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)?
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.
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??
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.
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).
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.
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.
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
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.