Handling income for a full month budget

I jumped back on the YNAB train in late January. I get paid on the 15th and last day of the month so on Jan 31 I reconciled all my accounts and budgeted for February. Note that at this point I had only added bank accounts - no debt (CC's, mortgage,  etc..) had been added.

I budgeted all of my categories for what I expect to be my monthly expenses in those categories and that budgeted total matched my expected February income + the rollover from the reconciliation in January. We do have some variable income but that gets thrown into a "Credit Cards - Additional Payments" category or one of my savings goals.

Through the first part of the month everything was going  as I expected - my TBB was negative (as was expected) and I was categorizing expenses and watching things adjust and feeling in control. Then we received a regular paycheck on the 15th and my wife's paycheck on the 16th. What I expected to happen was my TBB to go down to zero or close to it. Instead it jumped to almost $3000 which has completely thrown me off - I don't have $3K to budget because I already budgeted for the entire month.

Note that the check on the 15th (and the additional one on the 16th) are used to cover the rest of the months expenses. The checks at the end of the month go towards next months expenses.

Another thing to note is just before the paycheck transactions came in I had added all of my other debt accounts to make sure I had full visibility into all my finances.

So TLDR - my TBB is WAY off and I have no idea why or how to fix it.

HALP!

Also - I've only ever used nYNAB and have no plans to use YNAB4 so please keep the "nYNAB sucks/is harder/whatever compared  to YNAB4" comments on mute.

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  • YNAB is an electronic equivalent of the envelope system. That means you budget money only that you have into your categories, and then spending according to your category balances. When you don't use it as intended you are going to get strange results.

    Since you added your credit cards around the same time, if they are  budget accounts, as they would be by default, then that is most likely the culprit. Have you been spending on the credit cards or only paying down debt without using them?

    This one may be tough to sort out, and you may be better off doing a fresh start with all of your budget accounts starting at the same time so that everything lines up.

    Like 1
  • Further to what @nolesrule said,  did you budget for the starting balance on your credit cards, if any?

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      • Chris M
      • ultimatemonty
      • 3 yrs ago
      • Reported - view

      jayne_m I did not - the credit cards were added after I had already set my budget for all of my categories. They all currently carry a balance (one of the reason's we're using YNAB is to change that).

      I'm still confused as to my my TBB jumped so much - I had ~$4K in income and around the same in negative TBB so I would have expected the negative TBB to drop to close to zero.

      So it sounds like I should fresh start again. Ugh.  Going to try a budget template this time with scheduled transactions for all my autopay bills and see if that helps. Any other tips?

      Like
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
      • Reported - view

      Chris M Make sure you understand how the credit card handling works. I think that's what is causing you to get out of sync. Are you actively using any of  the card for new purchases?

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      • Chris M
      • ultimatemonty
      • 3 yrs ago
      • Reported - view

      nolesrule occasionally for things like "get 50% off your purchase when using your store card" promotions that we have already budgeted for. But no large or unplanned spending goes onto those cards.

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
      • Reported - view

      Chris M But if you already budgeted for them and you used a credit card but didn't have the credit card in your budget, how were you managing that? This could be the source for why everything is out of sync.

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      • Chris M
      • ultimatemonty
      • 3 yrs ago
      • 1
      • Reported - view

      nolesrule maybe? There wasn't enough spending on any of those cards to account for the jump in my TBB though. I'm going through the Fresh Start process now using the Budget Templating method, updating all the balances, and setting up scheduled transactions for everything I can. Hopefully starting with everything added will keep things on track.

      Like 1
  • In your credit card payment category, the amount available to pay your card should match the balance of each credit card but the opposite sign, so if you owe $100 on your credit card, the amount available to pay your credit card on the budget screen should be $100 in green. Is there any variance? If so, you need to budget more or less to the credit card line so the payment available matches.

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      • Chris M
      • ultimatemonty
      • 3 yrs ago
      • Reported - view

      jayne_m nope they all match up as expected - the budgeted amount for each payment. I've attached a screenshot for reference. The green in Payment on the last line has a scheduled transaction for the 21st that should bring it down to 0

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      • Jeff Reetz
      • Electrical Engineer
      • jefflilj
      • 3 yrs ago
      • Reported - view

      Chris M 

      From your screen shot, it looks like you are budgeting the same amount that your activity amount is for the credit cards.  You don’t need to do this as your categories that have those activities if budgeted would already carry that up to the credit card payment amount. Maybe that’s throwing the numbers off. 

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  • Sorry then, I'm out of ideas! Maybe YNAB support will chime in.

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  • Chris M said:
    my TBB was negative (as was expected)

    Just wanting to pull this out and emphasize. Your TBB should never be negative. This means that if you are paid twice a month, you likely won't be able to budget a whole month's expenses off the bat. You'll have to save money to be able do that (called buffering). 

    @nolesrule said above that you can't expect it to work as intended when you aren't using it as intended, but it's unclear to me from your answers that you understand that you aren't using it as intended/are purposefully filling your budget with money you don't have yet, so I wanted to point this out. This, as well as the credit cards,  are probably getting you out of whack. The best bet is to make sure that all your categories accurately represent your on-hand cash. 

    The good news is that if your accounts reconcile right now, then your budget is accurate. You can safely move money around your budget. 

    Like 4
      • Chris M
      • ultimatemonty
      • 3 yrs ago
      • Reported - view

      WordTenor yes I think this is more that I am trying to use YNAB in a way that it's not suited for.

      My general budgeting style has always been "budget for bills, budget for everything else" so my immediate mindset when creating my budget was creating categories for all of my bills and budgeting for those. Then creating categories for all of my True  Expenses (groceries, etc...) and budgeting for those. I wasn't even considering money I had - my monthly income is very consistent so it made sense to me to say  "I have a -$7000 TBB and my monthly income is $7000 so my  budget is good to go!"

      Gonna take a minute to adjust to only budgeting what I have available. My bills are generally on auto-pilot (outside of some local  utilities who refuse to get modern) so I rarely think about when they are due - they just get paid whenever they come due.

      Like
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 3 yrs ago
      • 4
      • Reported - view

      Chris M I similarly came to YNAB with pretty good habits. One thing I did was to budget evenly to the bills from each paycheck, in the order they were due. To use rpund numbers, if I had $1000 of bills and 4 paychecks, I budgeted $250 of each paycheck. This was by due date and irrespective of the size of the bill--so $250 #1 might cover three or four small things, while $250 #3 and #4 might both be sunk into rent (to be paid on the 28th). Others budget evenly to each bill from each check (1/4 of each bill)--this requires a little jump start to handle bills due earlier in the month. Once youve budgeted the amount for bills, you know you can budget the remainder to things like groceries, fuel, dining out, etc.

      Both are ways to keep up the good strategy of ensuring that you budget for bills first while showing you clearly the money that is left over for the discretionary spending, even while you're not projecting out beyond what you currently have. 

      Like 4
  • Hey Chris M !

    I know I'm a little late to the thread, but wanted to check in! Not everyone is used to an envelope system or budgeting in YNAB and that can take some adjusting. Did you create a Fresh Start? Are things adding up? If not, let me know and I can take a closer look at things! :)

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