Need inspirations/best practices for long-term
I have been using YNAB for a while most for managing monthly budgets, and It works great so far. I am looking for suggestions on making the most of its functionalities and need some inspiration with the following "workflows."
1. Starting month from zero
Luckily, I usually make more than I spend :) This means I have leftover money in a couple of categories - more money is budgeted than was actually used. For example, when I budget for June, the leftover money from May is available to be budgeted. I want to start from 0 every time. How would you approach that?
I was considering creating "Leftover savings" category to which I would move overfunded categories at the end of May and then enter a transaction to transfer that amount from the current account into a savings account or other investment.
2. Long term planning
I do not see how to easily make and maintain long-term financial forecasts in YNAB. Let us say I want to check a Net Worth Value that I will reach in 2030 taking into account this year's budget history. I can make a budget forecast for future months, but NWV reports do not allow me to see the forecast. It seems for me that it has to be managed outside YNAB, perhaps you have some suggestions?
3. Unplanned large spendings
Let us say I want to on a spontaneous trip around the world. I make 5000 USD a month, but the trip cost 1 0000 USD. Obviously, the budget will not "add up" and I have not made a regular savings goal. I want to cover that with my savings. How do you do that in YNAB? Do you make an additional "Inflow: To be budgeted" transaction out of our savings account and then budget that expense? A trip is just an example here, maybe not the best one, because such a case is unlikely to happen.
Many thanks for suggestions, wish you all a great day :)
So glad you're enjoying YNAB! :) Here's some food for thought as you determine what workflows you'd like:
1. The Reset Available Amounts Quick Budget feature could be helpful for you if you'd like to reset to zero each month. With a click, it returns all Available funds to To Be Budgeted.
I am curious, though, about starting at zero every month. It's helpful to give all your dollars jobs—savings included! Consider creating a category group for your savings and have them on-budget with specific jobs you'd like the money to do. If you have that, you can simply move "leftover" money to one of those savings categories at the end of the month to continue growing your savings.
2. You're right that YNAB is a budgeting tool, not a forecasting tool. Perhaps a financial advisor can help you with this?
3. Having the savings categories I mentioned above would be helpful here. You would simply move money from one of your savings categories to a travel category to give the money a new job. If you need to, you could then transfer money from a savings account to a checking account to make it available for spending.
Accounts in YNAB are related to categories, by not tied to them, so if you're transferring money between accounts, it's helpful to give this article a quick read! :)
I can't answer 2. The answers to 1 & 3 depend on whether your savings is on budget or off budget. YNAB recommends on budget.
1) You can sweep extra amounts left over at the end of the month into another category for savings. YNAB even has an easy way to do this on the web app - select the categories this applies to and select the set available to 0 option. That money moves to TBB and you can move it into savings from there.
If your savings is on budget, then you wouldn't make a transfer to your savings account based on that number, since money in categories can be in any account. However, you can look at your checking account balance and decide from there whether to transfer money to savings based on what your buffer for that account is.
3) If you make an unplanned trip, you can either try to fit the costs into current categories or create a new one, entirely up to you. I think many people would make a new category.
If your savings is on budget, you'd move money out of lower priority categories (most likely savings ones) and into the trip category where you need if. If your savings is off-budget, you'd have to transfer the money from that account to one on budget, mark the transaction as inflow: to be budgeted, and then budget the money to the trip.
Similar process for the stove breaking and oops, didn't have an appliance repair/replace category, or whatever life throws at you.
I agree that not all categories should be set to zero each month. Especially savings goals and other TEs. The way you save over time in YNAB is by adding money to a category each month and not spending it.
But I agree, there are likely to be certain categories that you want to start fresh with each month, and for those, you can do what's been suggested above. Personally, I have a "slush fund" category that gets populated with extra from certain categories that I have designated should start fresh every month. So if there's extra in these categories, I move it to the slush fund at the end of the month. And during the month I use the slush fund to cover overspending when I'd rather not pull it from some other category. This month I started with only $5.00 in my slush fund, because last month was very full of unexpected expenses, and I used the slush fund as well as all the categories I normally pull money from for other rolling with the punches, so... It is what it is. Just gotta be a little more careful this month.