Budgeting Future Months

Wife and I have made tremendous progress budgeting future expenses.

When I budget these dollars I'd like some kind of cross check to ensure that I'm not budgeting more dollars for that month than I anticipate earning in that month. For me, this gives me confidence that I'm continuing to spend less than I make and build savings / emergency funds.

In the web app, on the right side, there is a section for budgeted and inflows. Is there a way to see expected income (repeating paychecks with category TBB)? 

Thanks.

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  • Coral Admiral said:
    ensure that I'm not budgeting more dollars for that month than I anticipate earning in that month.

    ?? You should not budget dollars that cannot be immediately spent. Do not take To Be Budgeted negative.

    This allows accurate spending guidance -- every penny shown as Available in a category really is available without impacting anything else.

    Like 1
  • Yup, the key here is that you only get to budget money you have earned, like has actually hit your account. So some people in ynab have covered this month expenses with their current paycheck and have some left over and then can budget that money into future months. But if you haven't earned it, you can't budget it. Hope that makes more sense??

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  • Hi, and thanks. 
    to be clear, I am budgeting dollars I earned this month into future months. 
    i want to compare the dollars I have already budgeted To the dollars I expect to earn. 
    this will confirm I’m budgeting the right amount and not putting to much into a future month. 
    it could also help me project future savings. 

    Like
      • Cyan Steel
      • Cyan_Steel
      • 6 mths ago
      • Reported - view

      Coral Admiral I think I understand what you're saying, but please keep in mind that the core philosophy of YNAB is built on 4 key rules/principles. What you're wanting to do is violate Rule 2 (Embrace your true expenses) and Rule 3 (Roll with the punches).  You never want to forecast future earnings because you shouldn't plan on spending money you haven't earned yet. However, you always want to try and forecast future expenses so you can prepare (budget) for them before they occur. Forecasting future income = BAD. Forecasting future expenses = GREAT! Starting out with YNAB is a dynamic experience, so your budget will change rapidly and often at first until you've determined which categories you really need and how to properly fund them. Once you've arrived at the stage where you have found your true monthly expenses (rent/mortgage, utilities, cell phone bill, garbage pickup, groceries, etc), and have determined what your future expenses may be (think Christmas spending, future birthdays, that Costco and Amazon Prime yearly renewal, bi-annual property tax expense, and so on), you'll know what you need to budget for. You'll always have unexpected expenses and should create a budget category for those as well. Call it the Emergency Fund category, for example. That's where Rule 3 (Roll with the punches) comes in. With an emergency fund built, you have a category you can safely pull money from to cover those unexpected expenses. Let's say something goes wrong with the family car and it's going to cost you $500 to fix it. You have built up $1000 in the emergency fund to cover those types of unexpected expenses. After using that emergency fund to get the car fixed, you now know you should create a new Auto Repair category that you can fund with some amount of money each month to prepare for any future auto expenses or emergencies. It can be a little frightening to budget out too far into the future before you've determined all of your true expenses, because you worry you're spreading yourself too thin. Keep in mind you can always pull from money budgeted in the future to cover expenses you're encountering now, just be careful your making sure you cover your expenses as far into the future as you can safely extend (Age your money).

      Like
      • Wiecked
      • Happy Happy
      • Orchid_Tiger.5
      • 6 mths ago
      • 1
      • Reported - view

      Coral Admiral ahhh, okay. Have you messed with “goals” then? We have a goal set for each category and then we budget future dollars up to those goals. Some goals never change, like mortgage. Other goals we change with experience. That’s what we use to quickly fund future months budget. As far as comparison with expected to earn, i dont think thats a ynab thing. Is your income variable?

      Like 1
  • YNAB is a plan for your money, but it's a good idea to have a plan for how you will allocate money when you get it. You may get something out of the concept of a budget template.

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  • I understand what you are saying here.  I like to plan a few months ahead sometimes.  I discovered a trick to do this. The way I do it is by creating another account called "Anticipated Income".  I enter all the paycheques and other sources of expected income for the three month period I'm planning for just using the current date, but put the actual date the $ is expected in the subject line (eg. July 15th paycheque).  Once all of those are entered in that account, your budget will allow you to go ahead and budget ahead for all of the money - I enter in all the expenses month by month for the three months as is normal, and reconcile against the final of the three months.  I've done this for a long time and it works.  You must monitor any overspending in the first months carefully however, as the budget will show green in them, and always check against the final month for which you've planned.   As time passes and actual income comes in, I then remove each item in the "Anticipated Income" account, paying attention to any differences between anticipated amount and actual amount, reconciling accordingly.  For each actual income item that comes in, you must always delete the "anticipated income" item, like crossing it off a list (i.e. don't count it twice).

    Like
      • dakinemaui
      • dakinemaui
      • 3 mths ago
      • Reported - view

      Aquamarine Admiral Simpler to just look at the Budgeted Header, ensuring it doesn't exceed the expected income.

      The way you're doing it has a very real risk of pulling those fake funds back into the current month. Obviously undesirable, since your spending decisions are then influenced by money that cannot be spent.

      Like
    • So, Matthew , Future Committed Transactions (expenses that affect the budget when you tell them, and don't have to wait for their date) are not supported with the reasoning that people would abuse them and budget income they don't have?

      Like this user does anyways?

      Aquamarine Admiral , your current workflow gives you inaccurate spending guidance. You don't have the money your categories say you do. You're missing a big benefit of YNAB by circumventing its method.

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

      Move Light Sound Life Actually, that user is nominally keeping those fake funds in a future month. Only the current month is used for spending guidance, which is hopefully real money -- Stealing From The Future design flaw notwithstanding.

      Your point about future dated transactions that immediately impact the budget of course remains. The current implementation is trivially circumvented by those who want to abuse it, so the only ones being hurt are those proactive users for whom it would be a useful benefit.

      Like 1
    • Move Light Sound Life You really think I'm going to take sides on that??? Want me to weigh in on the Middle East peace process, too?

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
      • 1
      • Reported - view

      Matthew Yes, we do. We value your opinion. 🙂

      Like 1
    • Superbone You mean my flippant response didn't mollify you?!

      I think there should be a way to have scheduled transactions affect the budget, but I would want to make sure we maintain clarity about the current state of the budget (i.e., if the amount of money currently in your bank accounts doesn't match the amount of money in your budget due to scheduled transactions, that needs to immediately clear in some way).

      I know (1) that's not an insurmountable obstacle, and (2) this has been discussed in great detail and many of you understand the gritty potential implementation details better than I do. Not sure if that helps any more than my joke!

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
      • 6
      • Reported - view

      Matthew And what about the Middle East peace process? 😉

      Like 6
      • dakinemaui
      • dakinemaui
      • 3 mths ago
      • 1
      • Reported - view
      Matthew said:
      I think there should be a way to have scheduled transactions affect the budget, but I would want to make sure we maintain clarity about the current state of the budget

      I refer you to the prototype implementation YNAB put out prior to 2016 that was extensively tested with resounding success. Things were extremely clear.

      Matthew said:
      if the amount of money currently in your bank accounts doesn't match the amount of money in your budget

      This should NEVER be the case.

      Like 1
    • Matthew I didn't mind the flippancy, but I was glad to read your more detailed thoughts. Thank you, Matthew.

      Like
  • If someone anticipates receiving a large amount in one month and half that amount in the following month, planning for two months at once using the workaround is perfectly acceptable.  YNAB is sadly very limited in its fundamental premise (we "should" only think one month at a time), as much as there is clearly 'typically' some wisdom in doing so.  It is therefore no surprise to see YNAB-biased comments commanding users to think only in terms of the current month and setting out all sorts of scare scactics about overspending etc. to do it.  I actually understand the premise, which is why I continue to use YNAB, but I am perfectly capable of modifying it to accommodate 'real' fluctuations in income which can be reconciled over periods of time longer than one month.  In my opinion, the way I have devised works fabulously and has yet to fail me.  I have no plan on changing it.  I offered my comment not for YNAB's benefit, but for the user who asked the question, as s/he was clearly identifying the same flaw so many other users see.  I'm actually not a fool in need of YNAB's godly budgeting wisdom, and I'm quite sure neither is the person who asked the question to begin with.  I hope you can handle the idea that not all users will use the software as you instruct - The customer pays for it and can use it however she/he sees fit.  Perhaps YNAB should express some quiet gratitude for the fact such workarounds actually stop users from canceling the subscription altogether.

    Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
      • Reported - view

      Aquamarine Admiral We all bow down to your superior wisdom. I, for one, will practice quiet gratitude that I was able to experience your words first hand. Just out of curiosity, what do you get out of this future tripping?

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

      Superbone I would guess the desire to change up their budget to deal with variable income. In my experience, there are easier ways to do that, but I'm sure such tips would come across as "biased".

      Like 1
  • Aquamarine Admiral said:
    I offered my comment not for YNAB's benefit, but for the user who asked the question, as s/he was clearly identifying the same flaw so many other users see.

    The first part of my response was for your benefit -- not to make you stop budgeting with fake money in the future, but to suggest a way to do that that is less work and less prone to error. Obviously your call to consider that or disregard. No skin off my teeth.

    The second part was more for the other user. You are clearly aware of SFTF (given your admonition to check the future-most budget), but they likely are not. (Nor is it likely that any other new user will be that runs across this thread in the next 3 years. Yes, I fully expect SFTF to not be fixed in that timeframe.) It should be a consideration of anyone budgeting in the future.

    So hey, you've described what you do, we've pointed out some disadvantages for others (and you) to consider. Have a great day.

    Like
  • Aquamarine Admiral said:
    YNAB is sadly very limited in its fundamental premise (we "should" only think one month at a time)

     In reality, I don't believe this is true. Yes, YNAB believes budgeting in the current month, with funds that are already collected. HOWEVER, YNAB in no way believes we should only think one month at a time. If that were the case, there wouldn't be goals for future expenses, and true expenses wouldn't be saved for, as most of those only occur in the future. I have a ton of categories that fall into spending in future months, but I only budget for the current month (I usually don't budget for the following month until the very end of the current month) If I really wanted to, I could take all the money I have in my budget and budget out for months  right now but  I don't want to do that because so many things could (and most probably will) change between now and when I actually need to spend the money, that I'd be moving things around all the time. Definitely not worth it to me.

    Just my $.02

    Like 5
  • Lots of love in here... :-)

     

    Since my income is fairly stable I'm just watching the 'Total Budgeted' amount in the side bar to make sure month-to-month I'm budgeting about the same AND staying under my expected income for that month.

     

    While I'd love to see the 'Expected Income' amount added to the side bar, I'm not holding my breath.

    Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 mths ago
      • 1
      • Reported - view

      Coral Admiral Set your Recurring Income transaction to a category in your budget (mine is called Next Month) and use the YNAB Toolkit to use the feature that shows you upcoming activity amounts next to the Activity column in your budget.

      Like 1
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