Incorrect Age of Money

Hi, my "age of money" is inaccurate. It says my money is 49 days old, but I'm definitely spending it before it gets to that point. I would like this to be accurate because I have a fluctuating income, and it would be really nice to actually have a good idea of how far ahead I am (once I get ahead, which I definitely am NOT yet.) What might be causing my money to appear older than it is?  For all information that might be necessary: I do have a joint savings account with my fiance, which is linked to my YNAB, but I don't have his income linked to my budget.

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  • Green Welder Age of Money calculates the average number of days between when you receive money and when you spend it. Said another way, it is the average age of the money of your last ten outflow cash transactions.

    It's important to note, too, that while AOM can be a helpful metric, you know how far ahead you are better than your Age of Money does. So it's important to use your category's available amounts as your guide, above all.

    Here's a quick calculation you can do to see how old your next transaction will be:

    1. Add up all of the money in your cash accounts (cash, checking, savings, and any positive credit card balances).
    2. Keep that number on the calculator and go to All Accounts. Start subtracting your most recent Inflows, not counting any budget transfers such as credit card payments.
    3. When you get to $0, look at the date of the next inflow (or the current one if you went below $0)—the age of that inflow tells you how many days old your next outflow transaction is going to be.

    If it is significantly less than your current Age of Money, you can expect to see your Age of Money decrease the next time you spend.

    Another important thing to note is that if you do a lot of funded spending on your credit card, you will see your Age of Money takes longer to respond, and may be higher than if you regularly pay cash for those purchases. In this case, you might consider extending your goal for Age of Money to a longer initial time frame, like 60 days or so. I hope this helps a bit, but let us know what questions remain, okay?

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    • Rachel 

      "Another important thing to note is that if you do a lot of funded spending on your credit card, you will see your Age of Money takes longer to respond, and may be higher than if you regularly pay cash for those purchases."

      This! Yes, this explains it for me!  Thank you!

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  • Green Welder said:
    and it would be really nice to actually have a good idea of how far ahead I am

     AOM doesn't tell you that. "how far ahead I am" is a forward looking metric and AOM is a backwards looking metric; AOM of 30 does not mean that you are 30 days ahead. You know one way to make your AOM shoot up? Put everything on a credit card and then don't pay the credit card bill. The AOM number will go up and up. When I was unemployed for 6 months and living off my severance, my AOM went up and up and up. AOM tells you nothing actionable about your financial health.

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  • AOM is worse than useless as a metric and best ignored. It doesn't tell you what most people interpret it to mean and that is worse than not seeing it. I would turn it off if I could.

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      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 2 wk ago
      • Reported - view

      monkeyhanger The YNAB Toolkit will let you turn it off. It can also add "Days of Buffering" which is a bit more helpful and, I think, what a lot people think AoM is.

      I get not everyone wants to use third-party tools, but there's no way YNAB is going to let people hide their replacement for "live on last month's income."

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      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 wk ago
      • Reported - view

      Habanero Salsa Thanks. I’ve got the Toolkit and have Days of Buffering turned on but must have missed being able to turn AOM off. TBH I don’t really use either metric much.  I know where I am from my category balances. 
       

      Howecee, I am finding that my tolerance for poor metrics and goal design is significantly lower after the handling of the recent  price changes. Suddenly it really irritates me when something I pay for is utter rubbish. 

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      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 2 wk ago
      • Reported - view

      monkeyhanger I understand, but I think there is some usefulness in seeing how far those balances can go, given a set of assumptions as opposed simply to seeing them getting bigger. 

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      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 wk ago
      • Reported - view

      Habanero Salsa Do you mean from Days of Buffering?

      In a stable system, I guess AOM has some meaning up to the 30 day point (or 60 if you use credit cards) but, just no. It doesn't do what people think it says on the tin so it is worse than not having a metric at all.

      Days of Buffering is more helpful as it at least tries to do what a lot of folks think AOM is doing. I haven't looked into how it is calculated to decide if it is meaningful to me because I look at the balance of my bench fund to give me some comfort of how long we could carry on as normal if I stopped earning. Occasionally, I add up the true emergency funds and the longer-term true expenses or discretionary amounts to see how long we could go on a the sh*t's hit the fan basis.

      I suspect this is another metric that is more helpful in the 2 digit numbers.

      Mine is artificially huge at the moment because I'm in the process of closing a company so the distributed funds have to sit in a personal, non-interest bearing account until the closure is complete and at least 50% of that will then finalise tax and VAT bills. 

      Off to find out how days of buffering is calculated. Just because I'm a numbers geek. Thanks.

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      • SgtBatten
      • "YNAB broke" since 2013
      • SgtBatten
      • 2 wk ago
      • Reported - view

      monkeyhanger I've had them both enabled for as long as it's been available. And honestly they are always about the same, so I find them both pretty meaningless over time. 

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      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 wk ago
      • Reported - view

      SgtBatten whereas mine were different by about 300 days. 

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  • To be frank, Age of Money in a personal budgeting program is total BS.  It was a marketing ploy put out by the creator of YNAB when they went to a subscription-based model.  It replaced the "live this month on last month's income" philosophy and is quite an inferior philosophy, as others can elaborate on.

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