Is $800/month too little to get 1 month ahead?
Hi YNABers. I just started using YNAB and I’m in college working part time. I was wondering if $800 a month is too small to be able to get one month ahead? I have a few pretty large savings goals (grad school, laser hair removal, larger emergency fund) that I’m currently putting about 20% of my monthly earnings back to reach those goals. I feel like I budget the minimum as far as fixed/true expenses. Should I scale back on savings for the sake of being one month ahead? Am I thinking about this wrong?
We actually started saving more as soon as we got 1 month ahead. I would take some of the savings and simply move you to one month ahead.
When we were one month ahead, the month "walls" were really solidified and helped control spending. We also set goals for everything which helped trim the fat even more.
I would say it depends on your outlook. But most things I have read will say to get one month ahead, get off the credit card float BEFORE you start saving money for the big life goals you have. It's a common thought but it kind of depends on what is important to you. Like RIP_MSMoney I would consider moving some of the savings you have to get you one month ahead....have your bills set up to be paid next month and from there figure out where you can cut and save more.
Welcome Brianna - we're so glad you're here! This is a great question, and I agree with those who've already contributed that this is a matter of your personal needs and priorities.
I like to conceptualize getting a month ahead as being in alignment with the goal of building an emergency fund. I wonder if the method of setting up a "Fund Next Month" category, outlined in this blog post, might be helpful for you to see all of your goals in one budget month? Check out that blog post for some more insight into how this can be done, and let us know how it's going! 😊
I am in the boat of get yourself a month ahead. I delayed for a few years and have only recently gotten to this point. It really does change your perspective as now I sit down at the beginning of the month and fund the entire month. I found that I spend even less time on the budget because I am not nitpicking or moving small amounts between categories that I thought were priority when the first cheque came in and then something different happened. It seems like it should not be as big of a deal as it is.
Even with the changes to the software, I would also still recommend the "Income for Next Month" method rather than physically budgeting in future months. There is a "Stealing from the Future" design that is partially fixed with the changes but maybe not as complete as expected. I haven't investigated fully. I found it easier to see that my pot of money is waiting for me to allocate the next month all at once. Allocating by paycheque, even a month ahead, seems like it would not give you the advantage of looking at it holistically. For example, if you get two paycheques, you would budget twice and then maybe look again at it a third time at the beginning of the month to confirm. But, personal preference will dictate how that works for you.
Allocating by paycheque, even a month ahead, seems like it would not give you the advantage of looking at it holistically.
Agreed! Normalizing the month is super helpful, plus the time between knowing a month's income will be different and actually budgeting... Er ASSIGNING (new terminology... Gonna be awhile before that comes naturally) gives a good breather to know how to approach the change in the best way.
Speaking from experience, both when income was reduced (multiple times), and when it was increased (tax return, bonus, etc... Easy to get excited and not think critically). This helps us be clear and intentional on priorities.
Plus, sitting down to a budget meeting more than once a month was not sustainable for us.
I'm also in the get a month ahead camp....
Your month ahead category can also serve as a "temporary" emergency fund, because if something really major does happen (major car damage, medical situation, loss of income completely) happens you're going to be digging into that month ahead for the important stuff that you need covered, it won't matter what category it was sitting in, it will get dumped into the essentials.
When the pandemic hit last spring, my BF got worried about our financial situation, not that we actually had anything to fear, but his hours did get cut, and I reviewed everything in the budget and found that if we had to, we could cover our mortgage and major bills for 3-4 months before we would be cash broke. And that would assume that somehow we suddenly had absolutely zero income, which was fairly unlikely all things considered.
So yeah, being a month ahead has more value in a much smoother budgeting experience overall, and really reduces bouncing around the budget a lot.
The second piece of the puzzle for us was when I was able to evaluate the reports and examine our average spending on categories that have a tendency to fluctuate every month (like groceries, gas for the cars, the power bill, etc). Once you have enough time under your belt in your budget (3 months is the first time to start looking, 6 months is better, but a year is ideal), dig into the reports so you can really tighten down on your budget categories for exactly what you're spending on average. It totally smooths out the winter/summer power bill swings, and helps to make sure that you're actually funding what you spend, which reduces the need to move money around constantly in your budget.
Overall, it gets pretty boring when you get to that point... but that's kind of the whole point, right?