New YNABer Q's

Hi all!
I'm a fresh new YNABer, starting to budget. I have 3 questions about setting up mu budget:
1. Me and my spouse spend roughly 2500 a year on clothes. We want to budget for this, but do not know when the money will be spent. Example: we can spend 300 on January, 0 on feb and march. Another 700 on April etc.  My question is: what kind of goal should I set for the expense? 

2. My spouse and I both have credit cards. We always pay them in full, on the 10th(it's automatic). We pay most of our bills with the cards: electricity, home taxes, water, gas, etc. How should I set up my accounts, with that info in mind? Right now, it seems to me there is no need for a credit card account, just a checking account , since the credit card is always paid on time and in full...

3. We have spendings which are paid monthly but are not constant - example, electricity.  Is it a good idea to add them as a 'needed to spend' goal with a general estimate based on monthly average, and them adjusting them each month to the real price as the bill comes in?


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  • #1 - Either  Monthly Savings for $208 (= $2500/12) or Spend by Date, for $2500 by a year out.

    My preference is the former, as it does not penalize you for overspending by reducing following months' contributions. In my view, chronic overspending is a sign something is more important than originally anticipated. The category is actually "underfunded" relative to your priorities.

    I dislike the latter because I would NOT want to be locked in to a guess I made up to a year earlier. Priorities change, rendering such guesses obsolete. However, if you want that, it'll do the job.

  • #2 - Yes, you need an account. Otherwise, it's neigh impossible to reserve funds for those various things. One question, though: when you say you "pay them in full", do you mean you pay the statement balance (full amount due) or the account balance as of the payment date (full amount owed)?

    Like 1
  • #3 - I favor the Monthly Savings set for the average (1/12 the yearly total) and let any remaining funds carry forward. This will build up a surplus in the low months and draw from it in the high. The issue is you may be in a "high" time of the year right now. In that case, you'd need to budget enough to avoid overspending. In other words: budget the average but cover overspending.

    Edit: Some will set a "Needed For Spending" set to the maximum bill amount. The problem is the variable demand to refill the category each month mandates an impact on one or more other categories in the budget -- i.e., more work. I don't like it for that reason (as well as others), but it's an option you'll see being applied.

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      • dakinemaui
      • dakinemaui
      • 9 mths ago
      • Reported - view

      One can also do the math outside of YNAB to figure out the optimal contributions to spread any future overspending across the months leading up to it.. The whole "cover the overspending" is too reactive/last-minute for my liking. This thread discusses a more proactive approach.

      Both the optimal and "average+cover" approaches are useful in various categories: utilities obviously, but also Birthdays, Auto Fuel, Kids Activities, etc. Basically anything with outflows that differ from month-to-month but tend to repeat yearly.

      YNAB doesn't have a goal for the optimal calculations, but you could make a feature request for it.

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