You need a budget (YNAB) advice thread

FireWyrm · 30 July 2014 at 12:25PM

edinburghlad wrote: »

Now to find the $60 to pay for it.

Now, I wouldnt be a DFW if I let you go pay full price, now would I.

Use this link to get 10% off : http://investorjunkie.com/15562/ynab-you-need-a-budget-review/

here's a whole page of discount links : http://forum.mrmoneymustache.com/reader-recommendations/43-discount-off-ynab/

Sadly, Steam is still £29.99, but still 10% is 10%.

I understand that they give away a free copy to a webinar attendee after every session, might be worth a punt, you might be lucky.

Giraffeseeker · 30 July 2014 at 3:49PM

Welcome to the wonderful, amazing world of YNAB, edinburghlad!

I added my "bad" debts (credit cards I am paying off and two personal loans) as "off budget" accounts and then each month I simply do a transfer from my current account to them for the amount I pay off each month. I have this set as a recurring transfer so I just have to approve it each month, sometimes adjusting it if I manage a larger payment.

In each of these debt accounts which are interest bearing I then have a recurring transaction for the approximate amount of interest, and this is set for the date the statement usually arrives. I don't approve the interest transaction until the statement is in my hand and I adjust the amount to exact interest figure from the statement.

I paid one of the 5 debt accounts off last week and when I rang to get a final figure, the amount they quoted me was exactly the same as the figure I had, plus 69p interest, so my calculations were spot on.

I don't spend on any of these accounts. I have one credit card which is "on budget" because I do spend from this. When I set up YNAB it was carrying around £300 of debt but I quickly paid that off and now I only use it occasionally to keep it active, and then pay it off in full.

YNAB is amazing. In February, the day before payday I was -£200 in my current account (up to my limit) and -£300 on my credit card (plus my other big debts). Today, just 5 months on, it is the day before payday and my account stands at just over £2,000. Happy days :-)

Good luck

Karen777 · 30 July 2014 at 4:04PM

Hiya. I am a recent YNAB convert/ obsessive. You get sent a link to the webinars if you can't watch them live so don't worry about time. I have been doing that and found it really useful. I have my debts as pre-YNAB debts as accounts. I also have debt payments budgeted in a debt category and then if I can pay a bit more I would just increase the amount I budgeted for them so they match the outflow - as if I have spent more than expected in any other section (as the money has to come from somewhere else in my budget - e.g. an underspend on groceries). I don't think that's quite how they suggested doing it in the webinar but it works for me so far!

edpvito · 30 July 2014 at 4:08PM

I have found YNAB a really impressive piece of software. It takes some getting used to but its a pleasure to use and when I spend some money I actually look forward to putting it into YNAB. I find a couple of things a bit confusing, the debt issue, as discussed is offputting and Im not sure whether I should be counting debt in my budget - which means I am virtually automatically over budget. I also dont like not being able to choose arbitrary dates as my budget period. I get paid on the 28th and therefore surely my budget month runs from the 28th to the 28th, otherwise I have nothing to spend after the 31st from my pay! Im sure this is something that can be passed into the next month if you havent spent it but I havent got that far in my understanding. At the moment I have changed the pay date manually to the 1st of August and every transaction I have made since the 28th I have manually altered to the 1st August so that I know where I am with August's money. That seems logical to me that I am paid to feed and water me during August at the end of July and my costs come from that amount at the end of July and throughout most of August. Another thing that I cant quite figure out is that if i take out cash, say £50, thats a transaction - 'payment to cash', my YNAB balance is obviously £50 less. However I wish to record what I spend with that £50 - £10 groceries, £8 booze etc. - and that would obviously count as if I was spending the same money twice. I decided to not record the cash withdrawal but then that means my actual bank balance doesnt tally with my YNAB balance, so its not really reflective of reality unless I added another account 'In my pocket' and added transactions to that 'account' - which seems a bit excessive. The debt stuff is quite confusing, I paid £200 off my credit card - which was a transfer from one budget account to another...I cant quite fathom what the pre-ynab sections should be saying in the budget...

FireWyrm · 30 July 2014 at 4:34PM

OK, there are a number of options and issues here. Lets take them in order.

edpvito wrote: »

I find a couple of things a bit confusing, the debt issue, as discussed is offputting and Im not sure whether I should be counting debt in my budget - which means I am virtually automatically over budget.

I didnt. I made all CCs off budget and kept them there. I am only concerned with assigning jobs to money I actually have and you therefore cannot assign a 'job' to credit. The offbudget accounts sit there as a checking record of payments made to the card and the running balance of that card. I have, on ocassion spent on the card, and that gets entered into it as an outflow thereby increasing the deficit on the card - which is correct. When I want to 'pay off' some money from the card via budget, I transfer money from the onbudget account over thereby removing it from the main budget (true) and applying it to the credit card account (also true) which lowers the debt on the card.

edpvito wrote: »

I also dont like not being able to choose arbitrary dates as my budget period. I get paid on the 28th and therefore surely my budget month runs from the 28th to the 28th, otherwise I have nothing to spend after the 31st from my pay!

Yes you do. You get paid on the 28th of the month (for me, it was today) and that transaction is sitting in YNAB as allocated to August. You do this by allocating a category of 'income for August'. You got the money two days ago and it has to last all of August until the next payday.

edpvito wrote: »

Im sure this is something that can be passed into the next month if you havent spent it but I havent got that far in my understanding.

See above. Notice that the payment was dated 31st, but the category says 'Income for August' which means it is allocated to August.

edpvito wrote: »

Another thing that I cant quite figure out is that if i take out cash, say £50, thats a transaction - 'payment to cash', my YNAB balance is obviously £50 less. However I wish to record what I spend with that £50 - £10 groceries, £8 booze etc. - and that would obviously count as if I was spending the same money twice.

Ok, you need a combination of 'splits' and the correct Payee reference. I have a reference which says 'Cash' and this means cash was withdrawn from a particular cashpoint (truth). Now, I want to know how that cash was spent, I can then use splits to define it. Depending on how your categories are set up, you can for instance say that £10 was from your buffer, and £20 was from something else. You did in fact withdaw £30 in this scenario, but you know that it was split.

I find this particularly useful for defining food spending for instance. I have budgets in food category types and I manually itemise every item on the receipt into YNAB and assign it to the correct category, like this :

edpvito wrote: »

I decided to not record the cash withdrawal but then that means my actual bank balance doesnt tally with my YNAB balance,

Nope, because you are telling porkies to yourself and YNAB knows it. You withdrew the money, you can split the transactions as above to know 'where' you spent it and on the reports, you can see a report which shows only 'cash' transactions by always allocating to the same Payee.

Does that help?

kattikitti · 30 July 2014 at 5:14PM

Hi had to come out from lurkdom to reply,

the way we handle cash in YNAB is that we have an on budget account called "cash". when we take money out at a cash point we put this in as a transfer to "cash". Then we would list the transactions as normal but the account used would be "cash" rather than the joint or indivdual account. we usually round these tranactions as any change goes into the jar at the end of the week.

As is said often YNAB doesn't care where your money is.

edpvito · 30 July 2014 at 5:25PM

That is sooooo helpful...i digest this thoroughly. Although I am not sure I am really telling porkies to myself..I took the money out and I am recording what i spend...

FireWyrm · 30 July 2014 at 8:31PM

Or you could do as KattiKitti suggests but combine it with the category idea as well. There's more than one way to skin a cat - it is what works for you.

Personally, I dont withdraw cash unless it is from a specific budget allocation and I'm not particularly interested where it went because that's my fun money. I just dont withdraw cash anywhere else for any other reason and when I do (very occasionally), I am sure it is itemised in YNAB for future analysis.

You dont actually have to stop there. You can go right ahead and be as granular as you like. I briefly touched on the concept, but I actually itemise out every transaction for food, this makes for some pretty interesting analysis.

For instance, I can do this :

By%20PAYE.PNG

And then stuff like this :
FoodBy%20Category.PNG

Look at it like this :

And like this :

There's pretty much no end to the ways you can slice and dice the information if you have a bit of imagination and you want to ask a question. For whatever YNAB cannot do, Excel can, like this :

Really, it doesnt stop there. You can use the power of YNAB search and a tagging system. As long as you are consistent, it will work beautifully. Were you wondering how I managed to itemise the dairy into component bits?

Here's how :

National_Debtline · 30 July 2014 at 8:39PM

I think I'm going to download a trial and see what it's like. I'm a real budgeting nerd (comes with the territory!) so like the sound of it.

- David.

FireWyrm · 30 July 2014 at 8:49PM

National_Debtline wrote: »

I think I'm going to download a trial and see what it's like. I'm a real budgeting nerd (comes with the territory!) so like the sound of it.

- David.

It does take a little bit of time to get your head around it, but once you have, it suddenly makes sense. In essence, using this methodology, you are not concerned with bank balances, you are concerned with category balances. As long as there is a big green zero at the top of the page and none of your category balances are red, you cannot possibly be spending more than you have. It's as simple as that. However, it does give you the flexibility to (what they term) whack-a-mole if you do go over on certain categories as YNAB doesnt care where the money is. As it happens, there is a slight flaw in their design in that it is geared to having one checking account (as the Americans do), not many. The flaw is that I have to be careful which account I make a payment from because although overall, I have plenty of money for the purpose, that money is spread across many banks and it is possible to go individually overdrawn if I make a mistake and pay with the wrong account. I have therefore simplified my accounting structure and let YNAB handle keeping track of the 'envelopes' as it is supposed to. I still have physical separation as you notice with the food account being in TSB and various others with other accounts, but I check which account I am working from on the day rather than spending on whichever card comes out of the wallet first. This is no fault of the software, it just means you have to stop and think first - which some would argue is no bad thing.

You need a budget (YNAB) advice thread

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