You need a budget (YNAB) advice thread

Pixie5740

YNAB crops up in quite a few threads on this board and the budgeting board but I don't know if it has it's own dedicated thread. I'm a bit of a YNAB evangelist, as is Fire Wyrm, although I realise it doesn't suit everyone. Different strokes for different folks. The important thing is finding something that works for you.

andyfromotley

Ok, well maybe i'll just post my queries on this thread. two queries for now!

1. Cash! i'm guessing ynab works easiest if you use a card for payments, you just keep the receipt and show it as am outflow from the relevant category. But what about cash?, say i draw £30 out of the ATM, spend the day in town and buy a couple of things, give the kids a couple of quid blah blah. £30 gone but more difficult to put in the right category plus the change remains part of your remaining budget, is it all a bit messy. How do you deal with that. I was thinking of having a category for ATM or cash spends and simply leave it at that?

2. Savings, have you put your savings (i hold mine in a separate account to 'safeguard' them) on there? have you created a separate budget for them? Some other way? Not sure how to deal with them. I watched the video which seemed to suggest just keeping them as part of your one budget which seemed a bit messy?

Andy.

~Beanie~

I've got a category for spending money, I just take £50 a week out and record it here but don't actually break it down into what it then gets spent on.

Savings are just in my main budget, in a separate bank account but included in the budget - in a category called Beanie's Savings.

Pixie5740

1. I have an account called "My Purse". Whenever I take out cash from my current account I enter it as a Transfer between my Current Account and My Purse. Then when I spend cash I assign it a category. For example if I buy a pint of milk I categories that as "groceries", if I have a couple of glasses of wine in the pub after work on a Friday I categories that as "going out". I just categorise my cash spending the same as I would when I use my debt card as every £ has already been assigned in my budget.

2. I have some savings in various savings accounts and some savings in my current account. For example, my "emergency fund" stays in my current account, the money I set aside each month for my car insurance stays in my current account, my fund for birthdays stays in my current account. Bigger savings goals such as a new car I would probably have a separate savings account for but it is still part of my budget. You only have one budget, trying to have more than one personal budget going at a time would be messy.

You don't have to safe guard your savings as you've already assigned every £ so if you've given yourself £100 to spend on petrol, that's all you spend, you don't dip into savings. If you were to end up spending more than £100 and hadn't budgeted for this you would need to take the money from another category to cover it. Maybe cut back on nights out, or clothes, wherever you can trim some excess fat from.

andyfromotley

Thanks for the replies guys. I am sure that your way is a more thorough way to do it pixie but i'm not sure i am efficient enough to record every penny at the moment so i will go with the way you are doing it beanie, seems pretty simple and keeps the budget accurate. If i find i am leaking too much money away via this i may change to a more detailed breakdown like yours Pixie.

Ha! i have to safeguard my savings from myself Pixie! at least in this early part of my journey to gain control of my finances. But i do of course understand that if you follow the budget then yo can just have it in one account, which of course makes it much simpler. I take it that its important to transfer it between accounts on YNAB to ensure that your real accounts reconcile correctly?

Pixie5740

Yes, you should keep things like savings accounts "on budget" and transfer the money between your accounts. The only "off budget" accounts I have are my pensions.

andyfromotley

Cheers Pixie i have,

I am loving it at the moment, it addresses exactly my money weakness of having enough but never quite being sure how much i have left for what or what is 'available'.

Will definitely purchase - if i don't win one in the video tutorials! (fingers crossed)

uncreative

I use the app to record cash spend. I have "on budget" accounts for a cashback credit card, my bank current account, misses bank current account and my cash and her cash.

Use the transfer function to record movements. If i take £30 out the bank at the ATM then my bank gos down £30 and my cash gos up £30. If i spend cash then i do record it as you need to make sure you have budgeted for it.

I have a household category that has rent council tax, sky, tv licenece etc. that comes out the bank account. i have a separate main category called everyday that includes:

groceries
entertainment
takeaways
snacks
travel

These can be paid for by cash, bank or card. if you have a smartphone then recording cash payments is really easy, takes 10 seconds. it should be easy to record anyway as you have a payee set up for whatever you need then just allocate the cost. that way you budget £80 for entertainment and if you give the kids £10 to get stickers or whatever then its just £10 to entertainment from cash account.

uncreative

i also have savings "off budget" so that i have to physically budget to save money then actually "spend" it to move it from current account to savings account. works better for me than an on budget savings account as then it doesnt appear in your budget total, but till your overall net worth. It also forces the savings to appear in any reports you create showing it as a percentage of your cash going out the door each time.

Pixie5740

You can budget savings keeping your savings accounts on-budget too. My Premium Bonds (I know it's not the best interest paying savings account before anyone says anything) account is on-budget and my budget has a Savings Goals master category. Under that master category are a few categories for big purchases I'm saving up for like a house. That way I can budget £X amount for my savings goals and everything stays within the budget.

I think that's what YNAB advise you to do and it works for me. The important thing is finding something that works for you and sticking to it.

I've been using YNAB for a year now and my finances have improved dramatically. Although I'm fortunate enough not to struggle with debt my budgeting was poor. I'm saving at a faster rate than I ever have done before and just the other week I bought a new car with cash* from money I'd set aside for the purchase. It was such a good feeling.

*Actually I took the finance to get a bigger discount from the dealer since they make more money selling finance that cars but there's no ERC so it's been paid off in full.