I funded next month with today's pay!
Technically it's cheating as it's my last pay of April but with the $400 I had leftover from this month, I covered all necessary categories for May! That includes unexpected costs, retirement savings, glasses/dental (their monthly funding requirement), and debt payments. Dining out, gifts, and vacation were the only ones missed, but next pay will cover them. 🍾
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It's not cheating. It's a step in the right direction.
Keep at it until you get to the point where you can fund an entire month using only income from the previous month. It will change the way you think about your budget.
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Thank you! I can't wait to get there. I'll be able to breathe easier.
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It does make things very easy and it's mentally liberating. I'm now able to pay my entire budget from last months pay. What's nice for me, is I have already budgeted out for may using dollars from April (this includes savings etc), and will have enough left over to pay for all of June as well.
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corecrash that's wonderful!
What did you and nolesrule do to get a month ahead?
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dangerosity My situation is not typical of most people using YNAB. I had already built up an emergency fund before I had started YNAB, so I just sacrificed some of it to get a month ahead in the budget.
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dangerosity Often it's worth tightening the belt or sacrificing some wants for a short amount of time to get there.
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dangerosity As a back story, I went through a bit of a midlife crisis 3 years ago. I divorced my wife (good decision), bought a corvette (bad decision), and spent a lot of money on guitars (I'm a musician), and other things. I eventually started to realize the error of my ways and traded in the corvette and my truck for a jeep. Finally at the end of last year I came out of the crisis, realized what I had done and sobered up as it where.
So I traded in my jeep for a hybrid Honda Accord (that saved me 300 per month), sold a bunch of musical equipment, and used those funds to pay off credit cards and to pay off my daughter's car. I then started using YNAB and caught the bug. I went through every expense I had. I canceled cable, switched from AT&T cell phone at 100 per month to Mint mobile for $20 per month. I canceled overdraft protection, canceled all but one streaming service, and I now share with my girlfriend, and I changed banks to take advantage of onboarding rewards. I trimmed everything I could trim. All of the above saved me $1300 per month.
3 Months of that extra money, and I'm able to live on past money.
I think our new economy is a bit strange. Companies are now taking small that we don't notice. Instead of a $120 cable bill, we pay $5 for one of many streaming services, but when we add them all up, we are paying the same or more. I had the mentality of: it's one $5 per month. It adds up. Now, I will save $1 per month if I can.I think I'm as trim as I can be, but I do I have my mind on my gym membership and my car insurance. I think I can save some money there. I just wish I could reduce my internet bill, but nothing else is available.
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corecrash I really love this post. Very honest and inspirational!
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Woohoo! Congrats on sending those extra dollars to next month, dangerosity . Using those dollars to get ahead is fantastic!
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Nicole thanks!
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I see a pattern here of really zero-ing in on priorities and spending less where possible. Not new to me but something that I'm not as dialled into as I should be. I appreciate all the input.
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dangerosity It takes time to change or even just adjust habits. You'll get there.
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dangerosity Congrats on working your way to getting ahead! Have a little bit leftover from each month will slowly add up
I too am 'cheating' I am two paychecks ahead but since technically I get my '1st of the month' paycheck a few days before, at the end of the last month, it isn't really funding a full month ahead. Not yet! But it feels good and I'm further along than I was when I started YNAB in December. Like you, I had a little left over from saving as much as I can within my budget to send to May so there is hope to finally reach that 'one month fully-funded goal'.
We can do it!-
Peripherie we certainly can (and will)!
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I am just starting out with YNAB and I have a question related to this. At the moment, when I get payed, I immediately fund what I can for next month. In a few days when I get my final paycheck for the month, I will have May fully funded, and then have some left over in 'to be budgeted'. On the last day of April, any money left in 'to be budgeted' I move to savings.
Is this what others do? Or do you wait for the next month to begin before you fund it? Is there any point in funding more than a month out? i.e. should I be assigning what's left to June's budget instead of moving to savings?
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Magenta Cello Best practice is to create an Income for Next Month category and categorize all income this month to that category. After all income has been received, you can then categorize it back to To Be Budgeted and then budget all of next month at once. Some choose to wait until the end of the month to budget next month but I do it once my main paychecks have been received. For example, I received my last paycheck of the month on Friday so I budgeted all of May this weekend. This whole process is YNAB’s old Rule 4, Live on Last Month’s Income.
Keep savings accounts in the budget and budget savings funds to savings categories.
Budgeting out more than next month has been found to be unnecessary and adds extra complications every time you make a change in earlier months which require adjusting these future months. Instead, use an Income Replacement category to save up for as many months of budgeting as makes you comfortable. Mine is six months of salary.
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Superbone said:
YNAB’s old Rule 4, Live on Last Month’s Income.That makes more sense than Age Your Money. I like the idea of funneling into a For Next Month category instead of to subsequent months. Less of a hassle when things inevitably change.
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dangerosity Yes, the old Rule 4 is both a goal to strive for and actionable on a continuing basis. It's also budget based.
The new Rule 4 just kinda happens as a result of following the other rules. And the metric for measurement is transaction based.
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So glad I funded Stuff I Forgot To Budget For. I have one charge that happens every two years and it went through yesterday. It's small, but pre-YNAB it would have thrown off my whole plan and caused me to go for funds slated for future use.
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dangerosity I really love my 'stuff I forgot' category and it is definitely a 'true expense' for me. Since I started YNAB I have had a few of those #surprisenotsurprise charges - some big and some small. But each time I make a new category and a long term goal to start paying a little at a time for when it will crop up next year. Just when I think I have caught them all though - boom. I have a personal line of credit as a kind of overdraft protection on my checking account. I just realized it will have a $25 annual fee coming up in a week. So I am about to wait on hold forever with my bank to cancel it, hopefully avoiding the fee.
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Peripherie nice pre-emptive action! I have a category called Horrible Money Drainers that houses my LOC debt and a loan I'm paying off. Both are brutal = several hundred each month. I'm thinking of refinancing the loan to get a better rate and then I can move some funds back into the categories I actually want to load up.
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For funding next month's bills, are you only funding the bills or the True Expenses too? :)
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Purple Foal Once you get far enough ahead, you do it all. All income this month funds all of next month including TE and savings.
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Superbone I was holding my breath for this answer! I look to fund the whole budget for next month, so I'm glad that's the right way to do it.
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dangerosity That's awesome! I'm glad you don't have to hold your breath anymore! 🤣
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