Budgeting when there is no income

Hi, I am currently not working (my choice, practicing early semi-retirement), so there will not be any income to my budget. However, I plan to live on my savings which already exist in my budget and budgeted to the imaginative category of 'Savings'. I have been saving for just this day for many years. I want to test living on a particular amount per month and I am wondering the best way to this. I want to allow myself so much 'budget' and live towards it.

So far the best way I can think of is to create a new category called 'Monthly Allowance' and to move my target living amount to it from 'Savings'.

Now when I budget for the month and need to get TBB from Red to Green I would only move money from 'Monthly Allowance' and once it has gone it has gone.

If I needed more in any month I would move it from 'Savings' as a last resort.

Is there a better way, I'd love to hear of any suggestions.

Another challenge I have is how to know how much I have budgeted for the month; the only way so far is the record the amount in the 'Savings' category at the start of the month then deduct from the amount remaining at the end of the month - the difference is the amount I have budgeted to the other categories.

I have thought about moving my Savings into tracking accounts which would enable me to move money into TBB as an income but my Savings are in many accounts so this seems complicated, but doable.

I am sure there is an easy way to achieve what I need.

Thank you for your help. 

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  • If you know you want to live on $2000 per month, just move $2000 from the Savings category to TBB at the beginning of the month and allocate it like you would normal income.

    Like 2
      • iwaddo
      • iwaddo77
      • 1 yr ago
      • Reported - view

      jenmas yes, that is much simpler, thank you.

      Any idea how to see the total I’ve budgeted in the month though, especially if I had more to TBB at a later stage.

      Thank you for your help 

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    • iwaddo 

      Total Budgeted in the header will be offset by whatever you release from the Salary/Savings category. Just mentally add it back in.

      If you later get new money, feel free to budget it back to the Salary category for later use (assuming you wish to maintain the same budget values in the rest of your budget). Total Budgeted and the revised Salary Budgeted still add to $2k.

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      • iwaddo
      • iwaddo77
      • 1 yr ago
      • Reported - view

      dakinemaui Hi, I am not sure how this works. If I move £2,000 from Savings to TBB I get '+£2,000 Budgeted in August'.

      If I then allocate the £2,000 to budget categories the 'Budgeted in August' figure ends up at -£0.00.

      I am sure I am making this much harder than it needs to be, thank you for helping.

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      • Moohouse
      • Software developer
      • Moohouse
      • 1 yr ago
      • Reported - view

      iwaddo Your Savings budget category will stay at -2,000 for August, showing just how much you moved out from Savings - and your 'income' total, given that you don't have any other income in August. If you do, then you'll need to keep track of this sum by yourself as YNAB won't show the total combined number anywhere.

      Savings budget * -1 + any income same month = your total monthly 'income'.

      Say your savings budget ends up at -2,000 and you earn 50. If you then wanted to stick to your 2,000 budget you could move those 50 back into savings, or you could let your monthly budget stay at 2,050.

      -2,000 * -1 + 50 = 2,050

      If your income some month is higher than you need, then just budget the rest into savings.

      Say your income some month is £3,500. You then budget £2,000 and put £1,500 into savings. Savings budget column will then be positive, offsetting the total income.

      1,500 * -1 + 3,500 = 2,000

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    • iwaddo The release of money affects the Budgeted In (BI) total, but you're really after the amount budgeted to all other categories -- the normal ones (everything except the Salary category).

      Whenever TBB = £0, the amount budgeted to the normal categories is the sum of what you released from the Salary holding category and what is shown in BI.

      Assuming you want to live on £2000, at the beginning of the month you would release £2000 with a negative budget entry (-£2000) and budget TBB to £0. Consequently, BI = £0. The Release+BI total = what's in your normal categories = £2000 (as planned).

      Now let's say you later receive £500 of income, but you still want to live on £2000 that month (avoiding lifestyle creep). You would therefore add/budget that £500 to the Salary category. (Putting it in normal categories would be lifestyle creep.) Combined with the original -£2000 entry, the amount in the budget column of that category = the negative of the new released amount = -£1500. The BI in the header is £500. Therefore, the Release+BI total = what's in your normal categories = £2000 (still).

      Now, back up and say you budgeted that £500 to Vacation instead of Salary. In that case, the Released amount remains at £2000 (the negative of the budget entry), and BI = £500. Their sum = what's in your normal categories = £2500.

      Like 1
  • I would set up the account with the savings as a tracking account. Then I would physically transfer money to an operating bank account that is a budget account. When you transfer money from a tracking account to a budget account, you have to categorize the funds. You can categorize the monthly transfer as TBB as if its income, and then budget as normal. 

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    • If you're not comfortable with releasing funds from a category, this dedicated Salary *account* approach is perhaps a better fit.

      Be aware though, that if you receive real income later in the month, you would need to get it into the dedicated Salary account -- both in the real world and in YNAB. That may be more complicated than you care to deal with if it arrives in a budget account first.

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  • dakinemaui Moohouse MXMOM

    Thank you these are all good ideas. 

    MXMOM I had been playing with moving funds off budget then back again to generate a transaction that YNAB would see as income,  I can do this in YNAB without actually moving any money at the bank.

    I will have a further play as I do my August budget, the first without any real income.

    Thank you for your help

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    • iwaddo I wouldn't move money off budget only in YNAB because you want your account balances in YNAB to be accurate (match the real world).

      One alternate approach is transaction-based: use a net £0 split transaction to outflow £2000 from Salary and inflow £2000 to TBB each month. The problem is this skews reports, and you would have to edit the transaction in order to avoid lifestyle creep if you received real income later in the month.

      I used the budget-based approach I previously described when I was laid off. It works far easier than it sounds.

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      • iwaddo
      • iwaddo77
      • 1 yr ago
      • Reported - view

      dakinemaui 

      Hi, I did use 2 transactions, albeit not a split, to move this money out to a tracking account and back in as income to keep the account balances correct, but as you say this messes with the reporting.

      I have been through your budget based approach again and can see how it will work, I plan to give it a try from August.

      I wanted a record of how much I have budgeted for the month and I have decided to also try the following.

      • Create a new category called 'Monthly Budget'
      • Create a split zero value transaction in my cash account to move £2,000 from 'Savings' to 'Monthly Budget'

      This has given me my £2,000 to budget for the month and this creates a record of how much of my 'Savings' I have allocated for the month.

      If I run out of budget, I can simply either

      • Amend the original split to increase the amount moved, or
      • Add more rows to the original split to show that I moved £,2000 then another £500, or
      • Better still add a new zero value split to my cash account to move another £500 as this will also give me a dated audit of when I moved the extra £500

      If I want to see how much I moved between 'Savings' and 'Monthly Budget' I can simply search for - Payee: Monthly Budget, Outflow: >=0, and this shows me the transactions.

      I have now also just created another new category called 'Monthly Budget Saved' and at the end of the month if I have not spent all my £2,000 budget I can move the surplus into 'Monthly Budget Saved' to accumulate over time.

      It all sounds a little convoluted but I think I am going to have fun trying and if it fails miserably I could resort to a calculator with pen and paper or export my budget to Excel and do some math.

      Thank you very much for your help

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