Looking for ideas on upcoming situation

Starting around April I'm going to be getting a rather large (40%) increase in income for 6 months. (There's a slight chance could be permanent, but I'm not counting on that). 

Long story short we had a very rough 16 months and have no savings left and accumulated back a bunch of debt we'd paid off 2 years before. We're in the process of recovering though with current salaries. 

Other than generally getting back to the stable place we were we have identified 2 must have goals.

1) is to move. Our apartment is awful. The three of us hate everything about it, management sucks, we've totally outgrown it and planned on moving before fir above mentioned setbacks occurred 

2) go on the vacation we had to already push back twice that we've been promising our son. 

At current salaries, if we're diligent, both those things are possible.  With the 6 months of boosted income there's no excuse at all for us to not manage as well as make a real impact on our debt and savings. 

Here's my trouble... we're AWFUL at being diligent and worse at saving , even with goals. 

We've done it before, but aren't great at it, and with the chaos of the last year plus we're out of practice. 

So I'm looking for tips. 

My initial thought is keep working on the budget as is, and when the pay increase starts set up direct deposit for everything over my current take home get put in a seperate  off budget account. Out of sight out of mind. And then when it's time for moving ot the vacation, the cash is there and anything left is bonus.

I'm worried though since it's off budget it will br too tempting to raid for smaller things and drain it. 

But I'm also worried if I keep everything in my regular budget I'll not let the money sit in the right categories and keep WAMing them into other things. Or get too used to the extra cash that it will be hard when the 6month ends. 

 

Thoughts? 

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    • bevocat
    • Sometimes, It Just Sucks to Be You
    • bevocat
    • 1 yr ago
    • 4
    • Reported - view

    This isn't an issue that YNAB can solve. The ability to put money in a category in your budget and just leave it alone is what you need, and it sounds like you don't have that. It sounds like "out of sight, out of mind" will not work for you anyway either.

    There's no magic here. You just need to make the choices that Future You will want you to have made.

    Like 4
  • We're in a similar situation. We have stock options that, for the next ~1.5 years, about double our salaries. We might get another grant to extend that, but we might not. We decided together that every penny of our stock option money will go towards a house down payment, so we never get used to living on it. But we just don't WAM from categories like that... it's simply not something we allow ourselves to even consider. Agreed with @bevocat that you need to train yourself to leave the extra money alone.

    Like 2
    • WordTenor
    • I'm the oldest and the wittiest.
    • WordTenor
    • 1 yr ago
    • 9
    • Reported - view

    One way to think about this, is why will putting it in another account work? You can always just move the money, even if it takes a few days. There is nothing about “separate account” that is any more meaningful than “separate category” except for your perception of one boundary as being more permeable than the other. 

    The efficiency comes in learning to treat the category boundary with as much respect as you do the account boundary. 

    Like 9
  • The secret to not robbing categories lies in making them specific and reallocating money in advance of overspending. Are you really going to rob "Son's First Disney Experience" (or some more appropriate destination) to go out to eat for the 5th time this month? I doubt it. However, going out to eat, then realizing after the fact the category is now overspent, then thinking, "oh well, I'll just fix it when more money comes in," and doing the same thing for some other category, and some other category -- this is a slippery slope to disappointment. When more money comes in, the vacation doesn't wind up being funded (or is less funded). In effect, you robbed Vacation anyway!

    Awareness promotes decisions that are aligned with your true priorities. It's fine to reallocate from lower priority categories for higher-priority spending. It's a lot easier to say "no" to spending if a higher-priority category has to take the hit.

    Like 11
    • HappyDance
    • YNABing consistently since 2014
    • HappyDance
    • 1 yr ago
    • 2
    • Reported - view

    Make positive goals, make them specific, say them out loud, share them with others, and write them down. Come join the 2019 official savings challenge, declare your goal, and check in with the savers' group monthly with a report.

    Post your goals in your journal (if you keep a journal), on notes in your home where you'll see them everyday: kitchen cupboard, bathroom mirror, on the inside of the apartment door (stop and read it every day as you leave the apartment).  Don't make them negative posts such as don't spend . Make them positive messages about where you want to be, how much debt you want to pay down, how much you want in your emergency fund by what date, or how much you need saved up in order to move to a great new apartment.  You can do this.

    Also, take note:  It's not always overspending, sometimes it's underfunding, and it's not surprising that as soon as you have a little margin in income, some of those long neglected expenses need money desperately.  Eventually shoes wear out, bed springs sproing, and teeth need to be root-canaled and crowned.

    Not all WAMing is impulsive and irresponsible spending; but you should be able to differentiate between impulse indulgence and overlooked/overdue necessary spending. Be deliberate and realistic when setting your category allotments, and then keep asking yourself:

    Do I want this <impulse spend> or do I want to <insert goal>.  

    Like 2
  • Tan Zebra said:
    Here's my trouble... we're AWFUL at being diligent and worse at saving , even with goals.

    You don't have to tell us here if you don't want to, but do the two of you know why this is?   Can you think about the typical sort of situations where you would usually end up WAMing the money from somewhere else, and then think of some specific strategies to stop doing that?

    I'm not very disciplined, I'm not good with goals and I don't naturally like to be organised.  I've found that I first of all have to know myself, and then I have to outwit myself in various ways in order to keep to the budget.  Here are some examples:

    • A typical overspend for me would be buying expensive ready-to-eat food instead of cooking at home, because I got home too late or too tired or just too grumpy to cook.  Having identified that, I keep some relatively inexpensive things in the freezer that I can eat with almost no preparation.  These aren't things that I really enjoy or I'd just be raiding those all the time.   In fact, they're things that I don't especially like but I can eat them.   So, no excuse to buy a takeaway.  :)
    • I budget for my biggest spend - Groceries - by week.   This is within the usual monthly budget, but instead of having one category for Groceries I have five categories: Groceries Week 1 (1st to 7th), Groceries Week 2 (8th to 14th) etc.   Breaking it down into weeks gives me more of a sense of the amounts.  Also, if I do overspend one week I can start over straightaway and get back on track for the rest of the month.  Hopefully the damage would be so small I could even WAM from the other Groceries weeks.
    • I budget for my most variable spend by week as well.  This is Social, where I put entertainment, socialising, trips and presents.  I used to chronically under-budget for these things - I was doing what YNAB calls "aspirational budgeting", liking to think I spend less than I do.   Then I'd spend more than budgeted and start WAMing.  Thinking about what I'll actually be doing week by week for the month ahead helps me to budget more realistically.  Then when I see how much I've budgeted I might decide in advance to cut back on my plans or cut back in another category instead, as long as that's realistic.   
    • Another thing I find helpful is to keep YNAB up to date, entering transactions the same day.   I also try to check how much I have in budget categories at least once a day, even if I'm not planning to spend anything.  "Out of sight, out of mind" is dangerous for me.  I need to keep reminding myself of the amounts I have to spend.  And rather than hiding savings projects from myself, I personally find it helpful to keep looking at them and remember that they're important to me.  I certainly don't want to keep looking at them reducing so that motivates me not to raid them.
    Like 6
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