Tired of playing catchup!

denialanderror

snowscreamer wrote: »

Oh - and to check you have YNAB set up correctly your June 2015 header in the budget should read the following:

0.00 Not Budgeted in May
-0.00 Overspent in May
+X Income for June
-X Budgeted in June

= £0.00
Available to budget

Where X is the total income you received in May, which you are using to pay for June. If it doesn't look like that then you have done it wrong!

Any income arriving is irrelevant because any income received in June should be marked as "Income for July". That will then affect the July budget only and the June budget doesn't change.

Ok, I may have done it wrong then!
I think there may need to be a period of transition between how I've been working, which is effectively cash accounting and working a month ahead as there isn't enough available cash to transition straight away but I had thought I'd set it up to reflect how things are.


First thing is - should I be applying the credits for my monthly salary that I've setup as scheduled payments to the account in advance?

I'd not done this so far as it would mess up the actual balances and mean reconcilliation wouldn't mean anything.


Since I've already paid everything for this month, bar petrol, some food and cash I've just used the opening balances as the total cleared funds in each of my accounts today so:


Current Account 1 (Card + Cash Account) - 59.36
Savings Account - 500.00
Current Account 2 (DDs Account) - 27.99 (To cover Specsavers and Netflix)
Credit Card 1 - -3491.20 (Car repayment)
Credit Card 2 - -303.45 (Transactions this month (dentist and fuel))


From today I can then log transactions between now and payday.

I've budgeted 400.00 into the moving fund, and the rest between food, cash and fuel, leaving 0.00 available to budget for June.


Both credit card balances are correctly showing as Pre-YNAB debts, with the arrow point right for "subtract from next month category balance".


I'd thought my next salary payment should show as available in the June budget, which I thought was right as all the DDs will go against June unless I manipulate the DD dates so it appears the money was taken in July rather than June.


This should mean my 39.00 overbudget figure in June should change to 1915.07 in credit when I get paid, with deductions made for DDs, leaving the rest available to be allocated in July, so effectively what I will be saving and spending outside of DDs.


Currently how to make the transition to getting ahead is perplexing as I'm not sure when there will be enough cash available to do this. I'm currently wondering if I need to make the next of each annual payment on demand as I have been, and then after each one, start accruing for future iterations.

denialanderror

thriftylass wrote: »

Hello, just thought I pop in to give my two pennies worth to your SOA (in red). And good luck on your journey. Things will chnge if you want them too. Good luck

Hi, Thank you, I hope things will change for the better, I am prone to getting overtaken by negative thoughts and pessimism, it's something I'm working on.


Re your comments:


Mobile - Stuck with it for a while unfortunately. The bill is actually mostly the data allowance which I've been increasingly relying on as the internet connection at home is crap and the internet connection at work is monitored.


Car Cleaning - This is definitely part of the "!!!! it, what's an extra £10 every few weeks on top of everything else" mentality which I need to get away from.


Clothing - I'll need to look at this in a lot more detail. I know for this year I probably do have a couple of hundred to pay out for other clothes that I'll need to replace.


I've bought 1 new suit in my new size this year, will need a second but will hold off buying until I get to second interview stage somewhere.


Will also need a new winter jacket as I bought my last one when I was XL and it now just looks ridiculous on me. Add to that only having 1 casual shirt that fits and only 1 T-Shirt that isn't plain white and the bill is likely to be around £250.


Next year should be less as I won't have the expense of replacing all jeans and winter tops (hoodies, jumpers etc.).


Having spent all this I am very concerned about weight gain. I've been off the booze since new year which has helped a lot in getting the weight off but may struggle with that come BBQ season. I know in previous years I didn't spend anywhere near as much on clothes.

denialanderror

On the subject of the food budget - That's 35.61 for food each week, plus allowance for other things I'd buy from a supermarket, so stuff to take if I go to a BBQ or party, bog roll, cleaning products, deodorant and so on. Suppose "supermarket" is probably a more accurate category title.


I am taking the point that I probably need to refine my categories a lot further to get a truer picture of where the money is going.

snowscreamer

Hi denial,

I really want to get to the bottom of the YNAB setup. So here is our first month:



Your June should resemble that to some extent. So the main thing is it says £0 available to budget ie. you have budgeted all your income to one category or another.
The only outflows which should appear in May are the Pre-YNAB balances which are the opening balances of your credit cards. Any other outflows in May; remove them. Then update the starting balances accordingly to reconcile. Then you don't worry about the past, just concentrate on the future and trying not to spend more than your monthly income during June. Stop worrying about when payday is. You already have your direct debits set up to account for the fact you are paid on the 25th, so you shouldn't suffer with not being able to satisfy your direct debits. Let me know if it's still not quite right and maybe post a screenshot and I can see if I can guide you in the right direction! Once it's set up correctly, half the battle is won! And it's very easy to use once set up.

snowscreamer

denialanderror wrote: »

Ok, I may have done it wrong then!
I think there may need to be a period of transition between how I've been working, which is effectively cash accounting and working a month ahead as there isn't enough available cash to transition straight away but I had thought I'd set it up to reflect how things are.

It does reflect how things are, you have X to budget for each month, just think of the X as covering 1st-1st rather than 25th-25th. The money will be there to cover your direct debits as you already have them setup to come out after your salary. YNAB is concerned with the budgeting of income, not which pay packet is actually used. If you see what I mean.

denialanderror wrote: »

First thing is - should I be applying the credits for my monthly salary that I've setup as scheduled payments to the account in advance?

Absolutely not. You never know what will happen so do not budget money you don't have. What would happen if you company's bank account was frozen and your salary didn't arrive but you'd already spent it? Your income due on the 25th June isn't needed until July as you already have your budget for June. So only enter it when it actually arrives, at which point you can set the budget for July.

denialanderror wrote: »

I'd not done this so far as it would mess up the actual balances and mean reconcilliation wouldn't mean anything.

Absolutely.

denialanderror wrote: »

Since I've already paid everything for this month, bar petrol, some food and cash I've just used the opening balances as the total cleared funds in each of my accounts today so:


Current Account 1 (Card + Cash Account) - 59.36
Savings Account - 500.00
Current Account 2 (DDs Account) - 27.99 (To cover Specsavers and Netflix)
Credit Card 1 - -3491.20 (Car repayment)
Credit Card 2 - -303.45 (Transactions this month (dentist and fuel))

YNAB will only work for you in June if you enter the payments already made this month. Enter these and reduce the starting balances according. Shouldn't take too long as we are only 5 days in. Don't enter anything in May though. Make sure you budget for your housing and utility payments which will be coming out at the end of the month.

denialanderror wrote: »

From today I can then log transactions between now and payday.

Don't stop at payday, log all transactions for June; set July's budget with your income received 25th June, log all transactions for July, and continue...

denialanderror wrote: »

I've budgeted 400.00 into the moving fund, and the rest between food, cash and fuel, leaving 0.00 available to budget for June.

Great, don't forget the payments due at the end of the month. You should always have 0.00 available to budget - "every dollar has a job". If you don't need to spend or save, then budget it to clear the debt. Don't forget to budget for minimum payments (at least) on your credit cards.

denialanderror wrote: »

Both credit card balances are correctly showing as Pre-YNAB debts, with the arrow point right for "subtract from next month category balance".

Perfect!

denialanderror wrote: »

I'd thought my next salary payment should show as available in the June budget, which I thought was right as all the DDs will go against June unless I manipulate the DD dates so it appears the money was taken in July rather than June.

No - easier rather than splitting 25th-25th to just think of June's salary paying for the whole of July. In reality you may be needing to use the newly-received income to pay the direct debits without going into overdraft (at this stage), but think of it as June's salary paying for July. And May's salary paying for June of course. Otherwise it is just too confusing splitting your salary payments each time between two months.

denialanderror wrote: »

This should mean my 39.00 overbudget figure in June should change to 1915.07 in credit when I get paid, with deductions made for DDs, leaving the rest available to be allocated in July, so effectively what I will be saving and spending outside of DDs.

Much easier to budget for that from May's salary and leave June's salary to pay for July. Much much easier!!

denialanderror wrote: »

Currently how to make the transition to getting ahead is perplexing as I'm not sure when there will be enough cash available to do this. I'm currently wondering if I need to make the next of each annual payment on demand as I have been, and then after each one, start accruing for future iterations.

Start accruing for annual payments right away, then once they are paid, you can drop down the amount as you will have a whole 12 months to accrue before the next one.

denialanderror

Thank you again, I think I've now got a good grasp of what YNAB is trying to do and how it works, however I think I may have not been clear about the situation regarding the imminency of this house move.


Also, I cannot see any benefit to inputting all the complexities of transfers and splitting the loan settlement between savings and a credit card which would all be reflected in this months spends, causing a massive overspend to show on this month which will never be cleared.


The way it is setup now, the debt is showing correctly as an outstanding debt and the available to budget figure accurately reflects what is actually available to budget, and I have allocated it to the places it is needed this month. This does not leave any money to start accruals.


The bills relating to the house move must be paid in September. This date is fixed. It will unfortunately result in having 2 rooms and associated bills for 2 rental periods. If I don't take the opportunity to move in with these people, there is a real chance I may not find somewhere suitable to live when I am required to leave my current property, which is November 9th.


I am accruing money to cover -
- Deposit, 6 weeks rent = 675.00
- First months rent = 450.00
- Second months rent = 450.00
- Agents fees = £300.00 per person
- 2 Months bills = 230.00
- Other Unavoidable Costs, tv licence, van hire etc = 200.00
Total = 2300


Of which I currently (today) have 400.00 aside.



There are 3 salary payments due between now and first of september, with 500.00 remaining in each after
I've paid normal bills and living expenses due.


3 x 500 = 1500 plus 400 already saved = 1900.00 of the 2300.00
Leaving a shortfall of 400.00 to find.


If I do not accrue this money in time, the moving bills cannot be paid, I will not have anywhere to live.


IF I am lucky, I can credit card that 400.00 and settle that balance when I get the deposit from my current place returned, however my share of the deposit was only 1 months rent (366.00) and there is damage to the property (mould around vents that go directly outside in the lounge, bathroom and kitchen, which has resulted in us damaging the paint cleaning) which based on my past experience, I suspect we are going to be charged for repainting of these 3 rooms so I am not banking on getting much back. I could paint it myself but then the deposit return would be covering the paint costs so not really any better off.


There is not enough spare cash to start accruing for annual bills at this point.


YNAB is potentially a way forward but I think it will only work once I'm in the new place, in a steady state with the move, which is by far the largest of my annual bills paid for and some actual cash available to budget for accruals.


Unfortunately, looking at my forecast for the next year, this leads me to the same conclusion that there simply isn't enough money coming in to get out of this cycle.

I think the immediate focus needs to be better tracking of expenses which YNAB can be used for,

snowscreamer

OK, so perhaps leave the accruals to start later in your case (obviously this means when they do start you'll have to set aside a higher amount per month). And making inroads into your debt can wait until after your house move too.

I disagree that YNAB won't work until you're in the new place - sounds like you are in desperate need of it now to make it through to September whilst minimising adding to your debt!

From now, every time you come to buy something, before you do it, check if there is enough money in the budget for that category. If there isn't, don't buy it. If you still really want it, move the money and decide which category will lose out. If you don't stick to the budget, you are not living within your means and will go further into debt. YNAB is a fantastic way to see exactly what you can and cannot afford. So use it over the coming months until September with your goal being that you will have that £2300 saved, with as small an amount as possible added to your credit card debt. If you do need to borrow from a credit card when you get to September, enter in your budget a negative amount against your Pre-YNAB debt category for that card which will release the money to budget.

snowscreamer

denialanderror wrote: »

Also, I cannot see any benefit to inputting all the complexities of transfers and splitting the loan settlement between savings and a credit card which would all be reflected in this months spends, causing a massive overspend to show on this month which will never be cleared.

If you enter a transfer (I agree may be little point for this month as long as your current balances are correct) it won't affect the budget as it isn't a spend. You still have the money, just in another account. Transfers don't have categories.

snowscreamer

denialanderror wrote: »

Unfortunately, looking at my forecast for the next year, this leads me to the same conclusion that there simply isn't enough money coming in to get out of this cycle.

If you persist in thinking like this then you will be right
Making a concerted effort to stick to a budget and not spending more than you have coming in, accruing pots to cover annual bills, will lead to this situation righting itself I promise. You do have to believe though and make an effort!

I hope I can inspire you with this graph of my non-annual, non-rainy day spending over the last year. We started with using the budgeting feature in YNAB from December 2014 (although we have imported earlier data to use the reporting features - just were not budgeting at that point and merrily overspending).



So for the six months before using YNAB to budget - average monthly "everyday expenses" spend was £3110. In the six months since we started using YNAB to budget - £2394. Using YNAB has helped us to cut our "everyday expenses" by 23% on average. Not buying stuff we can't afford. Shopping more wisely. You will get there - if you believe.

denialanderror

snowscreamer wrote: »

OK, so perhaps leave the accruals to start later in your case (obviously this means when they do start you'll have to set aside a higher amount per month). And making inroads into your debt can wait until after your house move too.

Agreed.
Income left after bills and living costs will be split -



- Now to Aug - Accuring for the move.
- Sept - All House Bills
- Oct - Car tax, service and MOT.


I Am considering moving to DD for the car tax which is one less accrual but not sure how this works as never used it before.


- Nov - Christmas


There's usually a lull in annual bills between Dec and Mar when the car insurance is due so I think this
will be the time to really get started with accruing money in advance for things.


It's usually the time I knock the biggest chunk off outstanding debts or do things like buy clothes, dentist visits and so on. Fortunately I am now down to the last £3500 of debt.


I really hope I don't have to move again next year, didn't think I'd have to this year. But will need to plan for it.


If I don't move, then there may be a possibility for using they money kept aside to cover the depreciation of the car before I lose all the money tied up in the current one and end up back to square one with that. I know the newer model of what I have is only £30 road tax.

snowscreamer wrote: »

I disagree that YNAB won't work until you're in the new place - sounds like you are in desperate need of it now to make it through to September whilst minimising adding to your debt!

I will be using it to log expenses from now going forward. So far haven't spent any money since Thursday which was a small food shop.


Till 25th June I have:


- £64.36 in the misc cash budget
- £55.00 Split equally between work and personal fuel. Quarter of a tank left which will last till Wednesday.
- £50.00 for food. Most foods been bought for the month so this only needs to cover fresh stuff.


Haircut is booked, that'll have to be card cleared on 25th. Showing in YNAB as an overspend.


This weekend, I'm expecting to spend £10, that'll be tomorrow evening where I'll be going for a drink with other half. I'm reluctant to cut back on spending time with her as we really don't have much time left together. Although I do fluctuate between this and wanting to distance myself to make the goodbye easier.