YNAB advice

Ineedabudget · 8 May 2018 at 3:29PM

Hi

Apologies if this is in the wrong place, feel free to move if so.

I subscribed to YNAB at the start of this month to try and get to grips with my finances. I've watched some of the You Tube tutorials and found them very helpful but have a few questions.

I understand the concept of budgeting your available money so that "to be budgeted" should be £0. As this is my first month (and I am trying to clear my debt of approx £3k) I have no buffer yet. I have bills due at the end of the month after payday. Should I budget for them once I get paid rather than now?

Does the credit balance of your bank account at the end of the month carry into next month's budget (as "to be budgeted")? Or should I allocate this to a category? I've made a category called "Next month's money" in the hope of creating a buffer so should I add it to that?

Also do people add their debt balances to the "Accounts" section to allocate payments? I have 2 credit cards but not using them and paying them off so not sure if this is worth doing.

Thanks for reading!

Drawingaline · 8 May 2018 at 4:02PM

Hi, I use YNAB and love it! Basically you need to ask what does my money need to do before I get paid again? So I get my main chunk of money on the 25th of the month and I allocate these to next months bills. I get other money throughout the month which is allocated to other things, but the bulk of the bills are paid once we get the monthly paycheck.if you have spare money now and know that next month's bills will be covered by your income that comes in before they are due then either use any spare cash to build a buffer, throw at debt or allocate to a 'stuff I forgot to budget for', an incredibly useful category when first starting out as you will spend at least six months playing catch up, allocating new categories as bills come up that are not regular. Your green balances will roll over into the next month, both categories and account balances.

I didn't add any debt for over a year, I found it confusing and just wanted to get to grips with it. My loan payments just went out as an outgoing. I now have my mortgage and loan as a tracking account and my credit card (nil balance) set up to be used as YNAB wants it to be. Atm I would just concentrate on filling categories and inputting transactions.

I am a member of a fab Facebook group, if you would like I can pm you a link to it, it is a wide variety of people, Americans, Canadians, Europeans. They are a helpful lot and adore answering questions, and also have lots of useful advice in general.

Ineedabudget · 8 May 2018 at 4:18PM

Thanks very much, that's great advice! Especially the extra category. I'll be borrowing that idea.

I get paid on the last Wednesday of the month (making this a 5 week month - want to get to a point where that doesn't matter) but still at the stage where the whole wage is being spent by next payday. My husband is self employed so his earnings vary so we just want to be in a better financial position. I'll be going on maternity leave in August so need to stick to budgeting. Since starting a few weeks ago I've become much more aware of what I'm spending on. At the moment I've budgeted money for overpaying my credit card balances and have used the snowball calculator to make sure I'm paying them in the right order.

Thanks for the offer of the Facebook link but I don't have an account. I used to but wasted way too much time on there. Now tempted to reactivate :rotfl:

People always seem so enthusiastic about YNAB so I'm glad I'm giving it a go. No more mindless spending.

Drawingaline · 8 May 2018 at 5:15PM

I hear you on the Facebook thing :rotfl: however they are always recommding the classes so I shall see if I can pm you a link to them, personally I set it all up via YouTube, and I am no tech wizard, but some people really struggle and it's always interesting gleaning the advice for anything that will help me too!

Drawingaline · 8 May 2018 at 5:21PM

Have sent a pm with some links that might help

Ineedabudget · 8 May 2018 at 5:36PM

Thanks Drawingaline, appreciate your help! Must admit even some of the tutorials went over my head but think it just takes time to get your head around it all. Will get studying!

datlex · 8 May 2018 at 7:00PM

OP, make sure it is not just on "paper". How are you translating it to the real world?

Ineedabudget · 8 May 2018 at 8:20PM

Thanks, datlex, and good point. I'm putting all transactions in as they're made and making sure that the "available" amount, that I have budgeted but not paid out yet, is what is in my bank account. And my debt payments are being made as soon as I get paid. The debt was built up as I was using my credit cards to pay for larger items (mainly for house - dishwasher, bed for daughter, etc) and also had it linked to my Amazon Prime account. It's too easy to spend money you don't have which is why I thought YNAB would be really helpful. My aim is to pay off the debt and then focus on savings. I think budgeting for the money you have is a really good way of not spending on things you don't need.

System · 9 May 2018 at 7:04AM

Hiya,
Building an emergency fund is a great idea if you have cash going free. Set yourself a target (perhaps £1k to begin with?)

. My dh is also self employed and we've set up a YNAB budget for his self emplyment and within that have got a category we are saving into to get up to a month of earnings for him, so effectively aiming to get a month ahead to help smooth out any income changes. We've also got a tax and NI saving pot for him and a holiday/sickness saving pot (with the aim he can still 'pay himself out of this pot if he has a day off, or if we go on a longer holiday it softens the blow)

For our first year I think when we were getting used to things it really helped us not spend what we needed to save for bills after that I've got better at putting money into pots and leaving it there.

You could always do a tilly tidy and move any odd pennies off each budget category into a debt buster pot which you then pay off at the end of the month, this helps me feel I'm doing some small overpayment on debt, whilst building up other categories.

Ref listing your cards or not, it's up to you. I sometimes found it too demotivating, but you could just pick off the one you want to pay off first and then add tilly riding to it as well as your minimum payment, and then anything else you save from other budget pots

Enjoy! It's been brilliant for us.

Ineedabudget · 9 May 2018 at 11:04AM

Thanks ramblehan, really good advice. I've shown DH my budget so we'll see if he takes it up. He already does his own version of "envelope saving" for his business expenses and is saving towards his own earning buffer within the business account. So already following the principles but without using the software.

I've pretty much spent the last day watching tutorials and reading blogs and feel a bit clearer with what I'm doing. I've been creating savings goals well into the future and looking forward to working on these once the debt is paid.

Thanks for the Tilly Tidy tip. I actually already do this but transfer it into savings as already overpay debts by quite a bit. So far have saved £25 doing this and allocated it to Christmas in the budget.

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