Need Clarification On Budgeting One Month Ahead
I’m struggling a little trying to understand what budgeting one month ahead means. Should I be budgeted one month ahead in ALL my categories? I’m already budgeted a month ahead in my Immediate Obligations categories but not in my True Expenses or Fun Money or Savings categories. Most of my categories outside of Immediate Obligations are sinking funds or spend-as-I-go categories like Eating Out. It’s harder for me to track whether I’m budgeted in the future for them. My Age Of Money is already past 30 days so I know I’m generally already ahead by a month.
To me it's mostly a tool to make budgeting month to month smoother. I put all my income this month to a holding category (the type Superbone mentions) and then at the end of the month I check the ending month and then move to the next month to budget for all the categories. This way I don't have to budget in multiple sessions through the month and try to figure out how much of a certain paycheck needs to be budgeted in this month and how much to the next one (which was the way I had to budget before).
Being "a month ahead" simply means you do not budget income received this month to this month's area. Since you don't need any of it this month, you can accumulate all the checks and budget the entirety of next month so at once.
Once you are to this point, categorizing directly to a holding category increases efficiency. Until then, I suggest using budget entries to move money in/out of the holding category. More details about the mechanics are here:
+1 for using a holding category this month for next months par budget. I never budget in the future the way YNAB suggest as that is actually more work and can also give you a false indication of the current months To Be Budgeted (TBB). If you budget in the future then TBB can show 0 in the current month and then if you budget an additional amount in the current month TBB could still show 0 since it would use the money that was budgeted in the future. There are many posts on this problem, it is called Stealing From the Future (SFTF). The work around is to use a holding category, most people call it Income for Next Month (INM), this was actually the way it worked in the previous version of YNAB.