Anyone interested in a YNAB chat/support thread?

[OrangeBlossomsinthesun]

Hi,

I wondered if anyone was interested in a YNAb thread to chat about progress and help each other. I've just started the trial period a couple of weeks ago and, although it's quite a steep learning curve I'm really impressed with it.
I'm freelance so it's important for me to track money and be prepared for fallow periods. I had a thread here with some great advice. I'll add it as there are some good links www.mumsnet.com/Talk/legal_money_matters/4327812-YNAB-help-for-a-freelancer?watched=1&msgid=110514876#110514876

Anyone up for some YNAB chat/support?

So would you reallocate the money from next year's sinking funds towards next month's bills or leave as is? I'm starting to doubt myself now..
It feels nice and clean at the moment and easy to see what I've got as I run my current account lean and put all pots into savings.

It doesn't matter where you have it. That's the beauty of YNAB. I would divide your yearly expenses such as YNAB by 12, then make sure you allocate 1/12th each month so that it's sitting there next year. But, the beauty of YNAB is that you could decide that actually, spending money for your upcoming holiday is more important, so you'll pull all those funds into a 'holiday spending money' category, then 3 months before your YNAB fee comes due, you'll prioritise 1/3 of the YNAB fee per month. As long as you have a plan, it's fine.

An example is that I pay my water bill in 8 equal installments. That means that for Jan-June, I don't pay anything. I could choose to divert that £14.75 to another category in each of those months, or I can choose to just have a bit more money sloshing about for daily expenses...as long as when July comes, I can reprioritise to make sure my water bill is paid, it's up to me.

If you listen to the budget nerds podcast they talk about this a lot. Income replacement fund v 3 months ahead. I don't think they've ever come up with a perfect answer.

If you don't have the toolkit for YNAB browser extension it's worth downloading as there is a "Days of Buffering" option which tells you when your money will run out. Currently it is giving me peace of mind that I won't run out of money before my new pay day. I'm guessing if you've got lots of money in your sinking funds it will give you a date much further in the future?

I'm a very long term YNABer but the one thing I don't like is how it leads to you sitting on big pots of cash once you start to build sink funds. I actually don't have a 3/6 month emergency fund - in part because I've never actually worked out how to calculate how much that should be (a lot of our monthly spends is technically discretionary and could be discontinued quickly if I lost my job) but also because I wanted to increase my investment:cash savings ratio.

But if anyone has worked out how to calculate how much an emergency fund should be (actual salary doesn't make sense to me), I'm all ears.

Well there's nothing stopping you from having a savings account on budget and sticking the sinking funds in there instead. As long as you have enough in the current account and/or an overdraft to pay anything out immediately and then draw it out from there to cover it back again.

I have multiple savings accounts on budget but that's still cash rather than investments. I don't like having investment accounts on budget because they're too volatile, but in reality I have several I could liquidate and the money be in my account in less than a week.

I think it's more on the concept of the emergency fund - do people really have all their sink funds funded and three months of savings sat in a bank account? It just seems like a lot - my age of money is 100 days because of all of the sink funds/long term aspirational savings (eg a big holiday in 2026) and that's without the emergency fund!

I love YNAB and I've been using it for over 10 years, but I found I have to hold myself back from creating more and more categories to save for costs way in the future, or for sink funds to avoid having to wam, because I want to get better returns on my money than sitting in a bank account.

(Sorry if this seems like a stealth boast - I started YNAB living paycheck to paycheck and in the position that if one of our salaries came in after the weekend rather than before we would struggle to buy food for the weekend. It's gotten us though some very tough financial spots over 10 years or so, but I now struggle with losing control and I can see that as we get closer to retirement and needing to fund two kids through university (looking at £100k each on fees as I'm not in the UK) we need to be increasing the actually savings funds we have at more than a savings account will allow).

No idea - I've never been in the position of having 3 months of expenses saved tbh. I guess when you're looking at that kind of savings, you'd probably only need an approximate amount rather than knowing exactly how much it is so if it's in some kind of investment, no worries, just keep it off budget.

It's a tool in the end so you can use it in whatever way makes the most sense for you.

@Luobogao The general consensus around whether to invest or not is will you need it in the next five years? So retirement and university costs for younger children would almost certainly need to be invested.

I listen to the Meaningful Money podcast a lot and they are very big on how you don't need financial advice during the accumulation stage in the UK, but it might be a good idea during the spending stage. If you are approaching needing the money for retirement and university it might be worth talking to your country's equivalent to find out the best way to use your money?

Another bonus of YNAB is my self-assessment for 23/24 is nearly ready to go. Just waiting for my P60 from the day job. I use a spreadsheet for the bookkeeping but being on top of YNAB and having everything appropriately categorised (and needed to know if I need to budget for tax) has made it so much easier.

When people say WAM I assume you’re talking about moving money between categories but I can’t figure out what it stands for haha. Someone please help me out!

'Whack a mole'. We've WAM this month. We save £150 towards Christmas each month. This month we've had some extra expenses, so I've WAM with the Christmas fund. I'll replace it next month. I might have funds saved for MOT in January 2025, but then a car repair bill comes in. To WAM, I use that to pay the bill, then start saving MOT funds again.

Haha thanks! No wonder I couldn’t figure it out haha.

I am definitely having to WAM a lot at the end of the month, as I get paid on the 21st and I don’t think I’ve quite got my head around how much to assign to this month and how much to next. Will be easier hopefully as my age of money increases and I don’t rely on my wage coming in to pay the things due at the end of the month.

Have just been sat working through my YnAB and have read that 39 days age of money doesn’t mean you are a month ahead. That was the vague goal I was working towards, but now I’m wondering how I know I’m a month ahead if I can’t use the age of money for that?

You're a month ahead once you have fully funded all of next month's categories with this month's money I think?

But I might be wrong.

Yes I think that's how it's supposed to work. They did change it as it used to be "live on last month's money" but since they went to the web model, it's officially "age your money"

I don't think the next month thing works hugely well/is so relevant in the UK where most people get paid monthly towards the end of the month. It makes more sense in America where a lot of people get paid once every two weeks on a Friday. If that's what you're used to, then saving all the money you make in February to put towards march's expenses might well be a revelation.

Likewise age of money doesn't work that well with a monthly pay day. That's just an annoyance of the software really. But none of this is hugely important, it's all just different ways to say it's a good idea to build a bit of a buffer, so you don't have to go into overdraft or use credit cards towards the end of the month or be worrying about money coming in on time.

I just set up YNAB last night and I have so many questions!

• Some of my expenses are once a fortnight but, annoyingly, there’s no custom option for weeks - only months or years. I’ve put them in as half the amount weekly instead. Is that the best way to do it?

• I have added my ISA accounts but allocating that money would be last resort territory as they’re from previous tax years. How do other people deal with this? Do I just not add them or do I allocate that money to the investment or retirement category? (Idk what it’ll be used for!)

• I have regular monthly expenses for software and business subscriptions that are charged in dollar amounts so these fluctuate month to month based on the exchange rate. How do others deal with this?

Despite these issues, I can already see how much easier this will be than my existing manual spreadsheet system so I will definitely persevere with it. I’m a freelancer so I often feel like I don’t have enough of a cushion if things go awry and I think this will really help me combat that (somewhat irrational) fear.

@Didsomeonesaydogs Welcome! I had the same issues, and this is how I dealt with them:

• Expenses that don't divide into the given options - yes, I also split mine into weeks.
• I keep my emergency savings account off-budget - @BertieBotts explained very well further up the thread how to do this - it's the post at 14:07, 01/12/23. This means that I can transfer money to and from the account as though it's a separate entity, and can always see the balance on the left with the other accounts.
• For subscriptions in other currencies, I round up to a realistic but generous (in their favour) exchange rate so there should be a nice little buffer in case it goes the other way.

@WouldBeMrMicawber
amazing - that’s so helpful, thanks a million!

Looking forward to getting into it.

If you don't want to allocate your ISA funds then I'd not add them. You can add as a tracking account if you want the fancy graph.

Depends what the amount is - you don't necessarily need a goal for everything. For example DS has €15 weekly for his school lunch but of course he's off school half the year with holidays, half terms etc so when I'm allocating money, I just look ahead for the month in the calendar, work out how many weeks he'll need school food and allocate that much.

Oh and yes I do the same for exchange rates.

@BertieBotts - thanks; I added them as tracking accounts after @WouldBeMrMicawber's helpful post. I hadn't seen that option when I set them up, so I had to set them up again and delete the old ones, as I couldn't see how to change the type of account. I like having them there for the net worth graph, as it gives a more complete picture of my financial position, so I wouldn't not include them.

So, having listened to some of the podcast episodes and heard talk of multiple budgets, I'm wondering if people have an entirely separate budget for their business stuff or if you just keep business expenses as a category group (which is how I've set it up). Or is the purpose of different budgets for when you want to rejig your categories without messing up your history?

On the reddit YNAB forum they are very clear that a business with its own accounts to be kept separate ought to be a separate budget.

I only have our home budget on there but I don't have anything to keep separate.

If I had a business, I would definitely keep a separate budget. Easier when it comes to doing taxes as well.

When I was self employed I had a separate budget for that. I was paid into an account set up specifically for the business too and then paid myself into my personal current account.

@OrangeBlossomsinthesun yes I have a separate business bank account.

I only realised about additional budgets when I was listening to the podcast so had already set up all my accounts and put my business expenses under a separate category header!

Doh! Going back to rejig it all!