You need a budget (YNAB) advice thread

Eyes_wide_open

I have two categories - whether i shall keep the two i don't know yet. I am using it as a learning curve at the moment so i can get more off a handle on where my money is going and give me a reference point for future months.

Once i know approx monthly spends i may combine categories.

Frogletina

andyfromotley wrote: »

What advantage would knowing that you spent some of it on relatives give you?? You still spent it, in the same place and on the same things, to me that's detailed enough, but each to their own.

The advantage would just be to know how much I'm spending on myself. It's actually a sub category of my housekeeping, the detail shows on my reports.

Eyes_wide_open wrote: »

I have two categories - whether i shall keep the two i don't know yet. I am using it as a learning curve at the moment so i can get more off a handle on where my money is going and give me a reference point for future months.

Once i know approx monthly spends i may combine categories.

What two categories do you list on Ynab?

It's all new to me and already I've amended a few categories. I'm still wondering how to allocate interest I've earned so far this year - my cashback goes back into housekeeping as it where it has been earned.

frogletina

Eyes_wide_open

I have a category for restaurants and one for family. So if its just my meal then it goes in restaurants but if I'm treating other people then its split and the family bit goes in family and the remainder in restaurants. I am quite a generous person - maybe too generous at times! but having separate categories allows me to limit or at least be conscious of it.

In relation to interest / cash back i have a slush fund category and i add the interest into this category. i then use this money purely on me for treats. Its money i wouldn't have had and therefore i don't want to spend it on necessities but be frivolous and enjoy it knowing it was free money!

For me its all about finding what is right for you. If it works great and if not then nothing is set in stone and can be amended x

Frogletina

Eyes_wide_open wrote: »

I have a category for restaurants and one for family. So if its just my meal then it goes in restaurants but if I'm treating other people then its split and the family bit goes in family and the remainder in restaurants. I am quite a generous person - maybe too generous at times! but having separate categories allows me to limit or at least be conscious of it.

In relation to interest / cash back i have a slush fund category and i add the interest into this category. i then use this money purely on me for treats. Its money i wouldn't have had and therefore i don't want to spend it on necessities but be frivolous and enjoy it knowing it was free money!

For me its all about finding what is right for you. If it works great and if not then nothing is set in stone and can be amended x

Thanks for the insight into your categories.

Ynab is changing the way I look at my finances. I've always been good at recording my income and spending, but Ynab is making me look at the bigger picture and making plans for it.

Although I budget for personal spending, lots of things don't fall into neat categories - I like the idea of a slush fund.

frogletina

FireWyrm

Frogletina wrote: »

Thanks for the insight into your categories.

Ynab is changing the way I look at my finances. I've always been good at recording my income and spending, but Ynab is making me look at the bigger picture and making plans for it.

That is of course the very good thing that we all should be doing. Too much of our money is spent on impulse buying which is due to a multitude of very clever advertising over the last 30 years. Prior to that, people pretty much had money for living and certainly nothing for 'fun' as we would understand it. In 1900 for instance, the average family spent over 28% of their gross income on food. Granted, we didnt have quite the same levels of tax as we do now, but still, the idea of disposable income was an alien concept until relatively recently. The reason for making plans is to ensure that you never spend more than you have. This doesnt just mean the standard monthly bills that we all have to deal with, but every thing, everywhere. If you spend money down the pub every month, then there is no use pretending that it doesnt happen and ignoring it - you need to plan for it. The 'I'm worth it' generation needs to grow up and understand that money is not infinite, that credit will not always be there and that living in perpetual debt is one of the biggest scourges of our modern society and possibly the biggest scandal of our generation. You cant have it all now - no one can. You need to plan for it.

It is also essential because, believe it or not, some suppliers are particularly useless when it comes to collecting their money. According to YNAB, I have over £100 sitting unclaimed in various funds. I know I spent the money because I recorded it and I always record from real receipts, but for whatever reason, the supplier has not claimed it. I have one from January for instance for over £45. They do of course have 6 months in which to claim their money, so it isnt mine right now, but if it is still unclaimed by August - it's mine again.

Frogletina wrote: »

Although I budget for personal spending, lots of things don't fall into neat categories - I like the idea of a slush fund.

frogletina

Be careful with slush funds - you need to find a balance between careful budgeting and the ad-hoc spends that happen occasionally. Ideally, there shouldnt be a slush fund at all because you should not be spending from anything other than your established categories, that is the point of YNAB. It is not a retrospective accounting app, it is a forward thinking allocation app. You allocate the money, then you spend it - not spend it and figure out where it comes from after. Having said that, a small slush fund is prudent for the odd unexpected visit to the chippie because you screwed up dinner, but it should not be very big. If you put everything you spend in a slush fund, it defeats the purpose of YNAB and you might as well just have done it on paper.

Frogletina

FireWyrm wrote: »

Be careful with slush funds - you need to find a balance between careful budgeting and the ad-hoc spends that happen occasionally. Ideally, there shouldnt be a slush fund at all because you should not be spending from anything other than your established categories, that is the point of YNAB. It is not a retrospective accounting app, it is a forward thinking allocation app. You allocate the money, then you spend it - not spend it and figure out where it comes from after. Having said that, a small slush fund is prudent for the odd unexpected visit to the chippie because you screwed up dinner, but it should not be very big. If you put everything you spend in a slush fund, it defeats the purpose of YNAB and you might as well just have done it on paper.

I wouldn't have a large slush fund. My personal spending I put into 4 categories at the moment, Entertainment, Clothes plus personal care items, Medical which is mainly dental care and opticians, and finally adhoc travel costs - mainly if I need to take a taxi.

Everything else comes under household costs.

frogletina

Pixie5740

I've been allocating myself £50 a month for spending money to cover buying the odd newspaper or coffee, those kind of things. However, I've found that because I've categorised pretty much everything I'm not even spending that £50 a month so the leftovers gets moved into building up my buffer.

Eyes_wide_open

My slush fund is not a lot and is purely cash back money and interest. Its not a catch all category but one to allow me to treat myself without having to dip into groceries or hairdressers or medical etc. I could have called treat fund, or coffee and cake fund etc. Its only a name and I'm happy with this so it will remain on my budget xx

pillion

Hi and thank you to everyone who has posted on this excellent thread. After reading and rereading it I downloaded the free trial. I now have only 5 days left and I know I just can't manage without it. I'm sure I read somewhere that you could download it free if you were a student but I can't seem to find any mention of it on their website now. Does anyone know if it's still available? I'm only a part time student but thought I'd give it a go.

January2015

pillion wrote: »

Hi and thank you to everyone who has posted on this excellent thread. After reading and rereading it I downloaded the free trial. I now have only 5 days left and I know I just can't manage without it. I'm sure I read somewhere that you could download it free if you were a student but I can't seem to find any mention of it on their website now. Does anyone know if it's still available? I'm only a part time student but thought I'd give it a go.

Hi

YNAB is free for one year if you are a student. Instructions here

I am a part time student with OU and I just sent through a PDF of my student academic summary. Licence no. sent through within 24 hours.