Brand new and way off

Hi,

I just created my first budget in YNAB a few days before September was over. I'm a little lost now because I may be trying to do too many things at once while starting out. Here's a breakdown of what I remembered I did...

1. Created September budget somewhere around 9/26 or so.

2. I get paid once a month, and that happens usually on the 28th of each month, but in September that happened (oddly) on 9/26. This end of the month payment is actually what I use for the entire following month. So the 9/26 paycheck is all for October budgeting.

3. I created the Sep budget retroactively. I have a Google Doc that I normally do my budget in and had all the numbers from last month's budget (Sep). So, I just put in the amounts I would need to pay/budget that my Google Doc showed based on what was to be paid in September. I did all of that in the "Budgeted" column.

4. Next, my transactions started flowing in from my accounts, but I wanted to see how September "played out" by importing all my transactions from those accounts retroactively. So, I grabbed the import files for each account in the time frame of 8/28 (pay day) through the present transactions.

5. Then I applied the transactions to the right categories in my September budget.

All of this seemed to be the right thing to do, but now I'm not sure what to do next. I've been paid on 9/26, and I've got money that I'm spending for October, but it seems like it wants to be "categorized" in the September budget? I've got a big green number at the top of the September budget saying it needs "to be budgeted" and a big red number on the new October budget saying it needs "to be budgeted". I've got transactions that I've come in that I'm not sure if they will correctly fall in the right month's budget. (I haven't touched the October budget yet, by the way. As in, no numbers entered.)

QUESTIONS:

Basically, how does it know that my just paid electricity bill (paid on 9/28) is really for the October budget, because that is AFTER my normal pay day for the month of October?

Should I not have imported all those old transactions for September?

Also, why do things like my Mortgage say they are a huge negative number in the left side bar? Is that because it sees that as debt that needs to be paid off and there's nothing I really need to do about that?

Thanks for any help you can offer!

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  • It will probably be faster for you to fresh start and look at the getting started materials. But in short:

    1. YNAB is a forward looking budget. Don’t import old transactions. Start with your balances today.

    2. Budget for spending you need to do today and after today.
     

    YNAB is an envelope budget, not a tracking spreadsheet. What you are doing is not assessing your spending, you are actually taking your money on hand and divvying it up according to what you need to do in the future. So you can’t budget for past spending because the money is already gone. You’d be taking cash you have today and saying “I’m going to set this cash aside for spending I already did” which...why would you do that? You wouldn’t. So don’t do that. 
     

    Take the money you have today, and budget it to categories based on the money you need to spend between today and your next paycheck. And if you can manage to budget all the way to Nov 1 with your 28 paycheck, that will put you in even better stead. 

    Like 5
  • I agree with WordTenor  I think you are mixing up philosophies and that's causing some confusion.

    A fresh start might be the simplest way to sort yourself out just so that you don't get things too confused.

    If you take a fresh start, enter the balances of all of your accounts - so ALL of the money that you have now, then you can take it from the To Be Budgeted (TBB for short) and apply it to the categories for the bills that you will be paying from today forward. If you already paid the power bill and the money has already cleared your account, don't worry about it, and just budget for next month's bill (which comes at the end of October).

    If you want some additional help, feel free to message me, I'm happy to chat about it directly. I know how much it can help to have specific support sometimes.

    Like 1
  • Thank you both!

    What if I scrapped it all and started again with an October budget, and added in the transactions that happened starting with my most recent paycheck on 9/26?

    Also, should I not be pulling in my mortgage account and seeing that big nasty number in the left hand pane (desktop mode)?

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 3 wk ago
      • 1
      • Reported - view

      Turquoise Pony re: mortgage account. It's not really necessary to include in YNAB. Some people like to include their mortgage as a tracking account for their net worth report, but those that do, often add a tracking asset account with their home value, as well, to offset that big red number. 

      Like 1
    • Turquoise Pony I'd recommend starting with the balances you have today (or the day of the Fresh Start), and not trying to add previous transactions—it's extra pain for no gain!

      YNAB really doesn't care about what happened yesterday, in a way that can be a bit of a shock when you get started, but it's liberating. Your budget is always asking, "What do you want to do next, based on the money, priorities, and circumstances you have right now?" You can't change the past, and you don't need to budget for it, either. :)

      Like 2
  • I'm an independent contractor and my income is sporadic.  I get paid sometimes monthly or quarterly. 

    I setup my budget.  I have my monthly expenses and periodic payments.  Periodic payments are usually one time bills such as house insurance, property taxes, annual membership fees.  I also have savings goals for future things I want (I pay cash only ~ no debt here).

    Money comes in.  I budget for future months.  Money that comes in October is budgeted for November, December, January.  I usually have about three months budgeted in advance.  This works perfectly for me because I never have to worry about day-to-day expenses and never stress about when that paycheck is coming in.

    I hope this helps.

    Like 1
  • I get paid on the last working day of each month, and that money is intended for use in the following month, so I think our paycheck cycles are similar.  I also started YNAB towards the end of September and here's what I did.  I entered a starting balance for each of my accounts (checking, savings, and credit card) on September 28th.  Since I had already paid all of my September bills, I just budgeted what was left in my checking account to a "Cushion" category, to cover any expenses that came up before the end of the month and I budgeted what was in my savings account to an "Emergency Fund" category.  I got paid on September 30th.  Even though that transaction technically occurred in September, that money is intended for October expenses/budget.  Because I didn't want that money to show up as TBB in the September budget, I created a scheduled transaction for that income on October 1st.   When October 1st came, that income showed up under the TBB for October, and I budgeted all that income to my various categories.  I now have a recurring income transaction on the 1st of every month, even though I technically get paid 1-3 days before then.       

    Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Meg R. There's no reason for your income transactions not to match reality. As soon as you receive that income at the end of the month, you can budget it in the following month.

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      • altmegan
      • altmegan
      • 2 wk ago
      • Reported - view

      Superbone I didn't want that income to show up "early" and be tempted to budget and spend that money in September, when it was intended for October expenses (basically, stealing from the future).  

      Also, I wanted to set up a recurring income transaction, so to make things easier and consistent, I set it to the 1st every month.  I also have a reminder in my calendar for the 1st of every month to "Budget."  Because the day I get paid changes from month to month, in order to enter my income in an accurate way, I would have to either enter each income transaction manually every month, or set a sometimes-incorrect recurring date, and then manually change the date when it doesn't match up with when I actually got paid.   Whether I get paid on the 29th or the 31st, it will always be available by the 1st, so that's the recurring date I chose.  It may not reflect reality, but it makes sense in my brain.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Meg R. I get paid every other week, AKA fortnightly. All of my paychecks this month fund next month. I have recurring income transactions. They happen on the date I get paid. However, they are categorized as Income for Next Month. They do not show up in To be Budgeted. When I am ready to budget next month, I release them from Income for Next Month by recategorizing them as To be Budgeted. I can then budget next month. There was never any danger of my using the funds this month.

      You can continue to do what you're doing (obviously) but I'm just showing you there are other ways to do it without fudging dates. Generally, best practice is for transactions to match reality.

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      • altmegan
      • altmegan
      • 2 wk ago
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      Superbone I am aware there are many ways to budget for the following month, and that some people have a holding category, like you, and others go ahead and budget all their money into categories in following months.  Since I'm new to budgeting, and I don't (yet!) trust my self-control when it comes to spending, it was better for me to pretend that money was not yet available to me.    

      I got paid on Sept 30th, and could have set-up a recurring income transaction for the 30th of every month going forward and it would have worked fine through November.  But, in December I actually get paid on the 31st, not the 30th.  So, I would have had to go in and manually change the date of that transaction in order for it to reflect reality.  In January, I'll be paid on the 29th, so I'd have to manually change the date again.  Choosing the 1st as the date for my recurring income transactions may not be "best practice,"  or "reflect reality" but it's the most logical and simple option. I don't need to create a holding category, or move money after the month rolls over, or change transaction dates.  My income shows up in TBB on the same day that I plan to budget for the month.    

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      altmegan Gotcha. That does show a missing feature and something I've heard users ask for in the past and that's the ability to have a recurring transaction that occurs on the last day of the month. That shouldn't have to be a manual adjustment process each month.

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 2 wk ago
      • 2
      • Reported - view

      Superbone if you schedule a transaction for the 31st, it will post on the last day of the month regardless.

      altmegan for transactions that hit your account ahead of the scheduled date (like your January 29 paycheck), there's an "enter now" option - under the Edit menu on the web and on the transaction screen in the app - that will immediately push the transaction to the active part of your register without messing up your preferred date for the next scheduled transaction. 

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      Vibrant That's good to know. Thanks.

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      • Bruce
      • Software Engineer
      • Bruce
      • 2 wk ago
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      Vibrant I think what would be better, and the reason there's even more variety of possible pay dates at the end of the month is that some companies don't pay on a specific date, but a specific day, like the last Friday of the month or possibly the last weekday of the month which isn't always the same as the last day of the month. 

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      • altmegan
      • altmegan
      • 2 wk ago
      • Reported - view

      Vibrant  I suppose I could change my recurring income transaction to the 31st, so it would post on the last day of the month.  But it's just one day earlier than the 1st, which is what I'm doing now, so I don't really see the point.  The 1st works perfectly for me and most importantly does not require any manual action/correction.  I'm choosing simplicity over accuracy.  I am aware of the "enter now" option, but why would I do that, when I don't intend to budget until the 1st of the month anyway?  It's simpler to wait until the month has rolled over and pretend like that money came in on the 1st. 

      Bruce Yup, I actually get paid on the last weekday of the month.  If the last day of the month falls on a Saturday or Sunday, I get paid on Friday.  So, that adds an extra wrinkle in trying to automate my income transactions.  

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 2 wk ago
      • Reported - view

      altmegan OK, so there's the missing feature. The ability to have a recurring transaction on the last Friday of the month, for example. Or maybe somebody has something that happens on the second Tuesday of every month. I think getting paychecks on the last Friday of the month is not uncommon. At least that's when my ex-wife, a teacher, gets paid.

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  • Turquoise Pony said:
    how does it know that my just paid electricity bill (paid on 9/28) is really for the October budget

    Lots of good advice above, but I don't see anyone addressing this. (My apologies if I've missed it).

    Your outflow on 9/28 is NOT really for the October budget. That is a September expense because you pay in Sept. If you want to budget all of your Sept. income into October's area, you're going to have to budget for that Sept. expense from money received prior to Sept.

    In other words, you have to get ahead to be able to push all your income into next month's area.

    (The budgeting process is simplified when you can push income into next month, so it's a good idea to get to that point. One way to get there fast is to apply startup capital, assuming it covers those month-end outflows. )

    Like 2
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