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This is just personal preference, but I don't like recording found money as income. I'd log the transaction as income, but give it a category. That way it doesn't show up as income for the month, it just affects the balance of the line item. You could even create an "Uncle" category and isolate it all there, so that when you make reports, you can easily remove it from the equation.
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Aug 23, 2013 22:38
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| # ¿ May 2, 2024 20:42 |
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When I was sporadically employed and not saving at all, I "gave every dollar a job" several months into the future using money I had already earned. This let me know how long I could survive at my current standard of living if the work dried up immediately, and gave me a good visual of my progress. Letting a category roll over didn't matter so much, because I'd adjust future months to give myself the same living expenses and extend my lifespan. Now that work is more steady and I'm putting into savings and long-term goals, I'm budgeting a month ahead, and anything extra goes to a buffer category. I over-estimate the monthly bills, and zero out once they're paid, which gives me wiggle room for other categories (or I can just dump the overage into the buffer category). I have one cardinal rule: DO NOT TAKE FROM THE SAVINGS OR BUFFER. Over-spending on groceries or buying extra concert tickets doesn't count as an emergency or life-altering situation. These are choices I've made, so the money comes out of other categories. No exceptions. I borrow from next month's regular budget before I touch the savings or buffer (and I really try not to do that, either). The categories that roll over are the "quality of life" categories like vacations and camping and clothing and the like. This allows me to take from them if I over-spend on another line item, because there's usually something hanging around. If I spend too much on restaurants, then I can take it out of my music fund. The only "monthly consumables" expense I roll over is the cat fund, so that I have something for emergency vet visits. I don't know if this is how you're "supposed" to do it, but it works for me. YNAB can be fairly powerful and flexible for what it is. Long-term future projection not so much, but daily maintenance and analysis of past spending is great. Old Fart fucked around with this message at 13:00 on Aug 27, 2013 |
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Aug 27, 2013 12:57
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I don't keep track of cash spending. I do have a cash "account" because part of my income is cash, but I treat it like my banking accounts. I keep it put away in my apartment, not in my wallet. It generally only has four transactions: deposit, change for laundry, transfer to checking, and withdrawal. Withdrawals are taken out of the "personal allowance" budget line item. If I spend it on food, baseball cards, or hookers & blow, it doesn't matter, because it's mine to do with as I please. It was already accounted for as a lump allowance payment. Everything else is debit or credit, and budgeted accordingly.
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Aug 28, 2013 03:32
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It's a good point about it being a tool designed specifically for this job. It's not the only solution, but for me at least, it's what finally worked. I wouldn't want to go back to pen and paper. And my finances sadly aren't robust enough for me to need to create custom spreadsheets. But they're much stronger than they were when I was trying to do it myself. Budgeting didn't really "click" for me until I used YNAB and read up on their process. I had previously used spreadsheets and the like. While there are other ways to learn these lessons, YNAB helped me learn how not to spend to the bank account. I now know that it works much like the envelope method, but a lot easier to manage if you primarily use electronic funds. I also quite enjoy the ease and interactivity of the reports.
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Sep 4, 2013 00:23
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Omne posted:So what does everyone do with the leftover dollars and cents in a given category? Say you budget $150 for cable, but it's actually $148.75. Do you just leave the $1.25 in that category, or move it into a buffer? For monthly bills, I zero them out and add the extra to my buffer category. For things like medical expenses or consumables, I usually carry them over to build a bit of a fund. But sometimes I zero those out too, because long term savings is awesome.
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Sep 21, 2013 08:53
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Dantu posted:One thing in YNAB that I'm struggling is why transfers can't have a category. I hate that I can't move $25 into my savings account and say it's for my emergency fund without getting errors. Every dollar has a job. If you're putting $25 into emergency, where was it before? The account where you keep it doesn't really matter. Transfer the money without a category. Then, in your budget, subtract $25 from one line item, and add $25 to your emergency line item.
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Sep 24, 2013 01:54
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Dantu posted:Before, it was in my checking account. I kind of get that it doesn't matter where "where" it is to YNAB, but it does to me, I want it to be in my savings account (which is on budget). What I mean, is where was the $25 allocated in your budget? Every dollar has a job. You don't assign transfers to categories, because they have no effect on your net worth, or on your budget. If you're moving $25 to your emergency fund, it should be noted as such in your budget, not in your register. That's where you categorize it, not when you move the money from one account to another. For example, part of my income is in tips. That money gets budgeted at the beginning of the month. If after a few weeks I deposit a lump of cash into my savings account, that doesn't affect the budget at all. My emergency fund budget line item doesn't care where I physically keep the money. Make sense? Old Fart fucked around with this message at 17:58 on Sep 24, 2013 |
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Sep 24, 2013 17:55
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YNAB is very good for helping you save more. If you're budgeting money you don't yet have, then you're not living on last month's income. I recommend getting to that stage. That way at the beginning of the month, you know exactly what you have to spend, and you already have the money for it. I also budget for the following month. I have an idea of what I'll earn, and as my paychecks come in, the number in red gets smaller. So I always know how much more I need to make this month to be able to keep my proposed budget for next month.
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Dec 13, 2013 21:27
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PhantomOfTheCopier posted:Can one do that easily in YNAB, or would you have to create separate things for each savings category? I'm not sure what you mean by "separate things". But yeah, you can have multiple accounts, and keep them on or off budget. If your accounts are on-budget, then it makes no difference where you put the money. You merely budget into a savings category every month and let the number grow. The actual money is part of the same giant pool with everything else, even if it's spread over five accounts. As you said, you need to live to your budget and not your bank account. If your savings accounts are off-budget, then as tuyop said, they're treated as expenses. You still create a budget category (just as you would for mortgage or groceries), then when you make a payment, it comes out of the budget for that category. It's really the same thing, just keeping it off-budget requires an additional step of "paying" the money to a specific off-budget account.
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Dec 22, 2013 05:42
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PhantomOfTheCopier posted:I guess I find this to be... slightly disingenuous maybe. I believe it does make a difference where the money is recorded, solely on the grounds that I know more people that will flippantly spend from the "giant pool" than I do that can save that way. It seems like more would be successful with savings goals if they put, say, $650 toward rent each month even though rent was only $600. I'd much rather know that "rent and groceries" are six months ahead than seeing that I have "about 2.5 times my monthly income sitting in a pool". I agree, some folks would be bad with the giant pool. I'm a little shocked myself that I adapted quickly to it. The beauty of YNAB for me is that it can be used many ways. A couple of years ago, when I was intermittently employed, I actually budgeted several months in advance so I knew how far my cushion extended. I didn't put $650 every month, I just filled in $600 for six months down the line. It worked well for my situation. YNAB was very clear when the money would run out, in bright numbers at the top of the month. "If work ends today, I'm good for three and a half months." It helped me get disciplined and make my money work for me. Every month the red zone got further away. You can also do as you suggest, and just budget a little more per category, and let it roll over. I did that for a while, but I found it didn't work well for me. I was too tempted to cheat, and it messed with my OCD tendencies. At this point I have enough in the "savings" category that I don't worry about it at all. At the end of the month I take all the income from that month, and use it to create my budget for the following month. More than anything else, getting a month ahead has made my life much easier, and I've saved more than ever. That's one of the primary goals of the YNAB system. PhantomOfTheCopier posted:It sounds like tracking this per account requires a second set of external things, plus an extra step for each of them. I guess I say "thing" because... well, to be frank, when I read YNAB stuff I really have no idea what they mean when they use the word 'budget' as they seem to use it to mean pretty much anything and everything. They got a little "budget" happy. I'm not sure what you mean by tracking per account. If you want to allocate $650 every month for rent, it doesn't matter where the money lives in your bank accounts. You type a number and you're done. Or if you want to budget 25% of your income to emergency fund, again just type the number in that category. It couldn't be any easier. If you don't trust yourself to keep that money assigned in your budget and instead want to keep it in a separate physical bank account, then that's easy too. You just "pay" to that account the way you would your phone bill. It sounds like maybe you have some questions about how it works. I'd be happy to try to answer any of them.
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Dec 22, 2013 18:25
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Regarding taking from a savings category... If you want to track it a bit more than simply putting a negative in the budget, you can also do this: pay yourself from that category, which allows you to put a note. The put it right back as an inflow in another category, the same way you would when reimbursed for something. Or you can even create a payee for the transactions. Does that make sense? For example, if you need to dip into savings for a medical cost, you can "pay" to "medical emergency" from the savings category, then "receive" from "medical emergency" into the medical category. It allows a bit more tracking than just juggling numbers in the monthly budget. I spent a while massaging categories, finally have something I like. I have four master categories: Monthly Bills, Monthly Consumables, Quality of Life, and Long Term Savings. Bills are just that, Consumables are groceries, clothes, personal maintenance, etc. Quality of Life includes blow money, entertainment, vacations. Savings includes retirement and baby savings, but also bigger ticket items such as furniture, saving for a car, etc. So there's some crossover between the last two categories, but I view Quality of Life as non-tangible feel-good stuff, and Savings as larger goals.
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Dec 23, 2013 01:59
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100 HOGS AGREE posted:What I would do if I were in your situation is buy YNAB (because I am a shameless shill for it and it is on sale for $15 dollars until tomorrow on Steam) put in all your accounts, allocate all that money you have right now into a Savings category and then subtract from that category a set amount every month to live off of. Go ahead and budget out the entire year if you want and watch how fast your money drops. Fully agree. I was in a similar situation, where I had a lump sum and a part-time job. I budgeted out for months in advance. This let me know exactly when the money was going to run out, and showed me how much my spending was affecting this. It was also nice to see the red line move away from me, rather than me catching up to it. I honestly can't think of an easier way to accomplish this. The software is very flexible and gives you exactly the information you want. There's no stress in wondering how long you can last, or how much you can afford to spend. It's all right there in front of you.
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Jan 3, 2014 19:29
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We get it, POTC. You hate YNAB, and you have disdain for people who don't think the way you do. As with tuyop, it helped me understand the envelope system before I even knew what that was. And it got me to stop looking at the bank balance far better than spreadsheets ever did, although even that took up to a year of use before that switch happened. I also wonder why I was so stupid and didn't have that lightbulb moment years or decades sooner, but there you have it. Being raised and living in a culture of debt, I just never had any cash beyond the current paycheck, and credit cards were seen as what I could afford as a monthly payment. That can take quite a while to un-do in your brain, and YNAB is very good and user-friendly with leading you there. The more you trash YNAB, the more people will defend it. In a way, you are their biggest advocate. 
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Jan 17, 2014 17:16
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FWIW, PoC, I find your posts generally informed and helpful. While I think you have a sore spot for YNAB, I don't think you deserved the recent harsh criticism that seemed to come from nowhere. Your categorization is interesting. I think we do the Bingo approach, but we budget long-term savings first, as a percentage. And since we're not drowning in debt, it's easy to roll with punches. But you're right that discipline takes a bit of a back seat. I wonder how well a percentage approach works in a multi-family household? I think that approach might have the best environment for success when it's one person practicing the discipline. I feel things become a bit more difficult when a budget is being pulled on from multiple directions, and a combination of approaches may be warranted to ensure it doesn't collapse under the weight. Thoughts?
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Feb 15, 2014 22:49
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I have a "Small Trips" category I use for that.
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Apr 27, 2014 16:11
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| # ¿ May 2, 2024 20:42 |
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If you can, 100% down payment.
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Oct 6, 2014 04:24
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