How to Create a Budget

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > How to Create a Budget

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

thebushcommander posted:

So I don't think I am using YNAB correctly, either that or I am a moron.

The numbers coming up in January 2014 for balance after budgeting are pretty staggering to say the least. Of course it could be accurate and since I spend money like it grows on trees it could just be the shock of seeing what could be.

Basically I am looking to build a house next year and need to get on saving, something I've never done before. Some how I just feel like I am missing one small thing with the budget and it's bugging me. I assume "available" to budget is what the total amount in all accounts are after whats been budgeted already, I think the difference between that and the balance is what's throwing me off.

Conversely to what PhantomOfTheCopier said, that's *exactly* how I use YNAB.
I picked this technique up off the YNAB forums, and it's working pretty well for me. I'm focusing on aggressively paying down credit card debt, and have been for about a year now.
I also bought my mom (70) a copy during the Steam Summer Sale, and I sat with her in a Google Hangout for a couple of hours while we did the basic setup for her, and then I used this same projecting technique to discover that she's a hundred dollars or so in the red every month, and needs to find a way to supplement her income, or reduce her expenses.
She's getting a roommate (Kathy, who is 68), and that'll turn mom's $121/mo deficit into a $339/mo surplus!

I've been in the same job for 11 years, and my income barely fluctuates at all.
I have YNAB account listed for Cash, and for my Checking Account.
In the Cash account, I have entered conservative inflow transactions for each payday from now through the start of January, 2014.

That allows me to do a projected budget:

And I can see that if I spend to my budget rather than to my account balance (like I've done for 10.5 of the 11 years I've had this job), I'll have all of my debt paid off (save one account) and have a full paycheck in my buffer by the time I turn 46 at the end of January.

When payday arrives, I go into my Cash Account, right click the transaction, select "Move to Account" -> (Chase Checking), then adjust the amount from the projected amount to the actual amount, then budget to zero.

To answer your "Available to Budget" question - that goes back to YNAB Rule #1 - Give Every Dollar a Job. You'll see that my budget gives every dollar a job, even if that job is to sit in my account and do nothing for a while (i.e. is assigned to the "buffer" category).
In your case, it sounds like you've got some "extra" money in your budget that you're currently blowing through every month by spending to your account balance.
If you assign those dollars to "Save for building a house next year", and spend to your budget, then you'll actually be able to build that house!
In addition, doing that sort of forecasting in YNAB motivates you by letting you clearly see what CAN BE, if you stick to your budget!

Kenny Rogers fucked around with this message at 03:33 on Aug 19, 2013

# ¿ Aug 19, 2013 03:19

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# ¿ May 2, 2024 22:55

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Rurutia posted:

Ok, is it just me, or does it really feel like most of the questions like this should be redirected? Only you can know what you want to consider it as. Do you use the funds from selling the records to reinvest in your collection or do you consider it income? As long as your budget balances, it doesn't matter. Do what makes the most sense to you and your life. Budgeting (YNAB) is a tool, fit the budget to your life, not the other way around.

This.
I'm a little lost at this part...

quote:

Would you budget that income as Income

As far as YNAB goes, you don't *have* a "budget" for "income" - you only have inflows to your accounts. The source is completely irrelevant.
Every dollar of inflow needs to have a job. You give a dollar a job by assigning it a Category in your Budget.

Given that, what you're really asking is something that only you can answer (like Rurutia said), and that is...
Generally speaking, do you (mentally, or actually):
* Consider your Vinyl money to be separate from all the other money you have, and you only spend it on other Vinyl Purchases or...
* Is it "just more money", and you routinely use Vinyl Money to buy gas/groceries/etc.

If the former, I think I'd categorize the Inflow as "Vinyl" when you enter the inflow into your PayPal account�, and just let the money ride in the "Vinyl" Budget Category from month to month. Alternately, I'd make an off-budget account, if you *never* spend the income you get from an Ebay sale on anything BUT more records. That's pretty unlikely, though.
If the latter, I think I'd categorize the Inflow as "Income for (This/Next) Month", and put X dollars in my Buffer, since it's "extra" money.

Both of those examples work for my life.
You'll probably (and likely *should*) do it a little differently, as suits the way you think about your record collection.

� You DO have your PayPal account set up as an additional account in YNAB, right? It gets inflows and outflows and transfers, and you can use the PayPal Debit card to spend the money you earned selling stuff on Ebay to go buy gas or groceries, so it should, in theory, be listed on budget.

Kenny Rogers fucked around with this message at 05:20 on Aug 22, 2013

# ¿ Aug 22, 2013 05:18

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Briantist posted:

Actually that's exactly what my method would do. By transferring $80 from your credit card to your cash account (both on-budget), you are not spending anything (which is accurate). According to the budget, you didn't buy anything; it's just like transferring money from one checking account to the other.

There is actually a problem with doing that.
Example:
I have $0 (nice and round).
You give me $100 in cash. (I inflow that to my "Cash" account in YNAB. So far, so good.)
I go to the dealer, and I buy $100 in methamphetamine and put it on my card. (Hey, it's a high tech dealer with Square or some poo poo, OK?)
I stop at the ATM on the way home and put the $100 in cash into my checking account, and do a transfer from "Cash" to "Checking" in YNAB.
I use that $100 to pay my credit card bill. That's a transfer from "Checking" to "Oceanic Airlines Platinum Miles Card" in YNAB.
You are correct that you're not actually spending money.

The issue that needs to be addressed is how to categorize the transaction from "Meth Hut" when it shows up on your Oceanic Airlines Platinum Miles Card statement.

I think that 100 Hogs Agree is doing the right thing by categorizing that outflow as "Reimbursement", rather than "Meth Hut" or "Identical Twin Uncle" or whatever. That way his *.QFX purchase records (based in reality) that he downloads from his bank and credit card and import into YNAB will all match up nicely with the transactions from YNAB, and reconciling is a cinch.
He didn't buy the methamphetamine for himself, and that $100 outflow shouldn't be reflected in the "Drugs and Medicinals" category for his budget, since he didn't spend any money in that category...for himself...and if he did include that, it would mess up his budget figures in months to come when he uses "Average outflows of the last 3 months" functionality.

Kenny Rogers fucked around with this message at 01:19 on Aug 23, 2013

# ¿ Aug 23, 2013 01:16

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

100 HOGS AGREE posted:

Hey man I never said meth.

New season of BrBa is on my mind. :v:

# ¿ Aug 24, 2013 17:15

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

HooKars posted:

Every dollar has to have a job. I had a wedding this month, a vacation, some birthdays - just a lot of odds and ends that I wasn't sure how much they were going to cost. I was about $500 too generous overall in those categories so I now have a lot of freed up cash this month that didn't actually go towards its assigned job. I could let them all roll over to those categories next month but it's not really necessary for me to have that much money in gifts and travel at the moment so I was planning on changing my August budgeted numbers to match my August spending and freeing up the $500. When most people do that, do you just move that money into savings and kind of take it out of the equation, in a sense? I've already budgeted for September but I could use that $500 to begin budgeting for October... do people generally like to have more than one month budgeted out or just one month ahead? I don't think it really matters but sometimes people feel things have a psychological advantage or they do things a particular way because they feel its beneficial in some way. Wasn't sure if anyone had any insight.

I'd (and DO) stick the extra dough from August in a category called "Buffer" - when you have a month's worth of expenses in that category, there are various methods you can use to transition that to having an actual buffer. Cross that bridge when you get there.

Re: One month or multiples...
Lots of people recommend you use YNAB "as designed" and only work with "from now until next payday", and not "until the end of the month" or even "this whole month".
As designed, you don't assign dollars to jobs until you have the cold hard cash in your hand.
There's a good reason for this - it's how you know you're not spending dollars you don't actually have in your account.

Now, it's been a few years since I've overdrawn, AND I've been using YNAB "properly" since March, so I feel comfortable using YNAB for medium range forecasting, since my income is also super stable.
I have added (fake, sort of) transactions to my "Cash" account that match the projected income that I'll receive from my paychecks. I date them for each payday.
I have the next few months budgeted out ahead of time (to the 03 January paycheck at this point), so I have projected what I can spend each month in each category.
On payday, I go into the "Cash" account, right click, and Move To -> Checking. I then adjust the dollar figure in the Inflow column to match the actual deposit amount, then adjust the jobs my dollars have a little bit to make the budget balance back to zero.
I've got some screenshots on how I do this a little further up in the thread. Shouldn't be hard to find.

Here's the official topic on the matter.

Kenny Rogers fucked around with this message at 02:38 on Aug 27, 2013

# ¿ Aug 27, 2013 02:30

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

HooKars posted:

Do you find having a general buffer category makes it easy to drawn upon that category when you're overbudget in another category?

Yes, but I'm super-aggressively paying down debt, and pulling from my buffer if I go over is (at this point) a better option than doing what I was doing last winter - I'd pay $350 down on the Barclay Card, run out of money the Tuesday before payday, then charge lunch and a tank of gas, eating up almost 1/3 of the progress I'd made for the month.

Now I have some money in the buffer, and if I overrun someplace and can't draw from another category (take $75 from Groceries and put it in Buy Lunch and Fuel and Consumables) which is my first choice, I'll take it from Buffer. It sets my goal of having a month's cash in the bank back a little bit, but it's an interest free loan from myself.
Once I have the CC Debt paid off (which looks like Mid-January at this breakneck pace), then all that newly-extra money will be split between Buffer and Savings.

quote:

I worry if I'm overbudget in groceries one month or something, it might be easier to pull from "buffer" than it is to pull from "Fun Money" "vacation savings" or even "October rent" -- like it kind of negates the purpose of every dollar having a job, and therefore a consequence from spending it. How big do you let your buffer get?

My goal is to let the buffer get to about $4000, then (per one of the methods I found in the YNAB forums) I'm going to enter a bogus $4000 outflow, categorized as "Buffer". My buffer will be zero at that point, and I'll have a 'hidden' $4000 in my checking account. It's not savings, it's not an emergency fund. It's my buffer.
You touched on it. Savings and Emergency Fund - neither of them are your Buffer, so there's not really a reason to have more than a month's worth.

# ¿ Aug 27, 2013 16:51

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Dantu posted:

Any reason YNAB gets all the love over mint.com?

Mint is a loving *phenomenal* tool for learning how you have been spending your money (note the emphasis on the past)
YNAB is a phenomenal tool for figuring out how you are and then will be spending your money - with an emphasis on TODAY and the future.

glug posted:

YNAB is on sale on steam for $15 now.

I think I'm going to buy two more copies to just keep in my inventory until I know someone who really would benefit. So far I bought it for myself, my GF, my mom, and a friend in Florida...it's just that good.

Kenny Rogers fucked around with this message at 22:29 on Aug 27, 2013

# ¿ Aug 27, 2013 22:25

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

PhantomOfTheCopier posted:

It seems that this should be impossible in a valid, complete budget. If your priority is to tighten expenses�, you cannot go over in a single expense category. You should budget ("plan") the credit card payoff period by allocating a fixed amount to that repayment monthly�. If you have leftover funds going into the next cycle, you could decide to reallocate that to debt repayment; for example, if you save $20 on gas this month because you skipped a longer trip, you could decide to use that $20 on the next month's CC overpayment at the expense of not having $20 extra sitting in fuel.

If you have an emergency buffer, it should be untouchable except in actual emergencies�. In the situation you describe, a pile of blow money seems... unnecessary, as it does not contribute to your personal goals for savings and net worth.

� My priority isn't to tighten expenses so much as pay down debt. It's also not my priority to allocate 100% of my "unnecessary" or "extra" income to paying down debt. $548/mo on $1700 total debt and minimum payments of $70/mo. is sufficiently aggressive, while still leaving me 200-300 wiggle room per month for 'fun things' and 'savings' so as to not hate myself. Sometimes, dining out counts as a 'fun thing', and I move money from one category to another.
� I do have a fixed repayment amount - $548/mo. I don't allocate 'leftover' funds to debt payments because the progress that I'm making is sufficient, without being so austere that I feel broke all the time. Even now, I'm making $66,500/year and I sometimes feel like, "Where the HELL is all my money going?". Then I remember, "Oh, yeah. Paying down debt. $1700 to go. drat, that feels good."
� It's not an emergency buffer. It's a YNAB buffer - I'm trying to pay down debt AND build up some reserve so that I'm living on last month's income. If I dip into the YNAB reserve because I went over in, say, Fuel and Consumables because it's a 5 week month, and YNAB deals poorly with anything but named months, I have unspent money in some categories (this month, it's groceries) that I can shuffle over to Fuel, and if I'm close to the wire on all the categories (indicating that I budgeted exceptionally well except for this one thing), I dip into my YNAB buffer to cover the difference, and I don't feel guilty doing so.
Once the debt is paid off (Mid January at this rate), the YNAB buffer (to August), then the Emergency Fund (to March '14), then the Investment Account (to February 2023, when I retire) will fill up with that $550/mo. that I'm paying off the credit cards with right now. And The Plan will definitely change as circumstances dictate over the next couple of years.

# ¿ Aug 28, 2013 06:49

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

I wouldn't say that 10% of your income toward debt repayment is a "breakneck pace", but at least you have a plan!

It's a tick more than 15% of net income, and a tick less than 40% of discretionary income. It's a sustainable pace. Fast enough that I'll be debt free within 18 months (from when I started, ~5 months to go!), but not so fast that (like I said) I feel like I'm astonishingly broke all the time, and can't afford *anything* that's not rent or groceries, etc.

# ¿ Aug 28, 2013 14:30

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

an skeleton posted:

So, I recently started at a new university that I expect to go to for 4-5 semesters before I graduate. Hopefully only 4, but definitely not more than 5 if I can help it. Anyway, after tuition and a couple of expenses, I have about ~$6,000 in loan money to last me for the semester.

I have budgeted at
code:
$1800 Rent (4 months)
+ $1200 food (4 months including eating out, so partially entertainment I guess)
+ $675 Books/Back-to-school expenses (glasses, haircut, books, this might be lower and does not account for selling back books)
+ $640 gas/travel 4 months (this one im not sure about, might be too high, maybe should lower it by investing in a bike...?)
+ $635 (fun, beer/dates, club dues, miscellaneous, emergency, hookers, jk)
= 4950 (if my calculations are right)
now 6000-4950 = 1050, so that's the difference. I have never made a budget before, hopefully this is someone accurate. All the loans I have taken out for this semester are federal or through a state program (Texas CAL loan) and so at the very least they are not private, even so they are still loans so I am considering sending back 1,000 immediately. It is also of note that I haven't really taken out very much in terms of loans before (only 3500), and it was a subsidized loan so it is not accruing interest. I am scared of budgeting wrong or being unprepared though, so maybe I should just hold onto it. Any opinions on my budget or what to do with the extra money?

edit: Also if it is of interest I expect to leave University with a Comp Sci degree and hopefully 1-2 internships + club/possibly a business fraternity membership and multiple independent projects under my belt, so I'm hoping that will justify about 35-40k in student loan debt, assuming I don't start chipping away at it in those 2 years.

I don't know if it's brilliant advice, or a dud, but were it my money, and if I knew now, what I wish I knew when I was in my 20s...

You're going to be paying back student loans for a LONG time. The $1000 extra is not really going to be a HUGE deal to your 35 year old self.

I'd take the full $6000.
Put $1500 in checking for this month.
Put $1500 each in 30, 60, 90 day Certificates of Deposit at your bank.
Grab YNAB off Steam for $15 and use that to budget $1240/mo each month, putting the other $260/mo. into an emergency fund savings account.

The CDs keep the money out of reach, but they mature Just In Time, so you *know* that you'll be able to pay rent and eat come December.
If you stick to your YNAB budget, on January 1st, you should have $1040 of your loan money in savings. At THAT point, if you feel like you've got a good handle on things, then you can pay it toward the loan.
It's best of both worlds. It can give you tremendous peace of mind that the money is there if you get hit by 100 HOGS AGREE's uncle's meth dealer. But it comes at a cost. That cost is paying interest on that $1000 for 4 months, so...what, $60 or something? Worth it in my book.

It's perhaps not an idealized use of every dollar, but it addresses your desire to get through to the end of the year without going broke in a big way.

Kenny Rogers fucked around with this message at 20:04 on Aug 28, 2013

# ¿ Aug 28, 2013 19:57

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

DirtyTalk posted:

So, this summer really demolished me in terms of finances. I have a spending problem, Im 23, earn a pretty decent salary, and have a girlfriend that is currently broke that I pay for everything for.

I really want to fix this before poo poo gets out of control.

I remember seeing that there was a Goon that provided a budgeting service. I tried to find it but I didn't come across it. Does anyone know what I'm talking about?

I agree. YNAB (even at full retail price) and this thread will get you started. If you miss the sale, You'll probably have the full $60 tucked safely back in your pocket by the end of September. If you don't miss the sale, you'll probably have the $60 tucked away by the end of next week.

# ¿ Aug 29, 2013 16:39

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

PhantomOfTheCopier posted:

You know, you can budget with a piece of paper and a pencil for gently caress's sake.

Tried that.
Tried spreadsheets, going all the way back to Excel '97.
I've been trying to get money under control since I started earning my own way.

quote:

At least 40% of posts in the previous two pages were about trying to get YNAB to work. Anyone who reads the last ten posts of any page in this thread should know of the obsession with it.

I'd say deservedly so. After trying pretty much every possible budgeting option available over the last 27 years, YNAB got my poo poo *completely* under control in 90 days.

# ¿ Aug 30, 2013 16:55

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

morcant posted:

...I think the combination of a paycheck right before the start of a new month...

A) Do you have enough money in your accounts (and your August Budget) to pay for whatever you might buy for the remainder of August?
B) If yes, did you then mark the inflow of the paycheck as "Income for September" in YNAB?

I ran into a rough spot when I first started using YNAB because I had a situation where I paid rent on the 1st of April and again on the 29th of April (for May).
The advice I got from the YNAB forums was to go ahead and use the real dates for the transactions (meaning I paid $2005 in rent in April) and budgeting $1002 for rent in May - even though I wouldn't actually pay that until the 29th. Then I got paid in early July, and so my budget looks like I didn't pay rent in June - because I paid rent FOR June, but not IN June. It looks wonky as hell, and makes my brain hurt when I think about it, but the numbers did actually smooth out and match up as time went on, just the way the folks in the YNAB forum said they would.

# ¿ Aug 31, 2013 02:39

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

skipdogg posted:

I'm guess you are living by yourself in a high cost of living area if you're dropping a net paycheck on housing every month.

The budget is a start, and I'm a big fan of the Misc. category but I still think you're missing some things. Mostly things that come with starting your own household. Household items and furnishings add up quickly.

Your electric/water bill budgeted amount is very low, as is your grocery. It's doable, but you're probably underestimating it a bit.

Bouncyman, if it's just the two of you on occasion, and you alone most of the time, a quarterly subscription to Mealime can help keep those grocery costs in line with your existing budget, as well as reduce your restaurant budget.
The awesome recipes they provide are *just right* for two people, when YOUR GIRLFRIEND is there, or just you with leftovers for lunch the next day.
When I'm ordering weekly groceries (delivery groceries available in my area *also* help keep the grocery bill from inexplicably climbing), I often find that I need to add stuff that's not on the mealime list just to make the $50 minimum order.

Kenny Rogers fucked around with this message at 22:57 on Sep 19, 2013

# ¿ Sep 19, 2013 22:54

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

How does it work if you cook for two like, always?

I work at the Denver Airport, so bringing lunch is a relatively huge hassle, so cool kids inc and I just make the recipes as written and I eat on the cheap at work for $2-7/day. She works at home, so there's plenty of regular lunch stuff to eat here.
It's perfect for two with no leftovers.

We've done a few that are *2, and those have worked out perfectly, too.

Kenny Rogers fucked around with this message at 00:56 on Sep 21, 2013

# ¿ Sep 21, 2013 00:53

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

This is Canada, and I haven't done it again since moving to Edmonton so the values are significantly different:
Chicken (~16/lb) (Canada is loving weird this way)

Seriously? I could probably FedEx you chicken on ice for less than that.

# ¿ Oct 9, 2013 01:47

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

When I was in high school, my friend's dad made a good side living selling illicit cheese, chicken and marijuana out of his basement.

I've come to the conclusion that your fine nation has been misspelling your national anthem for all these years...
It can't possibly be "O Canada!" :canada:

It's got to be "Oh, Canada!" :gonk:

What I wouldn't give to live someplace that was English accents, Australian cars, New Zealand scenery, Canadian sensibilities, and American pricing...

In budgeting news, the GF and I got moved into our new place, and split our Need categories (Rent, groceries, etc.) by our relative incomes (currently about 75/25 - she makes way less, but gets to do it from home. Totally jealous of Pantsless Tuesdays, actually) which freed up another $500/mo from "my" budget (we use separate instances of YNAB) to pay down debt faster. This makes me do a little happy dance.

Kenny Rogers fucked around with this message at 05:45 on Oct 9, 2013

# ¿ Oct 9, 2013 05:41

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

It's not really an emergency, so it doesn't feel accurate to put it in the emergency fund line. It's also not a car insurance payment, so yeah. Should I have a specific deductible category that I save into in the future as a sort of car-specific e-fund?

I'd categorize it as "Car Repair", which is where I budget all my regular maintenance items - 1/60th of a 5-year battery, 1/18th of a set of tires, wiper blades, oil changes, Car wash/detail supplies. Since you probably don't have (or haven't been using) that category so far, initially, you'll be over-budget in that category. Shuffle budget money around to cover what you can this month, and add funds to that category over the next while to 'catch it up' to zero, and then have money going in for maintenance items going forward. It really eases the pain when replacing a set of runflat tires can be $800+.

(YNAB: Let it be red, and click the red to "arrow it forward" to next month's budget, instead of subtracting from your overall budget next month)

# ¿ Oct 13, 2013 17:58

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

100 HOGS AGREE posted:

Yeah that seems dumb. Why would you calculate spending based on money that isn't yours to spend?

It's kind of a common edge case, but it'd be similar for child support payments with a low wage earner non-custodial parent, too.
In many jurisdictions, the first X number of dollars of gross wages are essentially exempt from being taken for child support because there is a minimum amount that the jurisdiction considers to be "how much you need to live, so you can pay child support".
Unfortunately, that floor is generally only updated to state a specific dollar amount, and isn't stated as being something sensical that keeps up with inflation and changing times like, a positive fraction (140%, say) of the national poverty level.

# ¿ Oct 15, 2013 16:31

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Schiavona posted:

Quick question for someone who knows Mint pretty well.

I just started using it today. I have a certain amount of money taken out of my paycheck every period and put into a separate savings account, but there doesn't seem to be a way to put that into Mint so it doesn't show up as available income, but shows up on the graph of where my money goes. Am I missing something, or is this feature somehow not in Mint?

I presume you've got both accounts in Mint.
I don't think it works quite the way you're hoping. I found that moving money from account to account made the money 'disappear' - i.e. it never showed up in the graphs as "You 'spent' $150 this month on 'savings'. It just showed the transactions, and the savings account balance getting larger.

That sense of "vanishing money" is one of the reasons that I ultimately ditched using Mint for YNAB.

# ¿ Nov 14, 2013 00:17

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Mercaptopropyl posted:

Just missed the YNAB sale, oh well.

Delving a little bit further into 'smart money management', and a little bit into silly money evangelism (disclaimer: stupid buzzwords ahead)...

What's the expected value of YNAB to you?
For me? I've been able to throw several thousand dollars at debt that has saved me many hundreds of dollars in interest, so buying YNAB at full price was actually +EV for me.

# ¿ Dec 3, 2013 16:17

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

100 HOGS AGREE posted:

I swear too, everyone who posts in here lately makes like twice the money I do sometimes it infuriates me I need to get a better job.

It's not all roses.
I, in turn, make roughly twice what Celot makes, and face a lot of the same dilemmas.
This is partly because I didn't get a good, solid financial education 20 or 25 years ago, so when I started making decent money for the first time EVER (way back in 1998) my expenses naturally expanded to fill 100% of my available income, and it's stayed that way.

# ¿ Dec 8, 2013 19:03

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

razz posted:

I never understand why people say renting is throwing away money. You're exchanging money for a place to live, you're not exchanging money for nothing. Do people just believe this because they don't have some tangible item in their hands after they make a rent payment or what? It's like being mad at a hamburger you bought for not still being there after you ate it because you paid for it so therefore you should still have it. Is this just successful marketing by real estate agents or what? If you get a $100,000 mortgage loan, by the time you pay it off you'll have paid ~$175,000 because of interest.

http://www.myamortizationchart.com/30-year/100000-dollars/4_25-percent/

How is that not throwing away money? I mean, that is literally throwing away money, you're giving almost the entire value of your house to the bank for the convenience of being able to make monthly payments. I'm in no way saying renting is always better than buying, it's totally unique to each person's situation. I just think it's crazy that so many people think buying MUST be better financially when for a lot of cases, renting for a while would actually save a lot of money.

Everything is throwing away money. Every dollar you spend on literally anything is throwing money away.

Conversely, if you took the money you'd pay in interest over the life of the loan (because it's late, and gently caress trying to figure this poo poo out on a month by month basis, OR account for the fact that you frontload most of your interest payments in a mortgage), which works out to a couple hundred bucks a month over that 30 years, and invested it at the same rate you'd pay the bank...some magic poo poo happens.

Kenny Rogers fucked around with this message at 09:24 on Dec 11, 2013

# ¿ Dec 11, 2013 09:22

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

ntan1 posted:

As for buying a house, there are tax advantages...

I'm not buying this as being the +EV (expected value) transaction that everyone seems to want to believe.
Why?
Let's look at the numbers.

At the Federal level you get a deduction for the amount of interest you paid on your home.

Using this example from earlier again:
http://www.myamortizationchart.com/30-year/100000-dollars/4_25-percent/

The first year you own your home, you pay $4,217.41 in interest.
If you itemize, you can deduct that $4217.41. (There are some variables that can change this number, but for most people, that would be very close to the number.)
However, the Standard Deduction is $6100, so you need to dig up another $1882 in deductions before you derive any tax benefit from your home thus far.
If you're young, or healthy, or both, we hope that it's unlikely that you've also had a couple grand worth of medical bills the same year that you can tack on to raise that deduction to over $6100.

You don't get 100% of the value of the deduction back, it lowers your taxable income by that amount.

So,
If you made 40k (taxable, after all other deductions), your taxes are $6036.
If you made 40k (taxable, after all other deductions) and are able to additionally deduct your interest payments, your taxable income is $35783, and your taxes are $4974.

It appears that the Estimated Value of this tax 'advantage' is -$3155.41 for this year, the year you will pay the most interest, and therefore get the largest deduction.

To be fair, you can often deduct property tax, on some level, as well, but it works the same way - lowering your taxable income by some percent.
Let's presume you live in a super high tax place, and they levy a full 1% in property tax per year, so you can deduct an additional $1000.

You paid $5217 in interest and in property taxes, which you can deduct.
Taxes on $34,783 are $4789.
Presuming you itemize, the Expected Value of the tax 'advantage' after accounting for two home ownership deductions is -$2970.41

This may or may not be where my logic goes off the rails, but it seems to me that in this case you could (in theory) rent a place that costs $939.47/mo� and 'break even', before you even account for the Cost of poo poo That Broke This Year, playing My Little Tim Taylor with your new home, or Dammit, I Forgot Had To Buy A Lawnmower. And A Weedeater. And a Compressor to Blow Out The Sprinklers. poo poo. poo poo. poo poo.

� This is based on your -$2970/yr 'tax advantage' spread over 12 mo. added to your $491.94 Mortgage Payment and another $200/mo. for PMI, HOA, whatever utilities are separate, etc, in this case.

Kenny Rogers fucked around with this message at 20:49 on Dec 12, 2013

# ¿ Dec 12, 2013 17:41

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

ntan1 posted:

Dude, lots of people itemize. You're trying way too hard to generalize, when the situation often depends on person.

Fair point.
Let's assume you *do* have >=$882 in other deductions� beyond your Mortgage Interest and Property Tax so you can itemize to at least $6100.

You pay $4217.41 in interest and $1000 (1% of the fictional $100,000 property we've been using as an example) Property Tax during the first year of your mortgage.
At tax time, itemize $4217 in Mortgage Interest, $1000 in Property Tax, and $884 in Charitable Contribution deductions for a total itemized deduction of $6101.

Presuming (as we did before) that you grossed $40k (taxable) last year.
Your taxes would have been $6036 with no deductions at all, but the $6101 itemization lowers your taxable to $33,899, and you're taxed $4654 on that.

After your interest, tax, and charity deductions, you saved $1382. Awesome, right? You finish up with your e-file on TurboTax, click the button, and you'll get a nice refund direct deposited to your account in 3-4 weeks! Yay!

But you spent $5217.41 to get that check.

And even though you've crossed the $6101 "makes sense to itemize" line, unless you can itemize $31,800 worth of deductions�, you're still going to spend more in interest than you save from the 'tax advantage'.

There are a LOT of reasons to buy a house. It appears that the "tax advantage" is pretty clearly not one of them.

� Mortgage interest, state & local taxes, property tax and charitable contributions are the most common reasons that make it make sense to itemize.
� In order to break even between the $5217 you paid out this year in Property Taxes and Interest on your home, you need to pay at least $5217 less in taxes when compared to having no deductions at all (even the Standard Deduction. If you include the Standard Deduction, the thought of "recouping" your Interest and Property Tax payments goes from being "ridiculous" to "completely impossible". But we'll play with it just to see anyway.)

$6036 (tax) - $5217 (PT&I) = $820 is the max you can pay in tax to not lose money. Look up $820 on the tax table, and you have to have <= $8200 "post-deductions" taxable income, for which you'll pay $818 in tax, and come out two bucks in the black. $40,000 actual - $8200 "target" = $31,800 in required deductions to hit your target.

Kenny Rogers fucked around with this message at 01:07 on Dec 13, 2013

# ¿ Dec 12, 2013 23:18

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Pinball posted:

I forgot to mention that my mother, being annoyingly stubborn, continues to give me 225 dollars every month...but I feel guilty taking money from her she could be using for her and my father's retirement.

Accept it gracefully, and remember to include in your future budget a payment from you to them for their retirement once you've transitioned from "school" to "career".
Making sure you have their back when they've transitioned from "career" to "retirement" is pretty much the best possible way to show how much you appreciate everything they've done for you over the years.

# ¿ Jan 3, 2014 18:10

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

PhantomOfTheCopier posted:

I'm willing to go as far as admitting that I clearly don't "get it".

And you probably won't *ever* get it because you've apparently got your poo poo figured out, and were successful enough on your earliest attempt to do so that you've fallen into the Curse of Knowledge cognitive bias - since it was easy (enough) for you, this "budgeting" thing should be (or is) easy enough for Joe and Jane Average, even though your thread is chock full of Joe and Jane Averages who continue to beat the drum of "Budgeting was REALLY HARD for me, but this software totally revolutionized my understanding of budgeting".

YNAB is approachable and accessible the way custom spreadsheets (and the other tools you're comfortable with) are generally *not*. There is a ton of evidence that people in this thread (myself included) who tried it your (favorite) way, and failed, and failed, and failed, and failed, and eventually gave up and finally just went back to spending to the bank account.

Consider YNAB to be the World of Warcraft for Budgeting Software. Sure, there are "better" versions of both, but YNAB and WoW remain exceptionally accessible to people with no experience, or who had terrible experiences in the past. They both ensure a low barrier to entry and a shallow learning curve. They both have new users who ask silly questions like "How do I account for..." or "How I mine fish?", and they both have decent communities that are, generally speaking, helpful and welcoming to new users.

But (to extend the metaphor) you can't understand why *anyone* would *ever* play WoW, when they could come play EvE instead.

Kenny Rogers fucked around with this message at 01:16 on Jan 18, 2014

# ¿ Jan 18, 2014 01:05

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

PhantomOfTheCopier posted:

No offense, but "Click here for the magic $15 solution to your self-control issues!" seems pretty condescending to me.

That's the spot where you just don't get it.

You are mistakenly ascribing generalized self-control issues, when that's not even remotely the actual problem at all.

# ¿ Jan 18, 2014 01:18

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

PhantomOfTheCopier posted:

Albert Einstein, �On the Method of Theoretical Physics,� the Herbert Spencer Lecture, Oxford, June 10, 1933 posted:

It can scarcely be denied that the supreme goal of all theory is to make the irreducible basic elements as simple and as few as possible without having to surrender the adequate representation of a single datum of experience.

This comes down to us today as the 'Einstein quote' - Everything should be made as simple as possible, and no simpler.

YNAB isn't any sort of 'magic bullet' (nothing is), but it *is* (for many, many of the people that tout its virtues in this here thread) the simplest possible solution, without oversimplifying the matter.

As I mentioned earlier today, it's a software package that comes with an extensive collection of casual, user-friendly tutorial videos that work well for a very broad audience, and an active, large, and supportive user community, who can (and do!) help new users get their feet under them fairly easily, and with a minimum of fuss, which allows the new user to get a gigantic dopamine hit when they 'win' at the task they've undertaken early on in the process. This is important.
This early (and comparatively EASY) success leads to the user undertaking further efforts, which leads to more success, which ultimately gets the new user hooked on good financial practices. Isn't that the goal here, anyway? Are we here to Create Actual Working Budgets, or are we here to Have Rational Discourse About Budgeting Methods To Determine Which Is Most Superior?

I won't argue that there may be better tools. I won't argue that there are tools you like better. I won't argue that the thread tends to present a "Start here, with this specific thing" mentality for all new posters.
There is, however, a drat good reason for that.

I will argue that it's unlikely that a person strays into this thread without at least taking a rudimentary stab at SOME kind of budgeting (even if it's Spend To The Bank Account Balance) before arriving here.
I would suggest that a significant number of people (but *not* 100%) who stray into this thread have already had *several* failed attempts at budgeting already. Ease of Use is the #1 predictor of success for these folks. They've already tried the "traditional" methods, and failed - often more than once. (I'm very, very much in that category)

For large numbers of people, YNAB presents the lowest total combination of barrier to entry + non-steep learning curve + easy recovery from noob mistakes + 'social knowledge base' for questions out of the current crop of methods and tools that are commonly available today. That low threshold for success means that more people will succeed using that method, which translates to a larger number of people posting in this thread who have been successful using YNAB versus other methods. It naturally and logically flows from there that YNAB will be the most widely recommended tool in this thread.

Conversely, it's also the most widely recommended tool in this thread because the greatest number of people in this thread are achieving their goals with a minimum of fuss using YNAB.

There are a huge number of methods with which to do financial planning. One of them makes it the easiest to succeed in changing your habits. That one gets recommended the most. Because it's the the one that's been most successful in helping people change their habits. It's a self-sustaining circle.

Have I come at the reasons why YNAB is so popular (and is recommended so frequently) from a sufficient number of angles that it's clear yet?

quote:

...I believe it will actually cause harm in some cases because it discourages prudent planning and encourages shuffling around money on a whim�.

Maybe then they'll realize that a little effort on their part was worth more than $15 would have gotten them�.

I have more to say on this, but it's after midnight, and I seem to have run out of give a poo poo for the night.
In brief:
� The YNAB philosophy doesn't encourage 'shuffling around money on a whim' so much as it acknowledges that poo poo Happens In Life and It's Not The End Of The World When It Does.
� You seem really rigid and stereotypical in your characterizations of people, like there's only One True Path�, one set of personal circumstances, or personal preference and little to no room for individuation. Your message is clear, "Just loving Bootstrap yourself, bitch!", with no allowance that people have already tried that in the past, or that perhaps they don't feel like they know enough about the subject to take on, say, a blank spreadsheet approach, and so that's a hugely intimidating hump to get over. Instead, you just pile huge loads of hate and scorn on a method that has worked for a TON of people in this thread, without the acknowledgement that, "hey, it's not for me, but it loving works for a fuckton of people...so there's that..."
I don't like this approach, and I suspect neither do a great many other people in this thread.
� This is VERY different than the broad-but-not-universal recommendation for a product that a great number of people have had proven success with.

Kenny Rogers fucked around with this message at 18:20 on Jan 18, 2014

# ¿ Jan 18, 2014 07:38

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

Get a car loan again? Hahahaha!

I have been considering just saving the old payment amount until I need it, so it's like the car payment never stopped but now it makes me more wealthy, in a way!

This. You've already got the money budgeted, so you'll have no significant lifestyle changes for better or worse, just the same 'ol, same 'ol - until the day your paid off car finally does that thing that older cars eventually do - leave you stranded and pissed off - and then (after you repair the thing that left you stranded), voila, you've got 10 grand CASH in the bank, PLUS the value of the outgoing car!

# ¿ Feb 4, 2014 00:38

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

Henrik Zetterberg posted:

Does this mean that every transaction has to be manually entered? There's no automatic updates like Mint? That sounds pretty... time-consuming if you have multiple accounts.

Don't listen to the knuckleheads that are telling you YNAB is an all manual process, it's for getting a better handle on your money, etc.
Like Sigma_X said, YNAB can ingest several types of financial data.
I download QFX files from my bank twice a week (Tuesdays and Fridays) and reconcile, and from my other accounts monthly. I have the YNAB application on my phone, but even entering transactions in that is frequently (but not always!) more overhead than I have time for when I'm not home. I *do* open the app to remind myself what my approximate budget in this category is for the next few days (from Tuesday to Friday, or vice versa) so my budget is in the forefront of my mind, but I only enter what is convenient for me, and let the next QFX download catch the rest.

Kenny Rogers fucked around with this message at 22:59 on Feb 10, 2014

# ¿ Feb 10, 2014 22:56

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# ¿ May 2, 2024 22:55

Kenny Rogers: Sep 7, 2007; Chapter One:
When I first saw Sparky, he reminded me of my favorite comb. He was missing a lot of teeth.

tuyop posted:

Whatever works man, but the manual entry is an explicit part of their method. That's all we're saying.

Downloading transactions frequently is still a manual process, it's just not *repetitively* manual.
As for keeping close to your transactions, I see it as mostly the difference between a knife fight (manual entry of every transaction), a rifle (frequent manual download and ingest of QFX records) and a Drone strike from Nellis AFB (Mint's default ex post facto recording and categorization).

That said, I'm moving to the YNAB thread for topicality and because Phantom of the Copier is kind of a terrible OP who likes (IMHO) to browbeat (also IMHO) people who disagree with him and/or his methods.
The rest of you?

Thanks for all the help and awesome discussion!

# ¿ Feb 12, 2014 19:45

The Something Awful Forums > Discussion > Ask/Tell > Business, Finance, and Careers > How to Create a Budget