When you are informed about an increase, for example, you can update the relevant Goals so next month has the new numbers without any additional action when filled in at the end of this month. After using YNAB since August, I recently did a budget re-set and transferred funds from our emergency fund into our checking account so that we could get a month ahead - or really, just a paycheck ahead. I don't care about the negative TBB in next month's area or the fact those dollars don't exist because I don't use next month for spending guidance. Switch over to the new month's area and the money for the entire month is in TBB, waiting to be distributed (budgeted). I think having an emergency fund is more important. AOM of 30 is merely a statistic about the average of your last 10 cash-based transactions. I wanted to clarify one element here. Unfortunately, there are some drawbacks to the new design that have led me (and many others) to conclude Option 1 is better. You can always reallocate back to an EF if necessary, but until then, that money is making things easier and providing clarity by budgeting on a cycle aligned with your expense recurrence cycle. My money is aged to 37 days which I'm very happy with. And does budgeting a month ahead mean all your categories are budgeted a month ahead, including these sinking funds? @dakinemaui how do you use a "holding category"? But I would love to understand why you prefer to sue a temporary category instead to see if I could benefit from this strategy. FINAL … The following may seem like a lot of words, but in practice it's easier done than said. Either use the Move Money tool by clicking on TBB or use the inline calculator to add to the existing negative budget entry. I put away about $200/month for the emergency fund and I'm about 60% of the way to my goal, but struggling to get a month ahead in the rest of my budget. (Early outflows next month will already be covered by directly budgeting ahead.). it seems a big part of YNAB’s methodology is focusing on the here and now. YNAB is an online budgeting software with humble roots that has grown into one of the most popular destinations online to plan your monthly finances. Have I misunderstood what the one month buffer is about? Nothing special, release on day 1 if you like. Isn't it funny how the explanations can sound so complicated but yet it seems so easy when your fingers are actually making the changes in YNAB? It's a slight tweak on what you're already doing that provides a progress indication. $20 in groceries and $5 in transportation—shown in the green pills below. I get paid 2x/month, it just seems odd with each paycheck i need to go find a month that's isn't fully funded and it could be income that needs to be spread across 2 months? This is the hardest part, but if you look at it as a challenge and take joy in watching your savings grow, it becomes easier. Option 1 you mentioned is how the old version of YNAB (Classic) was designed. Taking that money screws up that plan and makes for potentially a lot of work. (Technically, there's an indicator that money has leaked into the future.). As for the second workflow, it applies if I will need current month income in current month budget. That new behavior is worth every penny I'm paying for the subscription. Rule 1 is to make a plan for ALL your money. this also begs the question if I do happen to overspend somewhere it makes the most sense to move from categories with leftovers to cover the overspending or have it come out of the INM category, right? Depends on your income arrival time. YNAB – You Need A Budget If you want to skip the reading palaver and jump straight to one extra month of YNAB free, just click GIVE ME YNAB. 2. YNAB lets you budget ahead of time. Even if it didn't quite cover the deficit, I'm not going to blow through the entire month's worth of money in the first few days. then as you go, build up the monthly. Rule Four: Age Your Money YNAB asserts that if you follow Rules One, Two, and Three, eventually you’ll be able to pay this month’s bills with last month’s income. Once I have achieved a full month of pay I will re-label it 'buffer' and use it as a holding category. For this YNAB review, I want to tell you about my favorite features that YNAB offers. This makes it a little easier to add to it (e.g., if you have leftovers later in the month) or pull back (e.g., if you were a little too optimistic about allocations elsewhere). BEing a month ahead means being able to pay next month's expenses with this month's money because you are spending last month's pay this month. YouTube Video » ynab january 2021 paycheck 2 budget with me how i calculate my one month ahead category dakinemaui I second this answer. My question would be then what would be the impact to leave the money in that holding category until the month flips for real? I mean, it's not a surprise the summer bills are higher. At the end of the month, I would sweep the leftovers in Groceries to whatever high-priority category I'd like to accelerate. dakinemaui ok the sweep options seems easy enough, based on your comment below though you are still saying I should leave remaining amounts in things like electric or sweep leftovers here so as to cover for heavier months that may be over what I normally budget? Embrace your true expenses. The goal is for everyone to check category balances, and move money BEFORE incurring overspending. YNAB is free for one year for students with a valid .edu email address, with a 10% discount after the first year. And if you prefer, you can instead pay $84 for the entire year. Get One Month Ahead. Thanks for always diving deep in the details to help fellow YNABers! Apple fanboy macrumors Westmere. And I guess that temporary category is not the same you shared with me previously called "Deferred Income", to be use when your money fluctuate compare to an average? I have continued adding to that category with the aim of building it up to one month's expenses (now over $5K). I'm not completely sure what you mean. Sitting down at the end of the month and budgeting money that you already have for the next month is just a completely different mindset. Since that's obviously a priority, we'll have to spend less elsewhere. That will move all the money into TBB and you can budget for February. In YNAB 4, once you had a fully funded month-ahead buffer, you could send your paychecks from THIS month to NEXT month’s budget. You will not believe the feeling having 1k knocked back will give you. Direct Import. And while this may not be the case for others, in the process of getting a month ahead I actually found and reclaimed money in the budget that I didn't need. YNAB is free for students. Forgot to describe how this would work with an Income Replacement category. I've never had to do it any other way, but I imagine if I got paid weekly or bi-weekly, I'd really want to get a month ahead so I can just budget the whole month at once. Can someone clarify for me how this "one month ahead" works? If you have more dollars in income for January than you "need" to fund your February categories, that's an awesome problem to have and it becomes a bigger-picture discussion - can I start saving more for my next car, is my Job Loss fund where I want it to be, can I increase my retirement contributions, etc. Follow YNAB to get support and lots of great ideas on budgeting, Here's one description of specific workflows I would recommend. Vibrant got it, I've never recategorized income as anything but TBB, but I think that makes sense to mark it directly to that category. I just may not be doing it quite like any of you. If you categorized the paychecks as TBB and *moved* the money on the budget screen from TBB to Next Month, then on Feb 1 you would *move* it back to TBB. That's how I understand 'live on last month's income'. (i.e., money meant for Oct.) into the holding category with a budget entry (rather than directly categorizing the transaction). Wendy Valencia; Steel_Blue_Cup.3; 1 yr ago; 11 replies; 275; dakinemaui 1 yr ago; Tips & Tricks; I am a YNAB Newbie so please forgive me for a dumb question. The amount of savings required to be able to push all income into next month varies from person to person, but it's almost always less than people think. (The INM "job" was merely a plan of "Sit tight until I have all the dollars."). 2. So yes, I'd skip budgeting toward those emergency categories until all income can be pushed. The money is still there - you haven't spent it just because you transferred it - but it feels nice to know that we can do all of our savings/retirement transfers, our monthly giving, pay our mortgage, etc all on the first of the month if we want to. That way, by the 1st of the month, we have 100% of the income we will spend for the month and do not need to time our expenses based on … but the Toolkit (duh!) Personal Capital will help you manage your money. Paycheck on the 1st: This income gets used in the current month's budget. The next month category should always be completely empty by the end of the month. Spending goal is supposed to "top up" your category, but irritatingly, it makes you wait until the month actually changes in the real world. After that, Month Ahead vs EF, Month Ahead always wins out. At the end of the month, I then batch-edit the category on all those income transactions, changing it to Inflow: To Be Budgeted. I am currently using a YNAB software and looking at it, I think we are a month ahead. At the end of the month, empty the month's worth of money from the holding category and allocate it NEXT months area (the one that's about to become current). so there’s no real way to forecast further then that. Any income you get in January, put it into a category called Income for next month (or whatever works for you). For more help getting a month ahead, drop into one of our free, online classes about cutting spending or saving money on groceries. I'm not sure all this makes a difference as you can play with the names to suit what motivates. That will remove one more item from your monthly budget. dakinemaui THANK YOU so much for taking the time to explain this approach. Every penny of that money is slated to be budgeted in 0-4 weeks. I am happily confused because it is January 15th and January, February and March are all fully budgeted (including monthly amounts to True Expenses and Quality of Life goals) and I have money in the NMI category ready to budget for April. (Hiding balances in YNAB wouldn't help, because they're probably not even looking at YNAB! "Budgeting a month ahead" simply means that none of your income is budgeted in the current month. . LOL, Wendy Valencia You might be interested in the third-party app Allowance for YNAB. INM is probably the highest priority category in my budget outside of, like, rent and electricity. In fact, I'd reallocate the EF to facilitate it. I’d say that Personal Capital is the best of the YNAB alternatives. Thanks to YNAB and Nick True I learned how to properly use my Discover card, so I earned cash back AND paid off my bill in full every month with money that was already sitting there. "Toolkit.") Forest Green Commander Also, you don't budget past next month's area. On the last day of the month allocate all those dollars to the following month. Forest Green Commander You got the first part. And bring your questions! If you are happy with your own spreadsheet or use another budgeting tool, I highly recommend watching the online YNAB classes anyway. YNAB revolves around 4 easy-to-understand rules: 1. 4 Now, back in the current month, you'll see that money you just budgeted as Budgeted in Future. Although YNAB is the most costly option on our list, the company offers a … So between these 2 choices you express in the last paragraph: I am actually budgeting ahead by using option 2 and it does *seems* to work. Now I'd rather have my new month allocated at least the weekend before the month turn so I can look at the budget for spending guidance - even if the 1st is on a Wednesday and I got busy during the week. It doesn't matter when you receive your next paycheck, you'll know exactly where those dollars are needed as soon as they're in your account. We had a similar experience when we started ynab. Yeah, when your income exceeds your categories, you just need to budget more to existing categories (accelerate timelines or increase scope) or add more categories (add lower priority things you couldn't previously afford). Brandon says: November 12, 2017 at 11:15 pm. Budget TBB to $0 as normal, as far as it goes. You need to teach this “confused person” to look at YNAB category balances rather than account balances. I don't need September money in the Sept. budget, so I automatically categorize income to the holding category (scheduled transactions or Payee categorization rules). Forest Green Commander I find it most efficient to categorize those Jan. checks directly to the holding category. Bonus: Tiller Money is cheaper than YNAB by about $2 a month. What would happen if you leave it in the Holding Category, and transfer it to TBB on Day 1? (The sole exception are Spending Goals, but that's a rant for another day!) HollowGirl congratulations on having that money saved. Do you think we should take it out of X, Y, or Z?". After it's said and done, the holding category will always be 0 when looking back at budgets or reports, the income will still be income. I wonder why they can code it to work in the arguably more complicated scenario, and what is basically "Amount Spent Last Month" is indeterminable til the 1st. They explain better and in greater detail some of the philosophical changes that have made such a difference to us in our budgeting. However, it does so in a much more comprehensive way than YNAB. Want to budget more than one month ahead? Green Flute The mechanics I would recommend vary depending on whether you need any of the money from September paychecks in the September budget or not. In this scenario does it still make sense to leave extra dollars in each specific category? The original poster may or may not have the breathing room to move part of their existing emergency fund ahead to next month but that's what I did. "Income For Next Month". In fact, I may not release that money until I'm several days into the new month. I personally get paid once monthly at the end of the month, so I haven't bothered getting a month ahead because I can already budget the whole month when my paycheck arrives. offers a version of this feature. Just wanted to make sure I am doing it correctly. Budget as usual from there! You can also release it on Oct. 3rd if you like. My favourite budgeting tool for the modern age. Aging your money 30 days takes awhile. So the goal is not to fully fund multiple months in the future, its to make sure my January 15th and 30th checks will be used to fund February and they should all be going into the savings category for (TBB next month). YNAB dropped the budgeting 1 month ahead features, it’s one of the reasons I switched to Mint. . Category balances should inform one as to what they can spend for that category. How the money gets into the [TBB Next Month] category should mirror how it gets out again. After a break that was far too long (and that paved the way for our lifestyle inflation), in 2016 I realised I needed more. Historically I would just drop this month's paychecks into savings as they come in and on the last day of the month, I drop the savings into checking and do my budget, I actually prefer to keep this separation because there is FAR too much risk of someone getting confused and spending more than they should (as the family's budget creator one can assume I am not talking about myself being the confused one in this scenario....lol), So HOW IN THE WORLD do I account for the movement of money from one account to another and back in for the next month? dakinemaui Great advice! One of the keys to the YNAB philosophy is that you must get a month ahead on your income in order to have last month’s income at your disposal for this month’s expenses. My husband and I are a full month ahead in our incomes and have been for a while. Still such a shame that the old rules, that made perfect sense, got so messed up with the web version. So yeah, feel free to blur the line on timing to suit your needs as long as you understand what's going on and make spending decisions on month that is actually Available. Getting a month ahead means that you are able to fully fund July with income received in June. Follow the same prioritization sequence you used in the current month, budgeting until To be Budgeted is $0.00. Superbone If I could get "this person" to look at YNAB at all it would be a MIRACLE...But THAT is a whole different story. That's it, you've given every dollar a job! I described a workflow above you might find useful (the second case). Overview. It’s really hard to get a month ahead on expenses. I used to prioritize savings and never seemed to get a month ahead on budgeting. My question regards sinking funds, for those "emergencies" that should be planned for like a pet getting sick or needing to replace a broken cell phone. dakinemaui That is actually making a ton of sense (except of the existence of the TBB behavior that has been discuss ad nauseum here... :)) But I understand the idea. These helpful steps will walk you through setting up your budget template. In this budget, the happy new YNABer started mid month and came in just under the wire. The first workflow you outline applies to if you do not need any of the current month income *within* this same month. One month ahead was a game changer. If you categorize your Jan 15 and 30 paychecks as [Next Month], then on February 1 (or whenever you go to do your Feb budget) you would change the categorization to To Be Budgeted. Honestly, I would first try saving enough to get yourself 1 month ahead of your expenses. We will have about 6 - 8 weeks without income, Put it temporarily in a holding category until the end of the month. Neat. 6 of My Favorite YNAB Features. I would work on getting a month ahead on the budget first. We are officially retiring and moving to another state near the end of 2021. I do happen to overspend somewhere it makes the most sense to move from categories with leftovers to cover the overspending or have it come out of the INM category, right? They figured out how to make budgeting fun. The "not-recommended-for-beginners" aspect of my actual YNAB workflow: I have my next month entirely populated at the beginning of this month. At least $1000, then work on getting a month ahead. I'm currently trying to get a month ahead in my budget while also saving for an emergency fund. At the end of the month, switch to next month's area first, and move those funds into TBB in the new month. (I do not have my savings account linked but can if it is necessary). Give every dollar a job. Forest Green Commander I consider things like Electric to be True Expenses. One feature that seems slightly inadequate is YNAB’s 34-day free trial period. Because the nYNAB doesn't wall months off, the calculations happen as you release money - there's no difference except visibility. You have complete control over the number and names of categories, just as you would in a spreadsheet. Some expenses are fixed: utilities, rent, cable. You can see in the screenshot below I clicked ‘mortgage’ and can change it to ‘rent.’ Or, since I don’t pay HOA dues, I can click the trash can and get rid of that line. I know this is true well before the end of the month. (Is that a word?) It lets you highlight categories of interest and make them more visible at a glance (lock screen / widget.) Move Light exactly nails the rational for the "release on the last day" advice. This makes sense and excited to try it moving forward from here! For whatever reason, it never occurred to me to RECATEGORIZE the income transactions. Yeah, I know... easier said than done. Here's one description of specific workflows I would recommend (elsewhere in this thread) for both the fully and the partially buffered cases (i.e., when all or only some of this month's income can be sent to next month's budget). You have control over how you classify them too. Overspending should be covered immediately from the lowest priority category with funds. Don't leave anything in TBB or the Income Next Month category. , Follow YNAB to get support and lots of great ideas on budgeting. You deal with it on the budget screen. We get paid 1st/15th, so being able to completely fund the month when receiving the first paycheck feels great. Nope. Then on 1 Feb, you can "release" that money into your February budget but making a negative entry into the budgeted column for the category. They also offer a referral program that reduces the amount you pay for YNAB, and I’ll explain more about this further down in my YNAB review. When you release it in next month's (Oct) area with a negative budget entry, it doesn't show up in this month's (Sept.) TBB.