You need a budget (YNAB) advice thread

bobobski

For those talking about savings, I've made a new category group called "savings" and each of my savings accounts is there, as well as having the accounts set up as accounts. The downside of this approach is that when you transfer money into your savings it requires two inputs into nYNAB (one the transfer of money between accounts, and two "budgeting" money into that savings account). The benefit is that I can transfer into savings temporarily, e.g. to get interest on council tax that comes out later in the month, without making myself think I have more actual savings than I do.

Give it a go

January2015

Having read various thoughts on nYNAB, I've decided to stick with, and buy YNAB4. I was on a year long free student licence, but took the opportunity to use the 25% discount they offered me to buy YNAB4.

It does what I need, I understand it, it works for me....and best of all it's a one time only payment, rather than subscription based.

getmore4less

hiddenshadow wrote: »

Depends on what you mean by a "proper" budget tool. It does budgeting quite well, but you also have to buy in to the methodology a bit for it to work best (using zero-based budgeting to "give every pound a job").

That's nothing special, a budget is a plan of where you want to allocate your money.

If it can't handle, simply, I allocate £500 on a season ticket today and £5000 on a car in 5 years it is not a budgeting tool.

hiddenshadow

getmore4less wrote: »

That's nothing special, a budget is a plan of where you want to allocate your money.

If it can't handle, simply, I allocate £500 on a season ticket today and £5000 on a car in 5 years it is not a budgeting tool.

Yes, sorry, I was referring to the difference between a lot of finance software (Quicken, etc) that allow you to forecast your budget and project what your financial life will look like in X months/years/decades. YNAB's functionality is based on only working with money you have on hand right now, which some people don't like as it's quite restricting (and, depending on your current financial state, could be depressing).

YNAB does allow you to do both of those things - whether it's simple or not is up to the user's interpretation. FWIW, I think both of those scenarios are quite simple in YNAB4. nYNAB can make both of those simple (and give better feedback on how you're doing towards that car in 5 years), but it also does some very different things to YNAB4 which is taking some getting used to.

hiddenshadow

hiddenshadow wrote: »

If you truly don't want it to count in your budget, set the account up as a tracking account ("other asset"). Then you know that whatever is in that account is what you have to buy a car with, and don't need to mess with updating category balances and so on.

Just wanted to update this bit - I was having a brainless moment and forgot that when you transfer money from an on-budget account (e.g. your current account) to a tracking account (e.g. your car savings ISA) you need to assign it a category (as you are "spending money" out of your budgeted accounts).

So, contrary to what I wrote above, I don't know if there's a way to do what I think you're saying you want. If I understand you correctly:

1. you want a separate account in YNAB to track your savings balance (and reflect that your car savings ISA is a separate account in real life)
2. you don't want to budget for the money you put into the car savings account (as a car savings category)
3. you do want to move money from your on-budget current account to your car savings account

#2 and #3 are in conflict as far as YNAB is concerned. It's view is either:

1. car savings should be on-budget. Then you can move money from the current account to the car savings account (and back) as much as you like without categorising it. However, YNAB will view whatever you have in that ISA as available for the rest of your budget, so if you have £4k in your current account and £1k in your ISA it wants you to budget the full £5k (thus needing a car savings category to put the £1k in)
2. car savings should be off-budget. You can move money from the current account to the car savings account (and back), but you'll need to categorise it (as YNAB would view this as "spending" because it's leaving your budget). Thus you would need a car savings category to spend against.

Either way, YNAB wants you to have a category.

The other option is, assuming you decide what to put in your car savings ISA when you're paid:

1. when you decide what money to put in your car savings ISA, reduce your YNAB income by that amount. So if you get paid £1k and you put £100 into the ISA, tell YNAB that you got paid £900
2. have the ISA as a tracking account (so that it will exist in reports, net worth figures, etc)
3. in the ISA tracking account, enter an inflow transaction (without category) of £100 to reflect the contribution

It'll slightly mess up your reports as far as income vs expenses (as income will be lower than actual), but as car savings isn't an "expense" that should be ok.

We do this with our pension funds, but it's slightly easier as pensions come out pre-tax and the income we put into YNAB is post-tax, so the numbers are consistent. I don't see why it wouldn't work for variable contributions to the tracking account.

getmore4less

hiddenshadow wrote: »

YNAB's functionality is based on only working with money you have on hand right now, which some people don't like as it's quite restricting (and, depending on your current financial state, could be depressing)

I can see why that focus is critical for many as that is the day to day problem people need to solve to get out of debt and as a starting point it will help people change the way they look at their money.

But ultimately proper budgets are about the forward looking plan and and planning where you are going to spend your future money*, if you stick to the plan(with cashflow) the day to day is incidental as you won't run out of cash, actually where the money is becomes totaly secondary to where you want to allocate it.

It may be that people once they have their finances under control should review the tools they need to do the best job.

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* you get interesting cash flow with things like 0% spend credit cards, they make money available today to come out of future income(at zero cost).

I guess I might be better off just having a look at the product to better understand how it works, chances are I will stick with MSMoney as that does the job.

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I think my queries might be done, as I don't think they are of much help to those that use the product and that is what this thread is for.

hiddenshadow

getmore4less wrote: »

I can see why that focus is critical for many as that is the day to day problem people need to solve to get out of debt and as a starting point it will help people change the way they look at their money.

But ultimately proper budgets are about the forward looking plan and and planning where you are going to spend your future money*, if you stick to the plan(with cashflow) the day to day is incidental as you won't run out of cash, actually where the money is becomes totaly secondary to where you want to allocate it.

It may be that people once they have their finances under control should review the tools they need to do the best job.

YNAB allows/encourages this mindset, just doesn't give you the visualisation of your future money. So if your plan is in 5 years to buy a car you would set money aside this month (with money you have on hand now), and again next month (when you get paid again), rinse and repeat for 5 years.

A large tenet of YNAB4 is that where your money sits is irrelevant, its job (bills/emergency fund/retirement/car/etc) is the important bit. nYNAB has deviated from this a bit as it does a lot of magic with credit cards (and assumes that all credit card spending is debt, which as you say isn't the case if you're treating your credit card as a debit card that makes you money).

I definitely agree with reviewing the tools to fit your circumstances. I came to YNAB4 debt-free but its methodology really helped me focus on my spending priorities (limiting our fun spending, buckling down on mortgage OPs, etc). Now that nYNAB seems to focus primarily on getting your finances in order and eliminating debt I may switch tools down the line (will see what features nYNAB adds in the coming weeks).

Frogletina

I still forecast in Excel - that was the budgeting tool that I used before Ynab.

First I had a budget based on estimated income, and beneath that one for actual income. Some months I was over budget and some I was under budget. I was never sure until the end of the year whether I would end up with an excess of income or not - and this would affect my savings.

When I began using Ynab I found that I was able to keep within my actual income/category balances. My savings are on budget too (in a hidden category), and I don't dip into them to cover my day to day living expenses.

My savings were built up during the time I had a higher income - I'd rather use them for specific purposes decided when I do my forecasting at the beginning of each year. I suppose this is at odds with a lot of people who will be saving from their income with a specific goals in mind.

frogletina

SeduLOUs

greensalad wrote: »

I've put £66 in my budget col and it does indeed reduce the ATB amount but it also gives me a green light on that category saying I have £66 that I haven't spent. I know it's true, but it seems odd to me. In my mind that money isn't available to spend, it's stashed away for a specific bill. I guess I'll have to learn to ignore it.

It is true.

You now have £66 available to spend towards a new car. The fact that you don't want to spend it yet is fine, you just let it rollover. Next month, if you add another £66, it will show you that you have £132 to spend on a car. After 12 months you will have £792 in there, assuming you haven't needed to pull any out to cover an unexpected expense elsewhere (which would be a WAM).

It's reflecting the reality that you could currently spend £66 on a car without having a negative effect on the rest of your budget.

When you finally do buy a new car, you'll 'spend' the money and either reduce it back to zero or have some leftover that you can leave there towards the next car or move to a new category.

BrandNewStart

Help! I am a Natwest customer and am trying to link my YNAB account to my bank account. However it won't work. Natwest have been very unhelpful, saying they advise not to use such 3rd party sites/apps and that they cannot help.

Has anyone else had this issue?

BNS