Is it this hard for everyone at the beginning?
I'm on my first month, and I've become obsessed. I started this not because we have debt (we only have one car payment, no revolving balances on CC) but because we were getting to the point of sweating it out the last few days before payday. (we do have a healthy "when crap goes wrong" fund) I want to break that cycle, and maybe not have to use the when crap goes wrong fund for smaller punches.
I thought I had this all under control. Today was payday! Yippee! I came into this with CC balances, because nothing lines up on the same days) but nothing revolving. But of course, by the time I pay them in full, there are already charges on the card. Am I right in feeling like the first month you basically have to pay 2 months at once in order for the system to work correctly? I use the cards for all my monthly bills.
And once the transactions are entered, does YNAB automatically move the money from the correct categories to the CC?
And cash? Talk about confusing! I withdrew 600 from one account, but deposited 550 in the other account and kept $50. I still haven't gotten that one fixed. Somehow I'm off in my cash budget! LOL Oh, and I withdrew cashback on my debit card...yeah, split the transactions, still a mess.
I've watch of the videos, I'll go back again on the bearded dude. However, I'll take any tips.
It is a learning experience and an adjustment to how you think about money at first but if you keep at it, it will click. I promise. It just takes a little time.
I'll try to answer your CC question. No, the first month shouldn't behave any different than other months except for getting your CC payment balance correct initially. Your payment amount available should always match your account balance but in the opposite direction. For example, if your CC balance is -$1000, your payment available for that card should be +$1000. You'll need to straighten that out if that isn't true for all your cards by moving money around. (Rule 3)
I also have PIF CCs and almost always have a balance on the cards. I have automatic payments set up to pay the statement balance in full each month. Of course, due to the grace period, you will always have between 1 and 2 months worth of purchase on your cards but you will have the cash in your accounts to make a full balance payment at all times.
And yes, YNAB should automatically move the money to the CC payment available for all purchases entered into YNAB. You do have to periodically check that the payment balance matches your CC balance (in the opposite direction) as there are a few cases where they can get out of alignment and you'll have to fix it. These are usually outliers so I wouldn't worry about that too much.
Stick with it! It does take time and a number of paycheques. Why? Because we are all used to living paycheque - paycheque and never have money lying around for future bills. And our credit cards? We rarely have money sitting in our accounts before they are due ready to pay them. We are usually shuffling money around from different accounts to cover them, and that's only the statement, not the recent transactions. Am I right? Are you feeling this way? That was me 3 months ago.
Fast forward to today...All my bills are paid for October and I have money sitting in the categories for the rest of the October bills. I am working on getting a month ahead, so when I click into November, I now have some bills with green lights waiting to be paid. I don't look at my chequing account balance anymore, only my categories.
For my credit cards, they are paid in full, usually paid every week or less now. I am using them for points, not them using me for interest! When I want to buy something, I have money in that category. When I use my CC, the money is moved to the payment category. Then I will pay them.
This will work for you! You just need some time and money to get ahead. How can you get ahead? Look really closely at your spending!! I'm on a spending freeze and honestly, I'm very happy. I am buying groceries but watching my budget, gas but checking prices, and then limits on everything else. No takeout. Minimal eating out. And some money for me to get my nails done (but making them last longer for once a month vs 3 weeks). Purge your house of stuff you don't need. Sell stuff. Embrace what you have & love it. Shop your closet. We all have tooooo much stuff and our consumerism has gotten most of us into debt. Debt is stuff we have already bought in the past and that debt is keeping us from choosing how we spend our money today & in the future.
Keep at it & watch the videos, listen to the podcasts, read the forums. YNAB becomes highly contagious in a good way. Every one is a cheerleader for the next to help them succeed. You've got this! 😄
Am I right in feeling like the first month you basically have to pay 2 months at once in order for the system to work correctly?
You do essentially *budget* for two months at once, yes. You budget for everything owed, which, as you point out, is both everything on your statement and also everything you’ve spent since the statement. For some people, this is an eye-opener as they realize how little cash they have that is not actually already reserved for paying the card back.
It sounds like you aren’t actually on the float, which is when you don’t have enough money left to budget for your categories after you’ve budgeted correctly for the credit card, but yes for most people that first month’s budget is very surprising.
Thanks everyone. To add to my challenge, our budget has had some recent drastic changes. Our last 2 went off to college, and since we have money for their college already set aside, many things in our budget are much less. Groceries, fuel, electric, water (WOW, teenagers use a lot of water!) This is the first month our budget is reflecting the savings. Plus we have been in cut spending mode for a while now, and trying to stay that way so we can go visit said kiddos at college. LOL
We were on the credit card float when we started YNAB where we could afford to pay off the statement balance when the statement came due but we couldn't have afforded to pay all that was on the cards. It took me a few months and then realizing that I'd rather use part of our emergency funds to get those paid off asap. Same with getting buffered. We used our tax refund, a hefty gift, and again, some money from other deferred expenses to get one month buffered. But feeling YNAB broke was huge until we were buffered. Now I know right now I have $x to budget in November. I now have plumper categories. We're budgeting our true expenses. I have a snowball to add to lesser important categories like the lawyer to do our medical powers of attorney and a trust. Getting buffered was a game changer for us.
I realize I may be still in old budget mode. I have a couple of busy weeks coming up. I don't want to fall behind. Can I go ahead and fill in next months known budget categories, or do I really have to have to money in the account to plan ahead? I won't be spending in those categories until the money is there.
Hang in there... I started in September... and I'll tell you I reset my whole budget 3 times that first few weeks as I was learning it. It was kind of nice to have the option to do that in YNAB, to just "start over" by zeroing out all my balances, but leave all my account connections. I have watched a lot of videos, and the "Mapped out Money" YouTube channel is great. Nick True's YNAB videos are some of the best walkthroughs on YNAB I've seen.. check those out.. they make things much easier to understand.
I'm starting month 3 now, and just starting to feel like I'm settling into a routine... I feel a little obsessed with it, checking daily, matching transactions, etc.. but it's good. That's what I wanted it to do for me.
When I'm not sure how to do something... I just enter the transaction a few different ways and see what it's done to my budget... if it didn't work as expected, the "undo" button is awesome! :) Then try again.. many things have been trial and error but I'm good with that. It helps me learn how it works so I know for the next time.
If things really feel out of whack for you at the beginning, and you are close to a beginning of a month, don't be afraid to reset everything to zero, and start from where you are at. It'll keep your categories and everything, so it's not a chore to start over if you need to.
Yes. It took a long time to click for me. And longer still to stabilize my categories. I've used "fresh start" many times, so I don't have much in the way of reports. I'm OK with that.
This was one of the most helpful docs for me in the beginning: https://docs.youneedabudget.com/article/915-budget-template
Manual entry has been better for me for my active accounts. For accounts I almost never use, I have them linked.