Am I using goals correctly?

I get paid on the 19th of the month. Then I budget. Goals turn green.

Then the bills go out. Goals turn grey.

By the 31st of the month all bills are paid. My budget is grey and green.

Then the month ticks over. Suddenly, all my goals are orange again. Which, I kinda get, YNAB works by calendar month and I havent contributed to that category this calendar month.

On the other hand, today, 4th of the month, 3/33 categories are green. The rest are orange. They will stay orange until I get paid again on the 19th.

 

Do I just have to get used to my categories being orange 3 weeks out of 4 due to my pay date, or am I doing something wrong? I feel like I only see the good colours one week a month.

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  • I get around this problem by simply not using goals. I know what goes in every category every month because I've been doing this for a while so I just use the quick budget option to budget the entire month in one go after I get my last paycheck for the month (ie I can budget all of December any time after Nov 22).

    What you could do is start setting aside a little extra in a category called Income for next month and once that equals 100% of a month's expenses you can budget next month. This is a one time event. From there on out, when you get paid on the 19th you will fund next month's budget.

    BUT - are you spending money you don't have? Like when you get paid on the 19th of November are you budgeting enough to cover the rent that is due on December 1? So the goals are only orange because they are monthly funding goals as opposed to orange because there has been overspending in a category.

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  • I am in a similar situation. I get paid every other week. But we budget on a calendar month basis. Since we are not fully a month ahead, we budget each paycheque to zero. For recurring expenses like mortgage and insurance I set up recurring expense. The category is orange if not funded but this is good. I need to budget for that at some point. For other things like Christmas I set goals. Again, some of these will be orange. (Although I think if you just set a target balance without a target date, it might not. Not sure on that. ) Edit - I just check and my thought that it doesn’t show orange if no target date was correct..

     

    I disagree with the not setting goals advice. To me that is part of the power of YNAB. it’s how I know that I have obligations to cover with my money. The goals that don’t have a target date are not orange and I know I can pinch from them if needed. Or not fund at all in a particular month if I have other commitments. 
     

    Plus by using goals (and recurring transactions) the budget process for that 2nd cheque is literally one click and then a few adjustments to back off categories that are not mandatory until my TBB is $0.
     

    One of my categories is a Next Month category which is were I deal with the gap between the start of the budget month and the first pay of that month. I load it up with the 2nd paycheque of the month and then when the month rolls over I allocate that to TBB. it keeps flipping in and out (like an accrual if you’re familiar with accounting). 

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  • jenmas said:
    BUT - are you spending money you don't have? Like when you get paid on the 19th of November are you budgeting enough to cover the rent that is due on December 1? So the goals are only orange because they are monthly funding goals as opposed to orange because there has been overspending in a category.

     Yeah all my Bill's are covered for each pay period (I'm not a month ahead yet though) so the goals are only orange because they are monthly funding goals 

    I'm not experienced enough to not use goals (yet) so I was hoping there was a way around the sea of orange in the interval between 1st of the month and payday

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  • MXMOM said:
    I disagree with the not setting goals advice. To me that is part of the power of YNAB.

     YNAB existed for a long time without goals and it worked for us. Sometimes the underfunded goals are more of a distraction than an assistance.

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  • MXMOM said:
    (Although I think if you just set a target balance without a target date, it might not. Not sure on that. ) Edit - I just check and my thought that it doesn’t show orange if no target date was correct..
    Mx Emmin said:
    Ooh, that might work...

     Ok so it doesnt solve every category: some categories do have a goal date, and some categories have to be "£[x] per month" (for example, a house deposit) but it cuts a big chunk of the orange 

    Some categories with this new goal stay orange because I put scheduled transactions in so there supposedly isnt enough to cover an upcoming transaction... but I know I'll be paid before then

    Still, progress!

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  • I set goals, but I do it in a very low tech way. As features have come and gone with YNAB iterations, it's always worked exactly the same way for me and I haven't had to change my method of doing it. I put my goal amount in the title of the category. So for example it says, "Mortgage (1st) $2240." Then when I hover over it, my note pops up that tells how how much money to put in there from each of our three different income sources. So on my payday, the note says I put in X dollars. On husband's, it says put in X dollars. I have all of my categories set up like that and have used it that way for six years now. I'm just stubborn like that. :)

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      • Mx Emmin
      • Orchid_Banjo.5
      • 10 mths ago
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      • Reported - view

      KaraBoo  This has occured to me! I'm going to do a new budget in January,  when I have a better handle on things, and I might end up doing this if I cant figure out the goals 

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  • KaraBoo said:
    . I'm just stubborn like that. :)

     if it ain’t broke. 

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  • You're not doing it "wrong", it's merely that goals work best when you can fund the current month up front using money received last month. There are numerous advantages once you get to this point.

    However, even then Goals are far from perfect. The main issue is you cannot shift money around -- ala Rule 3 -- without the angry yellow showing up. I don't use goals at all primarily for this reason.

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