May I suggest you keep budgeting $100 per month to that category.  One month you save $15, another you go over by $5.  Over time, it can yield a helpful buffer should you ever have a month that is quiet on the income front.  This is what I do when I budget for The Stores (aka groceries) category, just keep it at $150  per month.

Green Filly It depends on your goals.  I'm on a pretty tight budget, trying to get out of debt and save up an emergency fund while also maxing out my 2019 and 2020 Roth IRA all in the 2020 year, so I am more prone to underbudget so that I have to pull money from somewhere else if I go over.  it's too easy for me to spend that money if it's already there.  It's fairly easy to move money, but psychologically, it's a barrier that I've crossed that I wouldn't have felt if the money were already sitting in that category.

Green Filly 

Green Filly said:
I would rather roll that to the next month and if need be, use all $70 vs only having $50 and accidentally going over $20 and having to pull money from somewhere else.

The contrary view is to move that $20 to accelerate your highest priority category. The idea is to establish a Plan A that is in line with all your priorities and the information available at that time. If you leave it, knowing that you'll probably only spend $50, then your plan doesn't match your priorities as well as it could. You've missed a chance to improve the financial standing of something more important to you.

Superbone I was listening to Jesse's podcast and he counted someone's buffer as one month of their emergency fund, so if he does it, we sure can.

PhysicsGal Most definitely! 😄

PhysicsGal It's a lovely thought, but unless you get paid once a month at beginning of the month and push it into next month, it's not really ever one month's worth of money, except as you transition into the next month.

nolesrule As soon as you get your last paycheck, it is.

Superbone 

Superbone said:
nolesrule As soon as you get your last paycheck, it is.

 Sure, but the closer you are to the end of the month, the less time it has to still be a full month of income.

And really, it's the last income event of the month, which for most people with normal banks is going to be the last day of the month. :)

And remember, you can be fully buffered but paid once a month on the last day of the month.  So one really cannot make a blanket statement that the buffer is one month of the emergency fund, and in fact I'd argue for most people it's not the case.

I don't know about you, but our last check is on the last day of the month. But my mortgage payment hits on the first day after the last day of the month, so as soon as I change months I'm already down to less than a month of income in my buffer.

nolesrule I'm paid fortnightly so it varies every month but very rarely at the end of the month and if it is, it was a 3 paycheck month.

nolesrule said:
really, it's the last income event of the month

In my view, it's the first income event of the month. After all, it's from that point forward that must be covered by other means to allow you to push those checks into next month. I agree with @nolesrule that it's rarely an entire month's worth of money.

Edit: Now I see you're talking when the timer starts for the "month-sized" chunk. Yes, that's after the last income event of the month.

PhysicsGal said:
he counted someone's buffer as one month of their emergency fund

Do you count your Vacation fund as part of your EF? How about your Mortgage payment? Your annual Auto Insurance or Property Taxes?

I disagree it's one month of an emergency fund in the typical sense of money to handle unexpected expenses. Just because your furnace craps out (i.e., an "emergency" because you don't have a Furnace Repair category) doesn't mean you don't still have many of your obligations that will consume those funds.

Don't forget, Jesse's "buffer" is money that is simply 30 days old (or more) -- we're talking AoM here -- and Rule 2 funds typically plays a huge role in why money is as old as it is. (You just haven't incurred the outflow, yet.)

You might be able to reallocate from True Expenses that are further out, but that's a temporary measure because it has to be paid back (before that outflow occurs). That's practically the same thing as using credit as an Emergency Fund -- it has to be paid back, too. Credit is arguably more "usable" than reallocating from a TE because the timeframe is at your discretion (though there is a potential cost for that flexibility).

Do you think Jesse would cite unused credit qualifies as an Emergency Fund? I doubt it, which would completely derail the position that the "buffer" -- a significant portion of which is True Expense money -- is synonymous with an EF.

dakinemaui 

dakinemaui said:
Now I see you're talking when the timer starts for the "month-sized" chunk. Yes, that's after the last income event of the month.

 Exactly. You only have that extra month fully intact from the time you receive the last income intended for the next month and the first expense event. For some people they might receive more income before the first expense event, but I bet most people will have a rent or mortgage payment due on the first.

dakinemaui I don't consider myself buffered even though I'm paid once a month on the last business day of the month.  Personally I only have an emergency fund because of this, and not buffer/INM/budgeting ahead for me.   I'm building my E-fund up so it's not as large as I want it to be, yet.  I've considered using the INM category and using a buffer, but it doesn't seem worth the extra effort when I don't gain much from it because of being paid on a monthly pay cycle.

But if one can live on one's income without being a month ahead, then being a month ahead would be an extra month of cushion between you and being broke compared to when you had no buffer, so it's not nothing, especially for most normal people who don't use YNAB or budget so probably don't have much true expenses saved like YNABers.  Plus if your buffer is one month of income, so you can fund ALL of your goals in one fell swoop, and your E-fund is measured by months of expenses, then your buffer could be more than a month of expenses.  

PhysicsGal Yeah, I don't think INM is needed for your case. You can already budget a month at a time. You can just concentrate on building your EF or Income Replacement fund or whatever you want to call it for however many months of income you desire.

PhysicsGal Being paid on the last day of the month, I wouldn't use an INM category. The primary purpose is to keep funds out of the way during most of the month until you've received all your income.

PhysicsGal said:
being a month ahead would be an extra month of cushion between you and being broke compared to when you had no buffer

Jesse's version is you're living on money you received at least 30 days ago. It does NOT necessarily mean you're a month ahead. For illustration, assume I'm contributing to a True Expense category that's due in Dec, and because of those funds, my money is more than 30 days old when I spend it on daily expenses. That is not extra cushion against some other expense, because if I didn't have it, I can't pay the bill when it comes due.

That's the problem with the "age" definition of a buffer. True Expense contributions do NOT get you "ahead". They merely keep you from falling behind when it's time to pay the piper. 

Certainly, that's better than when you don't have those savings, because in that case you couldn't pay that expense when it came due.

PhysicsGal said:
if your buffer is one month of income, so you can fund ALL of your goals in one fell swoop

I see we've switched back to the classic Buffer, now. Most people's Buffer is NOT one month of income. (It's a very common misunderstanding.) Yours, for instance, is about $0 because you didn't have to save anything to be able to budget all of next month (having all your income arrive at the end of the month).

(I'm assuming you don't have any expenses that occur between your check and the end of the month.)

Owlette 

Owlette said:
You're right, there are other criteria that determine if you're buffered. Arguably the most important is, "Can I fund all of monthly goals at once?" Another might be, "Would I be impacted if my paycheck were delayed by a few days?"

 Nah, you're confusing "buffered" with other things.

If you send all your income from one month to the next month and you can't fund all your monthly goals at once, you're living above your means.

If you are impacted by a delayed paycheck, it's a question of whether you can cover the shortage with an adequate income replacement fund temporarily.

You're buffered if you use one month's income to fund the following month's budget. No more, no less.

Owlette said:
What other tests tell if we've met the the spirit of the buffer/30-day-AOM guidance?

I think you're mixing the two types of "buffers": 1) Jesse's hold money for 30+ days (Old Money) or 2) Live on Last Month's income (Classic Buffer). Furthermore, #2 increases the age of your money, but #1 does not necessarily yield #2.

Can I fund all of monthly goals at once? -- Yes, if you have a Classic Buffer. Maybe, if you have Old Money. (That "maybe" turns to "yes" ONLY if you are also classically buffered.)

Would I be impacted if my paycheck were delayed by a few days? -- Maybe if you have a Classic Buffer, turning to no if the delay were less than the inherent shift. Maybe if you have Old Money, turning to no if you can borrow some of it that's intended for other expenses without leaving them short -- meaning, "old enough", which may be more than 30 days depending on the size of the expense.

Can I pay my bills as soon as they drop, without timing them? -- Yes, if you have a Classic Buffer (and sufficient money in the categories, of course). Maybe, if you have Old Money, turning to yes if you can borrow some of it that's intended for other expenses without getting burned, so perhaps greater than 30 days.

In other words, the Old Money buffer can only ever answer, "Maybe" to all these questions -- which are supremely relevant, BTW. The lack of "Maybe" answers is why many veterans prefer the Classic Buffer. The primary gray area is the inherent shift, as that varies from case to case, which may cause someone to grow an emergency fund.

BTW, the Classic Buffer has a very simple test: can you budget all income received this month in next month's area? A "no" answer means you're only partially Buffered. Even that can be very useful, as it can be equivalent to fully buffered in a subset of categories (Groceries would be a good one if you like to stock up.)

PhysicsGal I'd say not a budgeting sin, but more of being a pragmatist. :-) The money is already in hand, and it's just busy work to pull it back to the current month's area.

I do the same thing when my 1st of the month mortgage shifts to the end of the previous month because the 1st is on a weekend. The scheduler enters it for the 1st (I don't import), so I don't really care. There is zero benefit to shifting funds in the budget and editing those transaction dates because my bank's bill-pay service is too stupid to work on weekends.

Superbone I saw that! If I recall, I wasn't exactly sure if they were using the Classic Buffer or AoM.  Which is genius, because I recall someone saying that the conversation was happening internally at YNAB, and the camps for each side were half and half. 

Here's what I think the difference is:

Classic Buffer: only BUDGET money earned in last month. 

AoM "buffer": only SPEND money earned in last month (aka - 30 days).

Since this is a budgeting app, only one of those really makes sense. I really liked dakinemaui 's analysis above of specifically why the Classic, Temporal Buffer is more helpful in answering key questions

I had another thought about that video, but I'm going to have to go watch again and refresh my memory.

In any case, I think the reason they were nebulous about how to do it in the video is because they're still officially thinking about AoM. Once they're more than half convinced about the CTB, maybe they'll shift the material from a SPENDING focus to a BUDGETING focus, which is easier to handle actionably in the budget...

Off to rewatch!

Move Light Sound Life 

Move Light Sound Life said:
AoM "buffer": only SPEND money earned in last month (aka - 30 days).

 The problem with this point of view is that you can't really control it, because you don't know what your AOM is going to do until after you've spent the money. And because of Rule 2 and the way credit card spending is calculated in, differing income cycles, differing spending cycles,  you can't even make a blanket recommendation of a particular number to keep it from dropping below 30.

Move Light Sound Life That was me, but to clarify, I didn't say half-and-half. I said many folks at YNAB are still big fans of some version of "get a month ahead/live on last month's income"; many are fans of Age of Money (especially as a motivator for new budgeters); and many hold both opinions simultaneously. I couldn't tell you the overall breakdown!

Matthew Sorry! I wasn't trying to misrepresent you!

Move Light Sound Life No worries whatsoever!

Matthew Perhaps if the had someone with a background in both Finance and Applied Mathematics review the Age of Money calculation, they'd be less of a fan. Information about where you just were is not helpful in determining where you are now nor in constructing a plan to go from where you are now to where you want to go next.

To  use a wacky map and compass analogy that is only partially analagous (since in the past I taught Orienteering merit badge at a Boy Scout camp), it'd be like doing a multi day hike through the wilderness and the compass tells you that north is based on the average difference between the previous day's north and direction you were facing throughout the previous day of your hike.  How will that help you orient your map so you know which way north is and make correct decisions about today's leg of the hike?

nolesrule I think the corporate supporters (especially concerning the motivation aspect) are relying on the rampant misunderstanding of new users who think AoM is describing how far ahead they are. I suspect the thinking is, "motivation is motivation". Again, my personal opinion.

dakinemaui You may be right about that, but that's really doing a disservice to the users, effectively allowing them to continue to believe something not based on reality. It's all fine and dandy when it correlates, but when it doesn't and it falls apart as it inevitably does, then what?

Herman Touché!