the payment on Saturday.  It's not a huge bill, and 2 days' interest works out to about a half cent, meaning a 50/50 chance that I get another penny.  But if the timing works, and my other cards can do that as well, I could be convinced to go with pull instead of push payments.  Because I'm cheap, and I want those few cents for other budget categories.

Annieland It’s simple math. The longer you hold on to your money, the more interest you can make in return. I love to take full advantage of the credit card companies after they took advantage of me so many years ago. I don’t even have to think about it other than making sure I have enough funds in my checking account on the due date. It’s all automatic.

Annieland It's absolutely your choice, but I have balances on that many CCs too, and setting each to just pay the statement balance on the due date is fine. I also love my credit unions but I keep most of my budget's cash in an Ally savings account. I do tend to log in and check that the payments have come out on their due dates, I have to say.

bevocat yeah, I restarted my use of my Ally account once I finally got an emergency fund plan going. I’ve always used a capitalone 360 account for my property tax self-escrow and really wish they paid more than 1% because it’s convenient to have money in there when I also have to transfer money to my kids with all their savings and “money cards.”  But I just inherited a house where I will also have to start escrowing for HUGE property taxes, and am sitting here with my first rent check wondering if it should go to capitalone or Ally. I guess the answer is clear 🤪