You Need A Budget 4 (YNAB)

You Need A Budget 4 (YNAB)

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Clayfun Jan 25, 2013 @ 9:42pm
How does it teach you to live off of last months income?
I'm enjoying the demo so far but haven't decided if I want the full version.

What I'm confused about is that the videos and description claim that it will help you to work towards living off of the previous months income. For me, when you are budgeting all the money towards something, unless you are building up savings I don't see how you acomplish this. It is helpful for pre-budgeting the big items, but any tips on how the software trains you to live off last month would be greatly appreciated.
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FTWister Jan 26, 2013 @ 12:01am 
You will build a savings sortof. To start living on the previous month income, we have to assume that you are currently living paycheck to paycheck. As you begin to make money in February, you will allocate money into your budget to pay for the things in February. If you live month-to-month, then every inflow dollar you make in February will be spent in the month of February. Thus your available to budget will be zero. To live on last months income, your goal will be to leave a little bit of money as available to budget. In this same scenario, If your inflow money is larger than your budget, then your available to budget for February will be positive. You can see the available to budget will then roll over into March. You can begin to budget these leftover funds to pay for the important bills in March. If you can successfully have a higher income than budget for March, then going into April, there will be a much larger available to budget rollover. Cool! This mean you will be able to budget for April's important bills as well as Dailey expenses. You have planned for Aprils cost while still living in March. At this point as you keep moving forward, you may want to consider building unique savings goals. Instead of going 2 or 3 months of budgeting, you may want to build a vacation fund or whatnot.

As for your bank account, In February, you will have 1 month’s income in your bank account. In March, you will have ~1.5x month’s pay, and by the beginning of April, you will float 2x your monthly pay.

Does that help?
RodeoClown Jan 26, 2013 @ 1:44am 
What FTWister said!

Here's a great article that helps outline how to make it work:
Clayfun Jan 26, 2013 @ 11:22am 
That makes sense. From the walkthroughs and videos it seemed like you should "give every dollar a job" so you should budget everything until you are at a 0.00 balance for budgetting. I'll have another look at what I'm doing.

Thank you for the help.
RodeoClown Jan 26, 2013 @ 12:19pm 
Pushing money forward to next month is also giving it a job, but there's a few ways of doing that.

1 - You can just leave it unbudgeted this month.
2 - You can create a "buffer" category and assign it there
3 - You can split your income transaction and assign a portion of it to Income for this month, and the rest as Income for next month. Each month you try to make the 'next month' portion bigger, until you reach a point where your entire income is assigned to the next month (at which point, you've done it!)
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Date Posted: Jan 25, 2013 @ 9:42pm
Posts: 4