How do you manage expenses that can change month to month?
I'm specifically asking about gas. I looked at the last month and figured out that I spent just under $190. I need to go back a few months and figure out what my monthly average is. Once I know that, my question comes into play:
Do I simply set that average as my goal and each time I fill up I add that as a funding transaction? Or does YNAB have another means of tracking somewhat erratic transactions that can differ from one to the next?
What do I do when I am either over or under that average in a given month? How do I adjust for that?
As with any costs that don't have a fixed amount you know in advance, you will have to estimate the appropriate amount to budget to that category. Having historic data (average spent per month) is of course useful as a basis for your estimate, but for example a wish to make yourself spend less in a given category might also influence the amount you budget.
So in your case, if you think the last month was fairly typical in terms of how much you drove and therefore how much you spent on gas, I would probably budget a round $200 for the next month. Then, as the month goes on, you enter each transaction and can always check how much money you have left in the category. If you need more than the estimated 200, you'll have to move money from some other category to your gas category to make up for the shortfall.Reply
You might consider budgeting an extra $50 (or the amount it takes to fill up your car) this month as an initial cushion, above the average. Then just budgeting the average should carry you along just fine. Some months you should spend less, some more, but with the category balances from the months you spend less rolling forward, the above average months should be covered. I don't attempt to cover extra fuel for a vacation or long trip via this method, vacations and road trips have their own budget categories.Reply
For gas I like a category target or baseline at the beginning of each month, $100. I don't worry about averages and price at the pump. I just start each month with a nice round $100 in my gas category. My average spent on gas is $59.61. I just like to start with $100 and rebuild it. In May I will use the quick budget options for a few select categories, gas being one of them, and choose "spent last month", which will bring those categories back up to my preferred starting baseline. This will replace what I spent on gas in April. In the summer months, I have to add extra to my gas category for road trips, so I usually double it to $200, then I skim the category back to $100 in October.Reply
Hi Mathew Snyder !
When I read Gas I thought heating - which varies greatly between summer and winter months - where gasoline for transportation may be more steady throughout the entire year (give or take a vacation).
When starting out with higher bills, you'll need to budget the higher amount initially and then budget the average later. If you spent $190 last month, around $200 seems like a good start. If the amount drops (in the case of a heating bill), you'll want to budget an average amount so that come higher months you're already prepared.
So, let's say you're spending close to $200 in the winter for 6 months and the bill drops to $50 in the summer for 6 months - that's a total of $1,500 for the year or $125 a month. You'll need to budget extra starting out in the winter (to cover the full $200) and when summer comes around, you'll want to budget the $125 - this pays the $50 bill and leaves $75 in preparation for when winter comes back around.
Let me know if I'm off base here! :)Reply