Tutorial for: YNAB and YNAB4 Suggested skill level: beginner
One of the most frequently raised issues among new YNABsters is the monthly layout of the YNAB Budget screen. Perhaps you’re paid once a month on the 15th and you want your “month” to run from the 15th of one month to the 14th of the next. Or it could be you’re paid every two weeks and you want the “month” time blocks to be “two week” blocks instead. Or maybe you’re struggling because you have big payments due early in the month so you pay them in the previous month and it’s confusing to budget this month’s income to pay next month’s expenses and you just wish you could adjust the dates on the budget months for goodness sake!
The range of situations and resulting requests seems infinite.
The answer to every single permutation of this can I change the start date question is a simple, No.
But before you throw your hands up in the air and abandon YNAB for not being flexible and bending to your needs, read through my tips below. Hopefully you’ll start to understand why the monthly structure of the YNAB budget screen is a moot point and a non-issue.
Have you ever looked at one of those paintings where there’s a picture in a picture? The only way to see the hidden picture is to let your eyes get a little fuzzy and let your mind relax a bit so you lose focus on the obvious picture and allow the hidden picture to show through.
When dealing with the overall structure of your budget, it helps if you can let your mind relax just a tad because the physical structure of months and accounts and columns — that’s the obvious picture. The continuity and flexibility of YNAB — that’s the hidden picture. It is also the magic of budgeting with YNAB
Follow these steps and and keep these points in mind to avoid getting hung up on start dates, paycheck dates, or billing dates:
1) Forget the whole budget screen and categories for a minute. It is critical that you get your Accounts set up properly and that all of your initial balances are entered correctly from the outset. You need to know that your ATB (Available to Balance) amount is correct from the beginning.
2) Make sure you carefully consider any accounts you’re thinking of putting off-budget. Investment accounts and really long-term savings are good/okay (respectively) to leave off budget but you’re better off putting all short term/regular savings accounts on-budget. If it’s liquid, it should be on-budget.
Remember, it is much more important to start an account with the correct starting balance than it is to start YNAB with all of your accounts in place. In other words, if you do most of your spending from your checking account, then start YNAB with just that one account — but make sure you have your correct starting balance.
If you want to list all of your accounts at the beginning but aren’t sure about their starting balances, it’s better to start with a $0 balance than to start with an incorrect balance.
3) Once all of your accounts are entered with correct starting balances, now you look at the budget screen. Think of your ATB as a big pile of physical dollars and coins piled on your kitchen table. That’s what you have to work with. Now think of what you need to do with your money until the next influx of money will be put on your kitchen table (i.e. your next paycheck).
4) Start dividing up (budgeting/allocating) your pile of dollars and coins into smaller piles (budget categories) according to what needs to be paid immediately/soon/before the next paycheck. Once the immediate bills are covered, allocate some money to everyday expenses like groceries and gas. [Remember, you’re allocating until you get paid again, not until the 1st of the month.]
5) If you run out of money before you run out of jobs that must be covered before you receive income again, go back and reconsider the piles you made. Can you get by with spending a little less on dining out? Maybe you can put off buying that widget for a while? If things are tight, it could take a little effort moving money here and adjusting piles there until the money is divvied up into reasonable/workable piles.
6) Remember that the monthly columns are not physical containers with impermeable sides. They are merely lines on a grid. They are meant to be permeable. If you budget money in June but don’t spend it, those funds easily flow right through the lines into July and beyond. So forget the name of the month and concentrate instead on how much is in the balance column of each category.
7) So you budgeted your ATB down to $0 in June and now it’s July. You thought you’d only need $35 for gas but now it’s still 10 days until your next paycheck, your tank is on empty, and your Gas category balance is $0. You haven’t budgeted anything yet in July; where the heck can you take money from if there are no budgeted values yet this month?
You’ll need to find a category with a positive carried balance. You start by looking down the Balance column in July for categories with a positive carried balance and notice that you budgeted $50 to Spending Money in June but have only spent $20 thus far leaving you with a Balance of $30. In the July Budgeted column for Spending Money you enter -10.00 (Balance is reduced to $20) and then budget 10.00 to Gas.
8) Last but not least, don’t forget that YNAB is all about flexibility. Nothing you “write” down is written in stone. It’s not even written in ink. Adding to (and subtracting from) previously budgeted numbers is not only allowed but expected — especially before you’re buffered and doubly-especially when you’re paid only once a month at some point other than the 1st day of the month.
In other words, don’t feel as though it’s wrong or cheating or against the rules to adjust a previously budgeted amount.