Forward look at budgetary expenditures
Hello all, ( I’m found this my son who is a student) How do I plan for budget activities, inflows and expenditures more than one month in advance ? It seems like I can only look at my budget one month ahead of the current month.
I would like to know whether I will be broke in June based on my estimated income given that my salary varies on a seasonal basis due to being out of school and having a summer job.
YNAB works the other way around. You work within the constraints of money you have, making a plan that will allow you to achieve the things that are most important to you.
Consider the easy case where you have $X each month. You allocate it to the important things and stop when you're out of money for that month. Some of those things are likely non-monthly expenses, but you budget a monthly portion toward them. (E.g., you'd budget $100 each month toward a $400 expense due in 4 months.) The less important things don't get funded, or timelines are pushed out so they don't require as much each month.
Now, the more complicated scenario... If you have variable income, you can normalize it to a monthly equivalent. If your summer income has to last you from Sep through May when you don't have income, then you better plan on putting away 3/4 of every check received in June, July, and Aug into a holding category (and fund each of those months from the remaining 1/4). In those "off" months, return a month's portion to TBB to work with. (If you have only a reduced income in the "off" months, you'll only need to put away 3/4 of the difference in those 3 summer months.) In this way, the fact your income is variable doesn't impact the vast majority of your budget -- apart from that "deferred income" category, you work with a consistent amount each month.
Hi Gardy! Slate Gray Yearling
YNAB is different from other budgeting tools you may have used in the past, because it focuses on budgeting the funds you have now instead of budgeting funds you expect to receive later.
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 some other folks on the team):