Move Light Sound Life said:
Don't budget in the future

 That's just the best option. Little to be gained from dwelling on the past or trying to predict the future.

bret - interesting take on Goals.  Once you are in the system, Goals are essential for making your budget categories hum from month to month.  Using Income Next Month method (Thanks dakinemaui ), it's a once a month budget session of squaring up transactions, evaluating Goals for categories, and then moving money from INM to TBB and hitting the Quick Budget Underfunded button. 

I have goals on almost all categories, my monthly bills, future looking items like Vacations and New Cars (Not sure why somebody said you can't create a goal more than a year out, I can?!?). 

Goals are the special sauce that enables the user to template their budgets and focus on more important things either in the budget or not.  Folks shouldn't be quick to dismiss them because they are not a mandatory part of making YNAB work...

mhornak I think many new users don't initially understand the difference between a goal and the budget entry / category. There have been numerous cases where they are "stuck" because there's no goal for what they want to do, when all they had to do was budget their desired number directly.

FWIW, Goals are not the only way to implement a template capability. I've described my process that doesn't use them elsewhere -- one advantage is that it doesn't berate me for following the methodology (Rule 3). While I wouldn't recommend it for new users, anyone who is following Classic Rule 4 and dislikes the nagging might consider it.

Eric Lofgren You can do the same thing in a category. For simplicity, say your expenses are $3000 a month. If you have an Income Replacement or Income Deferral category that has $9000 in it, you know you have enough to last you 3 more months without any future income.

Nicole These changes look great, for example for groceries!

If you’re looking at goals, maybe you could investigate common issues that pop up. Many new users seem confused by goals. They confuse it for the forecasting that a traditional budget requires. It makes it hard for them to do Rule 1 prioritization.

Wessel Goals are meant to take the place of forecasting. It is a place to put your nominal values while maintaining accurate spending guidance. By using Rule 2, you hardly need to copy forward the same value and add it up -- a.k.a., forecast -- since you're obviously going to get to the total you originally specified.

I don't disagree it is hard to do Rule 1 prioritization, but that is due to people wanting to spend more money than they have. I.e., the total of goals exceeds monthly income. YNAB guides them to deal with that and create a feasible plan, while a traditional budget would let the user think, "I'll just make up this shortage next month".

dakinemaui When you have a true expense, like car repairs, you are going to spend that anyway, you are just not aware of it. For these it's great to have a goal.

People also seem to use goals for "want" type spending. So when new month rolls by they just Quick Budget - Underfunded and they're done.

They're missing out on the most important part of YNAB: Giving All Your Dollars a Job.

Wessel Our designers are doing a lot of research and iterating for the upcoming goal changes! If you have any specific scenarios that stick out, you can let our product team know here—and they'll pass it along. One of the tricky things for new folks is going from the previous mindset of "I make X per month, that's my budget" to budgeting the money they have on hand. In addition to Goals, we have a few things in the pipeline to help! 😉

Wessel said:
People also seem to use goals for "want" type spending.

Of course they do. Goals merely make a pre-determined budget allocation for you. If that doesn't change, then why not save some effort and decrease the chance of fat-fingering the wrong amount? Want/Need is immaterial to how the number gets into the budget cell (it only impacts how big that number should be).

Wessel said:
They're missing out on the most important part of YNAB: Giving All Your Dollars a Job.

I fail to see how that follows from using Goals. Using Goals is just one of many ways to enter a budget value. Indeed, if income is consistent, one can absolutely give all dollars a job via Goals. If income is slightly variable (e.g., interest income), most people will address the "leftovers after goals" manually, but that's probably a tiny fraction of monthly income. If income is greatly variable, I'd suggest using a Deferred Income category so the effective income is consistent (or at least in the realm of very slightly variable).

Wessel Looking back over your post again, are you criticizing Goals for overbudgeting? I would certainly agree that's a bad idea, but that's hardly the fault of using Goals. It's a failure to understand envelope budgeting. Whether someone creates goals whose total exceeds their income or they simply keep making budget entries until TBB is negative is the exact same error -- a user error.

dakinemaui Yeah, overbudgeting is one aspect. But the real problem is that if all your money is tied up in goals, you are living in your past priorities.

Rule 1 says to prioritize your spending when you get paid. Too many goals prevent you from doing that.

Wessel Your conclusions may be true for you, but they are quite incorrect for me. I examine my nominal values throughout the month as new information arrives. They reflect my current priorities. (If not, then I would obviously change them.)

I agree that having goals whose total exceeds your income is a bad idea. So is manually budgeting until TBB is negative. Same diff. The user is in charge of both.