How to budget future months? ie assign next months wages, etc

I'm new here, still in my free trial. I was and am very reluctant to pay a hundred bucks, but it came very highly recommended so I thought I'd give it a try. We're trying to work out if we can afford to take a hit in my partner's wages, but we can't work out how to look at the future with YNAB

Obviously I know how to assign money in the next month, but what I'm asking is how to assign money you don't have yet, like next month's pay, my student loans arriving in January, etc. Does YNAB just not provide future budgeting tools? If so, can anyone suggest an alternative, preferably a cheaper one?

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  • YNAB does NO forecasting whatsoever. 

    However, you could budget future months (making your available to be budgeted negative) to show how much money it would take. 
    You would have to know what income you are expecting and only let it get negative by that amount. Then you would need to be extremely careful moving money around constantly incase you end up stealing from the future and overbudgeting in the future without realising. 

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  • I think usually this is easier when you have more months of budgeting with YNAB under your belt, because you have a better idea of your true expenses, but I think there are 2 ways you could approach this.

    First way, go create a new budget and give it a name so you know it's your 'Less Inflow' budget. Put in your regular expenses (I would include your student loans. You'll need to start paying them soon anyways, so there's not much of a point of excluding them right now), your irregular expenses, etc just like you have for your current budget. Then, add in your inflows as normal, and take a guess at what your partner will bring in. See how tight day to day will be, etc. If you completely mess it up, no worries, because you can just delete it! Or start it over! But it doesn't affect the work you've done on the budget you currently use. 

    If your partner's drop in wages isn't something that has to be decided immediately (could you put it off for a few months?) Then the 2nd way you could see if it's feasible for you is to figure out how much less you'll have coming in as inflow in the future, stick that amount in a separate budget line, and DO NOT touch it. So, for instance, if you know your partner usually brings in 1200/paycheck and the reduced paycheck would be 800$/check instead, every payday stick 400$ in a category called something like 'Pay Gap Bucket.' If you try this out and you don't miss the money that goes into the gap bucket, then you have a good idea what life would look like without the extra income and how comfortable you feel without that extra money. If you find that you can't make it a month without dipping into the 'Pay Gap' category, then you know that you'll either need to reduce expenditures or find other ways to bring in more money to cover the decrease. Bonus though, if you DON'T need that extra money that you've been putting in that gap bucket for a few months, you'll have a nice little stash to put towards another goal! There was a blog post about this exact thing awhile ago; I'll see if I can find it. :)

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      • SumBunny
      • sum_bunny
      • 8 days ago
      • Reported - view

      SumBunny ah here it is. It's about buying a car, but I think the same idea works for reducing your salary. 
      https://www.youneedabudget.com/a-sneaky-powerful-way-to-determine-if-you-can-afford-that-new-car/

      I do feel like there were some posts around the time when the pandemic started about pay cut budgeting. This is one of them, but I can't quite remember the others. Not sure if it's helpful, but just in case. :) 
      https://www.youneedabudget.com/his-pay-was-reduced-by-75-but-he-made-a-plan/

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    • SumBunny this is really helpful, thank you! I hadn't thought about doing it that way, it's a good idea. We have until January to think about it, they're needing to reduce their hours at work due to some health problems and HR have agreed to give them a month's buffer basically, which is great, and then we'll revisit it.

      thankfully I don't have to manage my student loan payments, in the UK they act like a tax. Once you earn £27,295 a year your repayment is deducted before the money even hits your bank account; you pay 9% of the income above the threshold. eg my partner currently earns £29,000 so they get paid £16 less each month. The interest is insane, but the repayments are very reasonable.

      Like 1
  • Cadet Blue Cello

    An easy way to budget future months is to set up a category "Future Salary" (or something similar) and enter the expected income as a negative amount in each month.  Then budget each month ahead of time.  This means you can budget your full expected expenses and play with the salary amount to determine which option suits you best.

    Once you have finished playing with the figures, simply "undo" or "reset assigned amounts to 0.00"

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  • Hey, YNAB, 

    You have no one (I'm meaning legacy users) pointing out why this is a bad idea, and what would be a better solution. 

    This new user will just have to figure out the hard way, or they may never come across both the efficiency or the benefits of the paradigm shift.

    I guess that's what you want, though.

    Instant gratification does not beget long-term health.  But it makes people feel good for a bit.

    Good luck, OP. I look forward to seeing what YNAB's response is. If I happen to check back. 😉

    Like 7
  • YNAB doesn't support forecasting (and never has).  That said - for many it's an important tool.  Use an Excel spreadsheet.  You can even export your YNAB budget to a CVS, open in Excel, then copy/paste the numbers going forward to see if you can afford to change your income.  

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  • YNAB is not designed to do forecasting. It is intended to be an envelope budgeting method so it is not designed to be used with money you have not yet received. 

    One option is to make a copy of your current budget using the Fresh Start option. When you do that, the new budget will show all of your categories but no transactions. You can rename it to "Sandbox" or "Test" budget. Then, you can find the archived version with the transactions and rename it to the old name so you can use it as your regular budget. Then, you can use the Test budget to understand the impact to your budget if the changes actually happen. 

    The other option is to export to excel and do the forecasting there. Lots of people do that. I do calculations for the upcoming year in Dec/Jan to determine what we want to use as our baseline budget for the year. And then we manage it day-to-day as we go through the year.

    I would not recommend the category of a future income and use a negative amount. It can create some issues of stealing from the future (search this term on the forum for more details). Also, depending on how you assign those dollars, you may accidentally make changes you don't want.

    Like 1
  • Cadet Blue Cello So glad you're giving YNAB a try! Welcome!

    What you're asking for is forecasting—not budgeting. YNAB is designed around the YNAB method and assigning only the dollars you have on hand is at the core, which is why you won't see forecasting functionality in YNAB.

    Think of your free trial in YNAB as a trial of the software and the method.  Keep up your old system for a while if you're nervous, but with your YNAB budget, you'll budget only the money you have.

    If you need some more reassurance, here are some videos from Jesse and other YNAB team members:

    So, all that said, we do recognize that looking forward is important, especially when your income is projected to change. Your best friend here is Targets, which will help you plan ahead while keeping you focused on the here and now. And by using them, you won't be assigning money you don't have.

    • First, create the categories you know you'll need—and remember to include categories for True Expenses that you'll need to save up for over time.
    • Then, create Targets in those categories that represent the amount you'll need to assign to the category monthly in order to meet your financial needs (and aspirations!).
    • From that point, you can use the Underfunded feature in Auto-Assign to see what your total monthly needs are based on the Targets you set. When you have no categories selected—and no money assigned to categories—you'll see a number in the top right of your budget (on the web) that shows you that total need for the month:
       
    • If that number is larger than your monthly income, you'll need to reflect on your priorities and change your Targets to lower amounts. If that number is lower than your monthly income, that's great! You have room to save more. :)
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