How do I set goals in accordance with my expected income?

I'm really struggling to understand the thinking behind YNAB so I can figure out how to use it.  I'm still not sure it's going to be a useful tool for what I want to do, which is simply:

First, plan how much money of my month income to spend on different categories.  Second, track how much I am actually spending, so that I can avoid overspending on any particular category.

That's what a "budget" means to me.  However, I'm beginning to realize that's not necessarily what it means in YNAB.  And I'm not sure YNAB is able to do it.

It seems like the "plan" that I want is contained in YNAB "goals".  But there's no way to see an aggregate of goals.  I can set a goal for each individual category, but I can't add up all the goals or see them without clicking on each individual category.  How does that make sense?

Any help would be greatly appreciated!

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  • Goals are truly secondary to the budget, despite what the support materials say. There's this whole idea of a "budget template" these days and I'm sure somebody will link to it, but my personal opinion is that it's not actually all that helpful, especially when you need to get away from the "This is how much I will make/ This is how much I will spend" kind of budget mindset. 

    Budget the money you have now to the things you need to deal with now, being mindful that one of the things you need to deal with now is planning for expenses coming at you in the far future. In the beginning, you will use Rule 3 a lot as you discover your priorities and/or your actual spending are not what you were expecting they would be. That's absolutely fine. This will help you begin using YNAB the way it's intended, and the way that causes so many of us to have such good financial success. 

    Like 2
      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      WordTenor I don't understand your answer at all.  I never said I need to get away from the "This is how much I will make/This is how much I  will spend" mindset.  In fact, I think in my question I said that's pretty much exactly what I'm trying to do.

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      • WordTenor
      • Not discriminating between the sinners and the saints.
      • WordTenor
      • 2 wk ago
      • 2
      • Reported - view

      Duncan The YNAB method is meant to step you away from the "this is how much I make/This is how much I will spend" mindset. The budget is a plan for the money you have, not money you'll get in the future. Of course you need to have some sense of what you might expect in the future, but YNAB is not meant to be a "I will get a paycheck of $5,000 so I will budget $400 to eating out." If you don't have $400 you can safely set aside for eating out right now, then you can't budget $400. 

      Like 2
    • WordTenor Duncan  I haven't read all replies yet. Maybe some say the same.

      I met the same problem when starting. Because even while I was willing to  adopt the YNAB rules, I wanted to know as well whether I could afford my lifestyle; next upcoming bill is a subscribtion so I better put enough money in that category, only if (in the total picture of monthly bills and true expenses) I can't afford that subscribtion I had better cancel it! How to find out?

      A budget template did help me a lot there! Make goals for every expense I could come up with, go to next month and look at the underfunded amount in the right collumn: if on average I have that much money to spend each month I'm alright!

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    • Powder Blue Pony Do note that next month's Underfunded will be inflated if you haven't made this month's contributions toward time-bound goals.

      Like 1
  • Bringing goals back into the picture: once you know  that, say, you need to plan for $1000 for Christmas, you can set a goal to ask for $1000 by December.  But goals are intended to help you allocate money; they're not really for helping you do a traditional style budget. 

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  • Let's take a specific example.  I know I have a car payment of $593 that I will have to pay every month.  I want to identify that as something that I know I will have to pay.  And then I want the tool to help me keep track of when I've paid it.  I know how much money I make every month, so I also want the tool to help me keep track of how much I will have left over after I've planned for the car payments (and all the other obligations and priorities)  so I know how much I can spend on beer.  How do I do that?

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      • WordTenor
      • Not discriminating between the sinners and the saints.
      • WordTenor
      • 2 wk ago
      • 1
      • Reported - view

      Duncan You can set monthly funding goal of $593, and you'll get a yellow alert any time that category has less than $593 budgeted to it. But you can't budget that $593 until it's actually in your accounts. THat's the difference between YNAB and a traditional "plan for income" budget. 

      Have you done any of the webinars and looked at training materials yet? They are crucial, and very helpful. 

      Like 1
      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      WordTenor I have looked at some of the guides.  I have not done the webinars.  I did try to search the support to try to find an answer to this question before posting it, but was not successful.  

      So far I have not received an answer to the question: How do I plan to divide up my expected income (or, let's assume I wait to do it until my paycheck actually arrives, so now it's available income) to account for my expected expenses.  I think the answer I'm getting is: you can't do that.  Which is really unfortunate, I'm starting to think this tool really is not going to help.  

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    • Hey Duncan ! Rule One of the YNAB Method is the foundation of your budget—Give Every Dollar A Job. You'll work only with the money you have on hand, and it's key to why the YNAB Method is so powerful.

      I know it's a bit of a switch from saying, "I have $X income this month—that's my budget". But I hope you'll give our way a try during the trial.

      You'll find the budget template helpful here. It uses the goals and scheduled transactions Superbone mentioned above, to help you achieve this. If you want to dive in deeper, check out Create a Budget Template in our Starting Your YNAB Budget video course.

      To check the goal total, flip forward to a future month. With no categories selected the Underfunded amount is the sum of the goals you've set. Then compare that number to your expected income!

      Like 1
  • Pink Boa said:
    First, plan how much money of my month income to spend on different categories.  Second, track how much I am actually spending, so that I can avoid overspending on any particular category.

    This is exactly what YNAB will do for you. Embrace the method. Study the first three rules. It will change your life. Goals are relatively new to YNAB and are just an enhancement to the method.

    The main difference between traditional budgets and YNAB is that you only budget funds you have right now. You budget a paycheck at a time until you've gotten a month ahead. You don't budget a month at a time unless you have the funds to do that.

    Like 1
      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      Superbone I don't see that.  Am I missing it?  Where is it displayed?  I see "Total Budgeted", "Total Activity", "Total Available", and "Total Inflows".  I don't see "Total Monthly Goals"

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Duncan It's directly below that on my screen. Have you created any goals for the month yet? It might be dynamic.

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      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      Superbone Yes, I created a goal for every category. 

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Duncan Have you funded them?

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      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      Superbone What does that mean?

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Duncan It means you moved funds from To Be Budgeted into the categories. The Underfunded quick budget item on the right will fill all of them for the month if nothing is selected or you can fill them individually by selecting which categories you want to fund.

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      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      Superbone Yes.  I entered a "goal" amount for each category, then I clicked on the "underfunded" button to allocate funds from the "to be budgeted" total.  

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      • satcook
      • satcook
      • 2 wk ago
      • 1
      • Reported - view

      Duncan since all your goals are funded for the month, this month will show $0

       

      click to June and look at the total underfunded number. That is the total of your goals

      Like 1
    • Superbone Total Monthly Goals is a Toolkit thing! 😁

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • 3
      • Reported - view

      Matthew Aha! Thanks. I had no idea. It's so seamlessly integrated. Seems like it should be a real thing. 🙂

      Like 3
    • Matthew But moving a month ahead and looking at the underfunded does the same!

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • 1
      • Reported - view

      Powder Blue Pony That's actually an even better number because it includes pending scheduled transactions as well.

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      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      Powder Blue Pony Yes, a couple of folks mentioned that, and bottom line: that's the answer to my question.  (Another way is the browser extension tools (which I really don't want to mess with).   But it does seem very awkward.  A couple of folks have mentioned that "goals" are a new addition.  

      It would seem to be a very useful feature to simply show the "Total Goals" along with the other totals.

      Like
  • I'm not sure what you mean by "until you've gotten a month ahead".  I have about $100K in liquid funds, and that's not counting retirement funds, real estate equity, etc., so I think I'm "a month ahead".   But I'm not sure what that has to do with my question.  I don't want to plan to spend that $100K on my monthly car payment.  Rather, I want to pay the car loan out of my paycheck, and not spend so much on beer that I have to start withdrawing funds from my investment accounts.  

    Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • 3
      • Reported - view

      Duncan Then you're good to go. Put all your liquid savings accounts into your budget. Budget a month’s worth of income into your monthly categories and true expenses (Rule 2). Budget the rest into long term savings such as Income Replacement, Home Maintenance, Car Maintenance, Car Replacement, Property Taxes, etc.

      When you get income, create an Income for Next Month category (one time) and store it there. After all income has come in for the month, release it to To Be Budgeted and budget all of next month.

      This will allow you to budget a month at time and do exactly what you wanted to be able to do.

      Like 3
      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      Superbone How does that answer my question?  Not helpful.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • 1
      • Reported - view

      Duncan Sorry, I'm adding to it. That was the short answer. Hold on for edit. OK, look above. I hope that helps. Goals and scheduled recurring transactions will help you easily budget a month at time. It can be done with a single click followed by any adjustments you might want to make that month.

      Like 1
  • Are you paid once per month or do you have multiple income arrivals?

    Allocating money to categories IS establishing the plan. The subtle difference is it's making a plan for money you can actually spend right now, rather than what you expect to receive.

    You do consider expected income when making plans for what you have. For example, assume fully funding the $1200 car insurance bill that's due in 6 months is possible out of what you just received, but doing so obviously leaves less available for other spending now. If you believe your income will be consistent, a better option is to fund $200 from what you have now -- allowing $1000 to be put toward other things now.

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  • OK, I'm getting a lot of answers that aren't really helping.  Let me make my question much simpler and more direct:  How can I see the total of all the "goals" I have set?  Also, it would be nice to see all the goals on one page, rather than having to click on each category to see the goal for that category - is that possible?

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Duncan Best of luck! I put a lot of effort into my responses to you. Sorry they didn't register with you. Read the materials. Take a class. I am doing very well thanks to YNAB and owe a lot to the system. My advice to you would be to bend your mind a little to its method instead of trying to make it fit your preconceived ideas.

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      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • 1
      • Reported - view

      Superbone Thanks, I do appreciate the effort.  I'll follow up with some of the training.

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

      Duncan No worries. It sounds like you're already doing really well. YNAB may be able to take you even further. It can't hurt to give it a shot. I don't know of a better way to optimize ones finances.

      Like 2
  • Duncan said:
    I know I have a car payment of $593 that I will have to pay every month

    You should make categories for everything you want to spend money on at some point, including car payment and beer. Assuming you are paid monthly for what follows...

    When you get a paycheck, all of it is shown in the To Be Budgeted value (TBB) at the top. Consider which category is most important to increase now. Assuming the car payment is more important, allocate enough to cover that bill. Consider what of the remaining things is most important to fund now and fund it, reducing TBB. Etc. At some point, either beer will be the most important thing left (and gets funded) or TBB will be $0.

    If the latter, then you simply cannot afford beer AND all the previously allocated (planned) spending/saving. You either do without beer OR you adjust the plan for something else that was already funded.

    The Goals in YNAB are just to remind you what things cost and fill in budget entries quickly. It is the priority examination, actual allocation, and staying within the constraint of what you can spend now that is the important part.

    Like 1
  • Are you on the desktop version of the program? If you’re using that you can check the boxes for every category you want to fund, and on the side they will be in underfunded amount. This is the amount you have yet to budget toward your goals. Which if you havent budgeted to anything, it would be the total of your goals amount

    Like 1
  • Check out nick true YouTube video on goals 

    https://m.youtube.com/watch?v=1jpv4WJRmzQ

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  • Duncan said:
    I have about $100K in liquid funds, [...] But I'm not sure what that has to do with my question

    Because it will allow you to plan in month-sized chunks. If all of this month is already covered from startup capital, then you can apply all of this months income (regardless of when during the month it arrives) to next months plan/budget.

    How much of that startup money is needed to allow that to happen depends on your expense and income timing. Expenses incurred before you are paid obviously need to be funded out of startup money. Using some of it to cover expenses between your payday and the end of the month aligns the planning process with the expense recurrence cycle and the calendar boundaries. If you are paid on the last day of the month, there's zero startup capital required to do that. Being paid earlier may require more. 

    The bottom line is things are much easier if you can budget (plan) in month-sized chunks. Given your startup capital, that will likely not be a problem.

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  • The question you wanna ask when budgeting with YNAB is “what does the money that I have now need to do before I get paid again?”. Think of it as envelope budgeting where was the money in your envelope (categories) runs out, that’s all you have.


    By setting goals for each category especially for monthly bills, do you know how much more do you need to put in that category to meet that goal each month. say I have a bill that’s $200, but I can only cover $100 this paycheck. It will be yellow until I am able to put the extra $100 in it then that goal will turn green, and my category has enough money in it to pay that bill. 

    Like 2
  • Getting started in YNAB 

    https://m.youtube.com/watch?v=xPVEB759gkU

    Like 1
  • Duncan this recording of a YNAB workshop should answer a lot of your questions: https://www.youtube.com/watch?v=C9JJY9gIVOw

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  • If you are trying to make the way you budget work in YNAB, YNAB software is not for you. If you want to try using YNAB's budgeting method to improve your financial life, then you need to use YNAB's budget method, which is what the software is designed to support.

    There are a lot of us who were doing well before using YNAB, but are doing even better because we use it. Don't be afraid of trying something new and different.

    Like 2
  • Just my two cents.

    I have an excel spreadsheet with the majority of my categories. In the spreadsheet is where I do a more traditional budget with my regularly expected income. This helps me figure out how I will allocate my money before I go into YNAB at the beginning of the month. I am the aware the goals feature could probably accomplish the same thing but I found them to be too clunky. 
    I don’t include any variable money in this plan - tax refunds, cash gifts, interest payments, annual bonus. Those I just budget into categories that I feel are my top priorities at the time I receive it. 
    This method has served me well since I joined YNABin September. And I have had a couple things happen recently (20% pay reduction) that this method has allowed me to make a plan before It was time to budget the money.

    For me this method allows me to plan ahead but adhere to budgeting only money I have and rolling with the punches. I don’t reconcile anything back to my spreadsheet based on what actually happened that month. But I do use YNAB to help inform if I should consider making any adjustments to the excel budget category amounts.

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  • When figuring out the nominal values to budget when money arrives (e.g., the Goal amounts), most people try to constrain the total to within the monthly expected income. Unfortunately, this complicates things when you are not paid once per month. As such, I find it easier to use Rule 2 on a paycheck basis to budget a consistent portion toward all categories.

    Indeed, you already know you are living within your means since you stop budgeting when TBB is $0 (assuming any overspending is covered, of course).

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  • Thanks, everyone, for all the help and useful suggestions.  The level of support is fantastic!

    Bottom line: the answer to my question is yes, YNAB can do what I want.  Plan by entering goals.  To see total goals, go to a future month and check the "Total Underfunded".  

    p.s. I will say that's not the best user interface.  Adding "Total Goals" to the right side of the screen, along with all the other totals, seems like an obvious improvement.

    Like 2
    • Duncan said:
      To see total goals, go to a future month and check the "Total Underfunded".  

      I'll repeat here that next month's Underfunded value will be inflated when you have not funded time-bound goals in the current month. For a more accurate estimate in such cases, you can actually click the Underfunded button to populate that future month, override the budget entries for those categories, and just look at the Budgeted header value. (Delete all budget entries when finished.)

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      • Duncan
      • OK, maybe I will drink the kool-aid...
      • Pink_Boa.9
      • 2 wk ago
      • Reported - view

      dakinemaui ewww...   Good point.  Just one more reason that YNAB *really* needs to add a "Total Goals" to make this work right.  Seems like a fundamental need to be able to set goals in accordance with expected income, which implies a need to see Total Goals.

       Yes, yes, I know Rule 1 - don't worry, I'm going to drink the kool-aid.  But still...

      Like
    • Duncan I hesitate to bring this up (as it's a non-standard workflow), but given we're pretty deep in the thread, you're probably the only one who cares.

      I use next month's area to store my budget template / nominal values instead of goals. The total required by the template is easily seen in the Budgeted header. Because I don't use goals, I don't get nagged for editing my budget values during the month. If I happen to reallocate from a time-bound category (which would be rare), I'd simply update the template to compensate (on the built-in calculator: remaining amount needed / remaining time).

      I wouldn't recommend this unless you can push all your income into next month's area and are willing to wall off the months. Full details of my process is here.

      Like 1
      • MomonWheels
      • Magenta_Camera.8
      • 2 wk ago
      • Reported - view

      Duncan For what it's worth, the toolkit, will give you a total monthly goals section in the inspector on the right. Personally, I found the toolkit easy to install and customize, but obviously, it's your call.

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      • Peppr2
      • peppr2
      • 2 wk ago
      • Reported - view

      Duncan It will also give you a whole Goals column right next to your budgeted column. For some reason it doesn't total them per group, which is annoying, but the individual amounts are represented, and the full total on the right, as MomonWheels mentions

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