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Original poster

YNAB help for a freelancer

32 replies

OrangeBlossomsinthesun · 20/08/2021 11:02

Hi,

I'm freelance and so my income varies. I think I'm reasonably good with money but because sometimes clients don't pay me on time I feel like I need to get a really tight grip on my money.

I was having a look at YNAB, should I start at the beginning of September when money comes in so I can allocate it?

Do you think YNAb is worth the money?

Do you use the US version? In dollars? I'm in Spain.

Can I input different dates that things will go out? For instance the mortgage goes on 1st of every month but the phone bill goes out mid month. Some invoices come in mid month, how do I square different invoices coming in at different times?

OP posts:
Remoteso · 20/08/2021 11:21

Do it! Get the trial, spend some time working through your budget, watching the videos, once you 'get it' it's a game changer but can take a while to figure it out.

I started on pay day/start of the month, only been using it a few months but it's so much better than other processes which forecast/budget.

With YNAB you assign a 'job' for every penny, and that may be for a future expense. I already have money set aside for Christmas, next year's holiday, new car tyres etc.

You can select the currency you want.

Remoteso · 20/08/2021 11:22

For your invoices that come in mid month you just assign them as they come in. Easy.

Original poster
OrangeBlossomsinthesun · 20/08/2021 11:36

OK I think I will watch a few videos. How do you change the currency?

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Original poster
OrangeBlossomsinthesun · 20/08/2021 11:37

Oh I found the currency. I will watch some videos and try to get my head around assigning stuff

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Original poster
OrangeBlossomsinthesun · 20/08/2021 15:17

OK, I'm sort of getting the hang of it but I keep reading that you can start any time and don't have to wait to get paid. But 2 clients haven't paid and so I literally have no money at the moment, using credit cards until the end of the month for anything I have to pay for. So how does that work? Would it just be easier to start in September when money comes in?

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InJest · 20/08/2021 17:41

I would start today. I'm a big YNAB fan. It can handle irregular income, just add the income the day it appears in your bank account.

For now use the free trial and set up your accounts with today's balances, and then start putting together a budget based on the things you need to pay for until you get paid again.

When you get your next income, look at what bills and expenses are due before you get paid again and allocate euros to those categories.

If you look on Reddit, there is a YNAB community there who can help with questions.

It takes time for it to click, but has been worth it for me.

Original poster
OrangeBlossomsinthesun · 20/08/2021 17:55

It's a bit depressing at the moment because I am in the red, but I think it will be helpful in the long term.

What do you do about categories that are not every month?

For example from October I have to pay the car insurance in 4 installments. Do I create a category for that? If I do, will it appear every month and I'll have to reset it to 0 when I have made the 4 payments?

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InJest · 20/08/2021 18:31

Yes, create a category for payments like that. I would add a 'category group' for bills, and a category for car insurance under that.

That line will then appear in your budget every month. Then you simply top that category up so there is enough in there when the bill becomes due. Dividing the annual amount by 12 is the obvious answer, but with an irregular income that might not always be possible (some months you might need to choose to put that money to food and pay double to your insurance category on a less-lean month). You can set goals for each category with deadlines, so you know where you are in terms of saving for the bill. Once you pay it, that category will go back to zero and then you begin topping up again for the next bill.

It's worth noting that negative balances in individual categories will not carry over to the next month, but positive balances will.

InJest · 20/08/2021 18:32

Oh, I started out in the red too.

I'm now in the black. I wouldnt have done it without YNAB.

Original poster
OrangeBlossomsinthesun · 20/08/2021 18:57

That's great, how long did it take you?

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InJest · 20/08/2021 19:16

It took me about 1 year to get properly out of debt. Then I stopped paying attention and was 2k back in debt within 6 months.

Now I sit down every tuesday and make sure i'm ontop of things - takes 10 minutes. I input things as I spend them (by and large) so I know if I can afford something as I buying it. I'm lucky and have more disposable income now so I have a bigger number of categories and i'm saving up for things for 2022. Sometimes I'll still go over budget, but I make a point of finding a way to balance the books without touching my savings.

Original poster
OrangeBlossomsinthesun · 20/08/2021 20:04

That's encouraging. I have this credit card debt I want to get rid of and also start saving for some home improvements.
I think it will help me a lot particularly because my income is irregular.

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Original poster
OrangeBlossomsinthesun · 21/08/2021 20:03

My water bill comes every 3 months, should I budget for a third every month?

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InJest · 22/08/2021 00:05

Yes, exactly that. If thats not possible, budget more in a good month and less in a lean month.

Its honestly life changing after the initial set-up.

I have the benefit of monthly regular pay, but I can see how it would work just as well with irregular pay. You do just need to prioritise the money you have today to the essentials by date. Eventually you'lll have enough buffer that the dates matter a little less as your pots of money will have enough in them.

Original poster
OrangeBlossomsinthesun · 22/08/2021 00:16

2020 was difficult because as a freelancer my earnings dropped by about half and it's been hard to dig us out of that. I managed to get rid of one cc debt though and had reduced the other one by about half with a tax rebate but it's going back up again with a couple of unpaid invoices this month.
But I think with ynab I should eventually be able to ride those periods. I feel like I need to get a handle on it even more as someone with irregular income.

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Original poster
OrangeBlossomsinthesun · 22/08/2021 00:17

Do you add in all your transactions? So once the mortgage goes out do you have to add that or not because of the category its in? Is it only non essential spends you add in?

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Original poster
OrangeBlossomsinthesun · 22/08/2021 00:18

I've signed up for one of the webinars tomorrow

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NoSquirrels · 22/08/2021 09:24

It’s actually brilliant for non-standard ‘lumpy’ income.

One of its best features- but the one people have the hardest time understanding- is that you only enter income when you receive it. It actively encourages you NOT to forecast. So you only budget with what you have in hand, not what you expect to get. It’s like an extreme dose of reality.

The webinars are brilliant. There’s also a helpful Reddit sub if you want to ask about specifics.

NoSquirrels · 22/08/2021 09:26

@OrangeBlossomsinthesun

Do you add in all your transactions? So once the mortgage goes out do you have to add that or not because of the category its in? Is it only non essential spends you add in?
You enter every transaction- regular or not. Everything you pay out, you enter in.

You can set up regular direct debits to just show up as a transaction automatically on the date they’re paid out. But actually it’s really useful to spend a lot of time daily interacting with your YBAB budget at the beginning because then you really understand how it works.

MoonahStone · 22/08/2021 09:31

YNAB's forum is good for support from other users plus there are 2 brilliant FB groups. The YNAB fans one is the busiest but as it can be very American with lots of talk about health care deductibles I prefer the UK one.

MilduraS · 22/08/2021 09:48

If the YNAB videos don't make it click, have a look at the videos by Nick True on YouTube. I got on well with the YNAB videos but my DH didn't. He almost gave up in frustration but after 30 minutes on YouTube was confidently budgeting. We've been using it for over 2 years now and it's changed our lives. DH saw his salary halve during furlough last year and although it wasn't fun, we were able to see what expenses could be reduced or cut while he was off and knew we could comfortably pay the bills if it lasted for 10 months. If it had happened the year before he would have been in an absolute panic with no savings and no clue how long he could pay the bills for.

NoSquirrels · 22/08/2021 09:56

If the YNAB videos don't make it click, have a look at the videos by Nick True on YouTube.

Yes, great recommendation!

Original poster
OrangeBlossomsinthesun · 22/08/2021 11:09

I'm going to try to watch one of the webinars this afternoon. I have put some numbers in and has a bit of a play but because I'm in the red basically and living on the credit card this month it all feels really meaningless and a bit depressing. I want to try to get a good ish basic understanding this coming week of the beginning of it so I can get going in a meaningful sense once DH paycheck and my invoices appear at the end of the month and beginning of September.

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Prettyconfused · 22/08/2021 13:21

I’ve been a freelancer for years and in my experience it helps to budget a sizeable amount in savings to even out delays/non payments or dry periods. I usually try and save anything above my last 12 months average earnings if I can, at least. Then you can pay yourself a fixed salary at the start of the month, and makes budgeting easier.

NoSquirrels · 22/08/2021 14:40

@OrangeBlossomsinthesun

I'm going to try to watch one of the webinars this afternoon. I have put some numbers in and has a bit of a play but because I'm in the red basically and living on the credit card this month it all feels really meaningless and a bit depressing. I want to try to get a good ish basic understanding this coming week of the beginning of it so I can get going in a meaningful sense once DH paycheck and my invoices appear at the end of the month and beginning of September.
Honestly, stick with it. Fine, you’re in the red - but YNAB will show you by how much, so you’ll be able to make better decisions when the money does come in. Absolutely loads of people start off in the red, don’t panic.

This might help?
m.youtube.com/watch?v=oe8ngOl5oT8