YNAB support thread (2)

[HouseofHolbein]

Just a continuation of the previous one before it fills up!

Yes it does. It just resets all numbers to zero so you have to go in and do your account balances. It's helpful if you've got too far behind.

Hello fellow YNAB-ers. I've been using YNAB since Nov 2023 and love it.

I'm having a change in life circumstances - basically less income - and am wondering where to trim expenditure across my various categories. Can I forward-plan like this using YNAB? The change will start in October.

At the moment I do have targets (e.g. for monthly things like council tax and yearly things like car insurance) but I can't get my head around how to adjust everything to suit a smaller monthly income.

We have sort of done this recently in that we just moved to a house with much higher rent (more than double our previous rent) - what I did was basically work out separately on a spreadsheet what our total monthly income is and then stuck categories in one by one and made a column to add them up.

Where YNAB has come in useful for things like this is that I can use monthly figures for things like bills, but anything like car insurance or clothing where it's either spent as a one off or spent in uneven chunks, I was able to go in (do this on the web version) and look at the income and expenses report and choose averages for some expenses.

So I started out with categories that we HAVE to pay no matter what, then added stuff which we always end up spending even if I think I shouldn't spend, and I tended to overestimate a bit just in case, and it brings you to a point where you can see - OK - those luxuries need to go, these can stay, those can stay but need cutting down a fair bit, etc.

Then I went in and adjusted targets.

We also tried to live on the lowered income for the last couple of months of our old place and put the difference into a "moving fund" which has done very well for us.

@BertieBotts thanks for this explanation and what a good idea to give it a trial run - I do actually have another month before this hits us.

I will follow your idea and use the figures from a typical month from YNAB but just stick it all in a separate document. Not as easy/lazy as I would ideally like 😁 but worth doing. I can definitely reduce some spending e.g. groceries and eating out, cinema trips etc.

Well you can then put it into YNAB by adjusting your targets or even just adjusting your assigned amounts directly.

Try creating a holding category called "Income test" or something and stick the amount your income will drop by in there, then have a play around with how far the remaining salary will get you.

Update: have now done my spreadsheet and put my new targets into YNAB for October onwards. The biggest 'chunks' to cut are groceries and eating out, and since our children will be at university and we have a lot of food in the freezer and tinned stuff, pulses etc I think October can be very frugal to give us a good start. I already have money assigned for Christmas so that feels ok. As for eating out and doing fun things, we'll just have to know that (temporarily, at least) we'll have to change our habits. I'm also not putting anything towards a 2025 holiday for the time being.

@HarpQuartet - sounds like you have a plan in place.

My dc1 is off to uni at the end of this month. It'll be interesting to see what effect the absence of a food-hoover will have on the grocery budget!

Hello again, I've hit a snag and think I might have failed at "giving every dollar/pound a job".

I have to pay for a course I'm taking, let's say £1000. This is fine - I have money in my savings account and have transferred £1000 to my current account and made the payment.

But I only had £100 sitting in my "Hobbies and studying" category. How can I magic the £1000 from my savings account until that category?

Until now I've only allocated our income every month, I've never had to deal with an unusual/extraordinary invoice and payment and not sure how to do it.

Follow-up: does it follow that the amounts I've got allocated to all my categories should add up to the amounts in my current account, savings accounts, ISAs etc? Thank you.

@HarpQuartet Is your savings account 'on budget'? That is, is it included in YNAB?

YNAB doesn't care about where your money lives.

If your savings account is not included in your YNAB budget, then if you didn't have £1000 in that category then you need to reflect what actually happened. You spent £1000 so have £900 or whatever of overspending. You then received money from your savings account to cover it, so you enter the £1000 or whatever you transferred as an inflow from your savings account and assign it to the overspent category.

But if your savings account is included in YNAB as an on-budget account then that money will presumably already have been assigned to other stuff and you'll need to move money from other categories to cover the overspend.

Your 'available' amount should add up to the overall balance of your on-budget YNAB accounts.

Your 'assigned' amount will not.

support.ynab.com/en_us/account-types-an-overview-BkmGM0qCq

This explains the account types. Personally I would always have short-term savings on-budget, especially if, like you've just done, you're likely to be moving money between, as you won't get a complete picture of your budget otherwise.

Thank you @moppety I think my savings account is on budget and that I might need to un-allocate money from one (or more) categories to make this balance. I'm going to need to put some time aside and figure it out!

Yep, basically you've chosen to spend on X which means that the money you had earmarked originally for maybe Y and Z will have to go to cover that X instead.

YNAB philosophy is to find the money first, so when you get that bill, look at your categories and see where you can pull money from, as if you don't check your budget first, you don't actually know if you can afford it or not.

If your savings have already been allocated to categories, you'll need to cover the overspending with money from those categories.

Thank you: my available amount is similar but not identical to my balance and I'm going to look at that explanation of the account types now. I think I MIGHT have dropped the ball and not assigned everything very sensibly, got to get my head round it. When you first set up YNAB and say you have an ISA with £5k in it, did you assign that £5k to (say) saving for when you need a new car?

I've made a category called 'money we can't touch' for things like that, and actually I think I do need to have specific goals instead for absolutely EVERYTHING like education, health, holidays etc. Then be prepared to move it around e.g. if I want to go on a training course but don't have the money in that category, perhaps I re-assign from the 'new car' fund, knowing that that means I'll not be able to afford a new car yet.

OK, reading that article I've definitely got some account types wrong. Thanks everyone for helping, I'll go away and do some work on this.

Yes basically this. So when you put your ISA in originally, say it had 5k in it, you would have found that 5k sitting in ready to assign and have been expected to give it all jobs.

It's fine to give money a job like "emergency fund" or "don't touch" or "savings" or "new car".

It is quite helpful actually because you can then really see - yes doing this course will be good, but look how much further it takes me from my goal to save for a new car. Am I happy with that?

Yes, I've been looking at it and realised that thr "money I can't touch" is actually real and available (phew - I'd got myself into a head scramble). I do think that mapping it out to real-life goals would help my planning more than having it in an MC Hammer category.

I actually read that like MC Hammer song

Not an issue when you YNAB

Ok I think I'm getting the hang of ynab and what's it's taught me is that I'm definitely spending too much money (on the kids!). I'm hoping to get a payrise next month and I'm determined to save it rather than fritter.

I've just spent far too much time trying to reconcile my accounts 🤣🤣 not sure what I've done but YNAB thought I had more money than I do.

YNAB and my bank accounts now agree. Have decided to reconcile every week from now on to help prevent this 👍

Done loads of overtime this month so looking forward to payday but still missing being paid every 4 weeks 🤣🤣

Have gigs to book as soon as they go on sale... have the money waiting in a pot along with hotel money 😊

Hope everyone is doing ok?

I'm a weekly reconciler @HouseofHolbein - it's my Friday night treat! That just shows how sad I am!

Ds is off to uni in just over a week's time. I've helped him set up his YNAB budget. Fingers crossed he remembers to interact with it!

I also reconcile regularly love the little celebration confetti on the app

I do normally do it regularly but I've been doing loads of extra hours at work and it's just slipped. It was only about 25 days but I just couldn't work out where I was wrong 🤦‍♀️