Next Month's Budgeting with Future Income

Hello,

I'm trying to transition from YNAB4 and so far everything seems ok.  One possible deal breaker for me is the inability to enter future, known income into the register and allocate my budget categories for the following month based on that income.

For example, I know that I am going to receive $5,000 salary in August.  That amount is split into 3 transactions that occur on 8/1, 8/7, and 8/21.  I enter those future payments into their respective accounts and they are all flagged as "Schedule Transactions" in the register.  Previously, YNAB4 would allow me to budget from this future income in August.  This would allow me to fully fund all the necessary categories I needed to and make adjustments to not-so-necessary categories so that I don't overspend.  Now, I can't do that.  If I look at August in YNAB I simply see that my To Be Budgeted category is  deeply in the red despite those scheduled transactions coming in.  

So what gives here?  Is this the way it is,  and if so what's the logic for removing this feature?  Has anyone found a work-a-round?

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  • They removed this functionality basically to stop people from doing what you were doing. The YNAB method is based on working with the funds that you actually have right now, not the funds you are planning on receiving. The web-based version now enforces this part of the methodology by preventing this type of future transaction.

    Like 3
  • I never used YNAB 4 so am not familiar with this feature, but the work around is simply waiting. If you have all of this month's categories covered, and are just waiting for your money to come in, then you can budget the scheduled transactions for income money into a category called Income for Next Month. As the paychecks come in, the category will be populated, and when the last check is in, you can budget the entire amount into next month's categories. 

    Since you're only allowed to budget money that you have, you need to wait until you have it before you budget it. 

    Like 1
  • By budgeting income you did not actually have, you basically had Monopoly money in your categories.

    To do the same thing with the new YNAB, simply date all three inflows for the 1st.

    Basing spending decisions on inflated categories is most definitely not recommended in either version. However, it's your foot.

    Like 2
  • Maroon Clarinet said:
    what's the logic for removing this feature? 

    To enforce a sense of scarcity that encourages priority-based spending decisions. I know of no one who has tried it both ways that feels pretending to have money leads to better decisions. 

    I do wish you the best of luck regardless of whichever path you decide to pursue.

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  • dakinemaui I'm not pretending to spend money I don't have.  My income situation is solid, I have several months of "buffer" and have been using YNAB successfully for years.  I suppose I can understand the logic of enforcing scarcity for those who may have a more volatile income stream, but that's not my use case.  

    What this change, and the work-a-round that has been suggested does is force me into a situation where my budget register isn't reflective of real life credits/debits. 

    For example, let's say of my $5000 monthly income I receive $3000 comes in on August 1st.  From that $3k I populate all mandatory categories.  Rent, groceries, utilities, car payments - all the fixed costs that I have to pay.  The remaining $2k of my monthly income will come as income on 8/7 and 8/21.  With the old way YNAB worked I was able to PLAN for my expenditures based on that income and see it reflected in the budget immediately.  If I wanted to stash away $500 into my vacation fund I could see how that would be impacted by also wanting to spend $200 on clothes.  Essentially now, I lose that planning functionality.  This methodology is forcing me to tap into buffer funds that I have without realizing the impact to my total net worth that these spending decisions are going to make.

    The real hangup I have is that while I have the financial ability to COVER those extra categories based on my buffer, YNAB provides no feedback as to the IMPACT those decisions will make.  

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      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • Reported - view

      Maroon Clarinet I didn't say pretending to spend. I said pretending to have.

      Since you have ample reserves, why not use YNAB as recommended? (Either version, for that matter.) It would be a simple matter to fund August with money received in July. The money received in Aug can then go toward categories in the Sept. area. Etc.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 8 mths ago
      • 1
      • Reported - view

      Maroon Clarinet You’re saying you put it in the scheduler AND you actually enter it into your accounts in next month? Yeah, that’s against the YNAB philosophy and they don’t want you doing that. 

      You could still budget money next month even without the fake, upcoming funds. In your example, if you’re going to make $5K next month, budget up to -$5000 in next month. Then as funds come in, they’ll fill in your budget until To be Budgeted is back to 0 by the time the month arrives.

      Still, the best practice is to budget next month with this month’s funds. Many of us fill an Income for Next Month category with all funds received this month. As soon as you’ve received your last paycheck, you can release those funds and budget the entire month.

      Like 1
      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 1
      • Reported - view

      Maroon Clarinet There is zero difference in account balance with these two approaches:

      Reallocate "buffer" funds to August categories and then restore the buffer with checks as they arrive throughout Aug.

      Leave "buffer" funds alone and piecemeal add to Aug categories as you receive checks in Aug.

      The first is what I'm talking about doing. There is simply no need to budget income you don't have. You don't need any of this month's money until next month, and by then you will have already received it.

      Like 1
      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • Reported - view

      Superbone No, I believe the OP wants to budget future checks in the *current* month.

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    • dakinemaui I want to budget future checks in the future month.  It’s July.  I know I’m getting paid in August.  I want to be able to see how that income is going to be distributed among my budget categories in August. I 100% do not want to steal from the future I want to plan for it. With YNAB4 you could do that, now you can’t. 
       

      I also want to make sure I’m not spending more of “July’s money” than the total monies will receive in August - hence why I plan August’s budget with August’s income despite the fact we are really spending July dollars.

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  • Maroon Clarinet said:
    I am going to receive $5,000 salary in August.  [...] YNAB4 would allow me to budget from this future income in August.

    Again, doing this creates Monopoly money in the budget. One or more categories are not backed by spendable cash. Reasonably, you can choose to have normal categories backed by cash in hand, which therefore mandates that part of your "buffer" isn't real.

    I just don't see the point of pretending otherwise.

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  • Maroon Clarinet said:
    I want to budget future checks in the future month

    It will be the current month from the standpoint of those checks. The checks are dated August something and are budgeted in the August area. When it's August, the inflated categories you're looking at will be in the then current month (August).

    This is in contrast to pushing checks into the budget of the month after that of receipt.

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  • @dakinemaui

     I see what you're saying.  I mean, I think in reality its six to one and half dozen to the other.  After reading some other threads on the forums it seems that this has definitely come up before.  I suppose it is safer to remove the feature for new users, because if you aren't careful you can get yourself into a pickle - but ultimately I think you should be able to make those decisions for yourself.  Ultimately it will probably mean I won't migrate to nYNAB, but oh well. 

    Thanks for your engagement in the thread, very helpful! 🤙

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      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 1
      • Reported - view

      Maroon Clarinet Again, it's trivial to inject Monopoly money into nYNAB if you wish. I wouldn't base your decision on that perceived limitation.

      Like 1
  • I’ve recently returned to ynab and I’m currently doing both ynab4 and new ynab, the free trial, to compare them so I think I get what you’re saying. I also have excess as a buffer and I like pre loading categories for next month. I also like seeing where spending more on clothes might change how much I can spend on dining out or savings or whatever.

    When I followed this forum years ago I found that the advice offered wasn’t always flexible. That makes sense, the general idea of “this is how it’s done” works in the bigger picture, but I’ve been successfully managing my budget for years in my own way and I choose to continue doing that, so I don’t even include my savings in my ynab. I know it’s there, but I prefer to budget off my fixed income. 

    If your buffer is listed in your accounts, couldn’t you pull 5000$ from your emergency fund and call it income for August, then as real money comes in, make it income for September? It would show your savings as 5000 less, but again, you’d know the difference.

    I use ynab strictly to see what I’m spending where in real time and to make sure I stay within my monthly fixed income. I budget my goals (vacations etc) out of that base income, and any income beyond that just goes into savings. It isn’t exactly how the program is designed, but it works for me. 

    Like 1
  • There's an easy way to manage projected income, but only if you were using Income for <Next Month> feature in YNAB 4 for all your paycheck income and also don't need to rely on non-paycheck income to fund your budget.

    If you need any paychecks that come in during a month to fund even part of that same month, then it won't work.

    Like 1
  • I came from MSMoney and this aspect really threw me as well. I was very frustrated with not being able to project a "month ahead" from the 1st even though I had not received all checks for that month. I understand it can be done but is frowned upon. I also was coming in with plenty reserves and, what I percieved to be, a solid budget. What I can say is that after migrating to a month ahead philosophy it was a game changer. I kept the emergency fund alone and instead built up on the side. This allowed me to move more of my funds outside of checking and into higher bearing accounts while still having the confidence of being able to spend an entire month's worth of expenses on day 1 and be okay with covering it all. I also would say that since moving to ynab we have found the "goals" to be very appealing and has allowed us to take our budget to the next level. That is why I said "perceived". There are aspects of ynab that are very hard to achieve with msmoney and other software. To us the move was well worth the headache of retraining our brains and way of budgeting. But to be fair, ynab almost became a 4 letter word in my household as I kept trying to push msmoney into ynab instead of ynab into my budget. We have been very happy (minus a few aspects though nothing is perfect) now and have not looked back.

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