Hi! I am starting with YNAB in November. I already entered amounts and set up categories for November, but of course I am in the red for my "to be budgeted" because I haven't been paid yet. As the month proceeds and I get more comfortable with the tool and the method, is it best to use the "move money tool" or to adjust my budget since this is the first month?
Hi! Welcome to using YNAB!
You might check out one of the getting started classes at youneedabudget.com/learn . They'll explain in more detail what I'm going to explain briefly.
With YNAB, you budget only what you have. It's a 21st century version of the age-old envelope budget, which predates bank accounts and electronic forms of spending. In an enevelope budget, you'd put all your physical cash into physical envelopes based on what you needed it to do. Then as you spent, you'd take the physical cash out of the envelope to pay and what was left would be what you'd have left for next time. Need to pay your $40 rent? You'd set $10 aside from your $25/week paycheck. The next week, you'd add $10 more, and so on. If you needed more in one envelope you'd have to take from another envelope, and at no time could you allocate more money than you had, because you would literally run out of physical cash.
So. All that said. Go back to November, and reduce your budgeted categories until TBB is a green $0. At that time, you will have allocated all the money you have currently, and no more. It will definitely be the case that you won't be able to fund all your categories fully right now; that's okay. Focus on what your money needs to do until you get paid again, keeping in mind that some big expenses, like housing, might need to be budgeted for in chunks. Then, during November, you'll add to your budget as you are paid, and you'll adjust your categories by moving money where you need it, just like you would if you had paper envelopes.
HI All! I just wanted to chime in to say I've done the same thing- set everything up for a (hopefully successful!) November. Good luck. I think this forum is a great idea, too. :)
I was happy to read this Q&A because I was struggling a bit with the concept, too. Though I have heard of the envelope method so that helped. I've been lucky enough that ages ago when I first started to have bills, I was able to set it up 1 month in advance, and I've been paying bills that way ever since. Mind you I'm still overspending, but my bills for November were covered by my October paychecks. So I had the money, but I was confused on how to set it up. I placed everything in on October (not realizing it) and then did a fresh start to get everything in November. Which leads me to...
Do budgeted amounts pull over from month to month? Things like my mortgage aren't going to change.
Good luck everyone!