View Full Version : Financial tracking
This really should be in the Survival/Preparedness sub-forum (because the first part of being prepared is limiting financial issues), but I want maximum exposure in case there are some users who still exist that don't just click "new posts" like me.
I'm about to go through my 2016 financials by documenting all the spending I did in 2016 by month, hopefully including some graphs or pie charts. The best way to understand ones finances is to see where every single dollar is going. My plan is to use a combination of Mint and either Google Docs and/or Open Office to create the appropriate desired spread sheets. What programs do you use to help track financials?
Mint actually does a great job of tracking everything you allow it access to, as well as providing mostly helpful pie graphs of your spending. At the beginning of this year I decided that I would go through ALL of my spending, each month, and drop it into a monthly spread sheet on Google Docs to see where stuff was going. I was doing it manually and it was a monumental pain in the behind and I did it up until February. Mint will make this easier. I'm reluctant to register with yet another site/app/etc, but would like to see what you guys are using for future reference.
I may end up posting an update when I'm done if there is anything interesting like how much we spent on alcohol in 12 months (I'm guessing over $500 and under $1,000), how much I actually spent on gun related things compared to how much my wife thinks I did, how much I spent on gas (I think around $3,000, but it's been a while since I checked), etc.
Just for additional fun, here is a thread I started in 2013 that I thought was interesting, but ultimately never went anywhere. Perhaps I'll revisit this idea again sometime this year. https://www.ar-15.co/threads/97557-How-much-money-could-you-make-with-1-000?highlight=make+%241%2C000%3F
Here is another thread started by Bailey Guns that needs an update: https://www.ar-15.co/threads/143439-Lending-Club-Anyone-Invest
good timing I am starting my money moustache again and am going to be tracking these things much better instead of checking my account balance and saying eh i have enough
I am a YNAB (You Need A Budget) user. Been using it consistently for 3 years now. YNAB is really like a digital "envelope system", meaning you have X amount of money, how are you going to spend it? Groceries, Gas, saving for a car/vacation, paying off debt, etc. Every dollar gets a job, before the month begins. I budget the previous months income for the current months spending, which makes the budgeting process easier.
All that said, it wouldn't be good for looking back at the years spending. Mint might be the best for that. If you are diligent with YNAB, at the end of the year you can run plenty of reports to see where your money has gone.
FYI I use the YNAB classic version, which was a 1 time purchase and you own the software for life. They have gone to a monthly subscription model now, but with automatic imports from your bank. I believe someone has taken the YNAB classic model and is selling it now, but I can't recall the name right now.
I've definitely heard of YNAB. Would you say that it's had a positive affect on how you spend/save your money?
My wife is really good with Excel. She has our budget going out for about 5 years. I'm much more vague about my financials. I know where I want to go and work toward it without being fixated on when life happens.
So just this year (from the last week of February) I spent $3,462.28 on gas. That's just for my work vehicle. I haven't run the numbers yet, but I'm thinking that is 95% (likely even higher) for work travel, which means I can write most of that off.
At that amount, it's almost, per month, what our health insurance will cost for 2017. I do this stuff for fun, and because I find it is interesting to put things into perspective. If I included the few tanks I ran that were not work related, and all of my wife's gas which is much, much, much less, then I bet we that money spent on gas is about the same as what health insurance will cost.
GilpinGuy
01-02-2017, 00:39
You get family health ins for <$400/month? Damn......
I'd have started a thread on health insurance also, but the deadline was coming up and it seems like it is a subject that might be too personal for open discussion on here.
The lowest we found that wasn't Obamacare was in the $700/mo range, which might as well be another mortgage. There are other options that work out much cheaper, but don't qualify as "good enough" for that shitty "law" (tax) and still get you a penalty at the end of the year.
I changed jobs in 2016 which allowed us to get temp insurance with similar coverage for around $200/mo. My wife ran the numbers and we could have done the same thing this year, and even after paying the highest penalty amount would have saved thousands of dollars, but my parents threw a fit at the idea.
I'd have started a thread on health insurance also, but the deadline was coming up and it seems like it is a subject that might be too personal for open discussion on here.
The lowest we found that wasn't Obamacare was in the $700/mo range, which might as well be another mortgage. There are other options that work out much cheaper, but don't qualify as "good enough" for that shitty "law" (tax) and still get you a penalty at the end of the year.
I changed jobs in 2016 which allowed us to get temp insurance with similar coverage for around $200/mo. My wife ran the numbers and we could have done the same thing this year, and even after paying the highest penalty amount would have saved thousands of dollars, but my parents threw a fit at the idea.
We have membership in a "healthshare ministry". Maxes at $450 per family ($150 per person x3 -- $0 after for additional). Has a $500 per incident co-pay at highest level, so "wahhhh I have sniffles = Doctor" wouldn't be good for it, but "Is that my tibia?" would be fine. Let me know if you are interested in learning more about it.
Big fan of Mint, once you get it trained. Without training it constantly mis-categorizes everything.
My wife is really good with Excel. She has our budget going out for about 5 years. I'm much more vague about my financials. I know where I want to go and work toward it without being fixated on when life happens.
I use Excel for monthly budget/actuals too.
Every bank service I've used is inaccurate and fails to properly categorize including one time expenses that I want isolated.
With Excel the data is mine. Each month I have to close our accounts and categorize by lines. Probably 30 minutes of work.
I use Excel for monthly budget/actuals too.
Every bank service I've used is inaccurate and fails to properly categorize including one time expenses that I want isolated.
With Excel the data is mine. Each month I have to close our accounts and categorize by lines. Probably 30 minutes of work.
The plan is to use Mint to see all transactions from all sources from each month, in one place, to then take that data and drop into an Excel spread sheet. The problem will remembering what certain uncategorized, or miscategorized transactions were from a year ago. Since it's just person data for my own interests and future planning, an unknown transaction here and there won't be a big deal.
We have membership in a "healthshare ministry". Maxes at $450 per family ($150 per person x3 -- $0 after for additional). Has a $500 per incident co-pay at highest level, so "wahhhh I have sniffles = Doctor" wouldn't be good for it, but "Is that my tibia?" would be fine. Let me know if you are interested in learning more about it.
I'm interested in the concept, but I won't waste anyone's time if it involves joining a church. Only because I don't feel comfortable presenting myself as something I'm not just for benefits. Thank you for mentioning.
I'm interested in the concept, but I won't waste anyone's time if it involves joining a church. Only because I don't feel comfortable presenting myself as something I'm not just for benefits. Thank you for mentioning.
No church membership is required of which I'm aware (though my wife handled all the paperwork). We're Catholic and I'm fairly sure this healthshare is some non-denominational outfit, not associated with any particular denomination.
http://www.chministries.org/faqs.aspx
http://www.chministries.org/howitworks.aspx
I'm not eligible for CHM because I use dip (apparently being a fatass who eats horribly is not as bad as the devil's wintergreen delight, but I digress -- stupid Calvinist influence!). I'm "covered" for Obamacare purposes via the VA, being med retired.
Hmmm, I will look into this, and I hope others do as well. Thank you for the tip. Being self-employed can be rough for insurance.
Hmmm, I will look into this, and I hope others do as well. Thank you for the tip. Being self-employed can be rough for insurance.
Even if you don't go with them, there are others around. We found CHM was the most financially sensible for us, but YMMV.
Thanks. I'm looking at $300 for cobra if I leave work
The plan is to use Mint to see all transactions from all sources from each month, in one place, to then take that data and drop into an Excel spread sheet. The problem will remembering what certain uncategorized, or miscategorized transactions were from a year ago. Since it's just person data for my own interests and future planning, an unknown transaction here and there won't be a big deal.
That's not a bad plan.
My "one time" line is for those unknowns that don't fit anywhere else. I add a comment in Excel to indicate what it was.
For example... "AR15 build" How many times does that happen? ;)
What do you put for withdrawing cash for buying an item off of here, or Craigslist? I would decide based on what I'm buying it for, i.e. "home improvement" or "recreation."
What is your category for withdrawing cash for going to the casino or strip club? Recreation?
What do you put for withdrawing cash for buying an item off of here, or Craigslist? I would decide based on what I'm buying it for, i.e. "home improvement" or "recreation."
What is your category for withdrawing cash for going to the casino or strip club? Recreation?
"Vacation" :)
I group "one time" things up for each month, so say I spent....
Lower $80
LPK + Stock $160
Upper $400
RDS $300
I would book $940 for "another AR15."
Same thing on a vacation: Flights + Hotel + Dining + Misc = "Vacation"
Incidentals is a line for us and has a CC amount and cash amount so I just book the CC amount + cash spent. After a few months we can budget what we spend on that line (meals out for example) and know when to cut back or we can splurge.
Remaining cash is totaled with account balances at the end of the month. Just because I got it out of the ATM doesn't mean it's been spent so we get credit for cash (money) that we haven't spent.
What is your category for withdrawing cash for going to the casino or strip club? Recreation?
"Entertainment"
Honey Badger282.8
01-02-2017, 19:58
Mint is like a free version of Quicken, it works but not as well. 90% of my non-fixed spending is done on my AmEx, I like the way it calculates everything.
My spending is primarily on my cash back Amex or my bank card. Makes things simple. My other credit cards get sad and send me letters so I remember I have them.
I've definitely heard of YNAB. Would you say that it's had a positive affect on how you spend/save your money?
I'm another YNAB user and yes it has. I've also used Mint and Quicken (over five years ago) and those didn't seem like anything other than an expense categorization engine. Maybe that's all you're looking for and those would be fine. But YNAB had a different philosophy to it which changed the way I looked at money. This philosophy is baked into how you use it, so it took some getting used to and several hours reading their blog posts and watching YouTube videos. But once I got it, I broke my paycheck-to-paycheck living within two months and never looked back. It encourages you to "spend last month's money" so you're always riding on at least a 30 day cushion. That fact is what was so liberating: with minimal weekly maintenance I don't worry about money anymore; my bills are all on autopay and I don't have to worry about not having enough money to cover it. Plus by checking in at least weekly I make sure I'm staying aligned with my budget and savings goals, but that is not a feature unique to YNAB.
Another part of what I like about YNAB is they know that s*** happens, and the program is written to be flexible when you need to move money between pots or modify your budget etc. Also they make it easy to plan for those yearly recurring expenses like car insurance, Amazon Prime, etc and budget for them monthly so that when the next renewal rolls around you already have the money saved up and don't have to scramble.
Budgeting and tracking expenses is a good, granted.
What I'm wondering, for folks doing this, is how much this tracking results in expenditure reduction in an effort to build budgetary surplus.
Is this an exercise in simply knowing where one wasted money, had too many extraneous luxuries, etc., or is it an exercise to ID and reduce for a more minimal, yet rewarding, lifestyle?
Having a surplus for surplus's sake is hard to do because there's little meaning behind it, so you don't feel bad about cheating on it. One of the rules of YNAB is to "give every dollar a job." For me that means when I'm saving, it's for something specific, like "vacation fund" or "house repairs" or "retirement" etc. Having unallocated money in your budget is just an invitation to waste that money, IMO. Minimize your living expenses* so you can maximize progress toward your goals.
* To whatever level works for you. I choose not to go "Full Mustache" for example.
Tracking your expenses on a regular basis and checking progress against your budget is a good way to remind yourself not to spend money. I want to hit my goals each month for my savings categories, so looking at my budget category balances reminds me of how "little money" I have to play with. If my wife and I want to splurge on a nice dinner out, we need to take that money from somewhere else. If you're just looking at your bank account balance, it's easy to think "I have plenty of money!" YNAB helps me remember that all of that money already has a job. That helps me avoid wasting money.
Having a surplus for surplus's sake is hard to do because there's little meaning behind it, so you don't feel bad about cheating on it. One of the rules of YNAB is to "give every dollar a job." For me that means when I'm saving, it's for something specific, like "vacation fund" or "house repairs" or "retirement" etc. Having unallocated money in your budget is just an invitation to waste that money, IMO. Minimize your living expenses* so you can maximize progress toward your goals.
* To whatever level works for you. I choose not to go "Full Mustache" for example.
Tracking your expenses on a regular basis and checking progress against your budget is a good way to remind yourself not to spend money. I want to hit my goals each month for my savings categories, so looking at my budget category balances reminds me of how "little money" I have to play with. If my wife and I want to splurge on a nice dinner out, we need to take that money from somewhere else. If you're just looking at your bank account balance, it's easy to think "I have plenty of money!" YNAB helps me remember that all of that money already has a job. That helps me avoid wasting money.
Pretty much everything said above. I've known for a long time that I have difficulty saving just to save. I do best by 1) over paying on any loans, 2) saving for a very specific purpose. I had comfortable finances for years, but being able save a large amount of money as a cushion was also the catalyst I needed to take me to the next level to realize that the "good" from before is now below my personal standards.
YNAB has been incredibly helpful for our finances. My wife is a dentist, and came out of school with massive student loan debt. We have always wanted to pay it off quickly. Our first couple years our method was that at the end of the month any money over a certain level in the checking account we put towards the loan. I started YNAB in Jan 2014 and we have made huge strides in paying off the loan.
The difference is that we decide at the beginning of the month he much we are going to spend and how much we will put on the loan. It's easy to see that if you want to spend $500 on eating out, it's going to effect how much goes to the loan.
Granted, we haven't had a month yet where we didn't go over in some category, but YNAB makes it easy to move money from one category to another.
Sent from my iPhone using Tapatalk
Having a surplus for surplus's sake is hard to do because there's little meaning behind it, so you don't feel bad about cheating on it. One of the rules of YNAB is to "give every dollar a job." For me that means when I'm saving, it's for something specific, like "vacation fund" or "house repairs" or "retirement" etc. Having unallocated money in your budget is just an invitation to waste that money, IMO. Minimize your living expenses* so you can maximize progress toward your goals.
* To whatever level works for you. I choose not to go "Full Mustache" for example.
Tracking your expenses on a regular basis and checking progress against your budget is a good way to remind yourself not to spend money. I want to hit my goals each month for my savings categories, so looking at my budget category balances reminds me of how "little money" I have to play with. If my wife and I want to splurge on a nice dinner out, we need to take that money from somewhere else. If you're just looking at your bank account balance, it's easy to think "I have plenty of money!" YNAB helps me remember that all of that money already has a job. That helps me avoid wasting money.
Makes sense. I'm kind of in this weird place now where I'm making more than I've ever made, but yet I know I can't approach it like that. I know that if I do enter into "I have plenty of money!" land, I'll very soon have not plenty of money.
I'd like to combine a stricter budget with minimizing, not to simply save for the sake of saving -- that can instill a miserly attitude. But for the sake of saving for harder times, etc. Hopefully, between both minimizing and stricter budgeting, the leaner times would be seen as an adventure in prior planning rather than a nail biter.
Budgeting and tracking expenses is a good, granted.
What I'm wondering, for folks doing this, is how much this tracking results in expenditure reduction in an effort to build budgetary surplus.
Is this an exercise in simply knowing where one wasted money, had too many extraneous luxuries, etc., or is it an exercise to ID and reduce for a more minimal, yet rewarding, lifestyle?
It's huge for me.
There are some lines we just can't move, like you'd expect. Healthcare is one of them. If my kiddo gets sick and needs an office visit, he's getting it. If he ends with Rx, he's getting that too.
I can move the mortgage payment by decreasing/increasing principal, but there's a floor there too.
All other consumables (non-contract) can move. We can eat higher quality/lower quality, shift our menu. We can give up a trip to Springs to see family. We can decide on a one time purchase/vacation. We can track cost of ownership of our cars that has helped us decide how/when to buy.
Knowing is the first step. It's also rewarding to complete a month under budget and see that $$$ move to a savings account. Yes, interest is crap (my wife is actually working on moving some money now). It's disappointing to be over budget but then we can look and see how to make it up to meet a year end goal.
Makes sense. I'm kind of in this weird place now where I'm making more than I've ever made, but yet I know I can't approach it like that. I know that if I do enter into "I have plenty of money!" land, I'll very soon have not plenty of money.
I'd like to combine a stricter budget with minimizing, not to simply save for the sake of saving -- that can instill a miserly attitude. But for the sake of saving for harder times, etc. Hopefully, between both minimizing and stricter budgeting, the leaner times would be seen as an adventure in prior planning rather than a nail biter.
Awesome, that's an exciting place to be in life. If approaching things from a preparedness mentality helps you adhere to your plans, go for it. The confidence that it will give you, knowing you can quit that job if you want or hit a speedbump and not be destitute next week or even in several months, is a wonderful feeling.
I don't want to sound like a YNAB evangelist (I know, "too late!") but I really believe in it because like I said it changed my life. Their philosophy is worth checking out even if you don't use their software. Check it out here: https://www.youneedabudget.com/method/
And if you do decide to use their software, in addition to the official YNAB webinars, Reddit is a good resource for learning how other people use it: https://www.reddit.com/r/ynab/
Cav, you are a prime candidate for jumping into the early retirement movement. Mrmoneymustache is the most popular, but there are many different blogs, including a military one.
Grant H.
01-03-2017, 23:00
No church membership is required of which I'm aware (though my wife handled all the paperwork). We're Catholic and I'm fairly sure this healthshare is some non-denominational outfit, not associated with any particular denomination.
http://www.chministries.org/faqs.aspx
http://www.chministries.org/howitworks.aspx
I'm not eligible for CHM because I use dip (apparently being a fatass who eats horribly is not as bad as the devil's wintergreen delight, but I digress -- stupid Calvinist influence!). I'm "covered" for Obamacare purposes via the VA, being med retired.
We have CHM, and it works for us. After 2015 for me, we have upped our coverage to the gold plan.
We only use doctors when it's catastrophic, and likely when we start having kids, so it is a good fit. As has been said, it's not good for the "OMG, I sneezed... Going to the doctor" crowd.
As for budgeting, we use a system of my own creation that is based on Financial Peace University (Dave Ramsey), the envelope system, and general logic.
Instead of dealing with cash for the envelope system, I modified it by creating a series of free bank accounts at Chase.
1: Checking - Operational for groceries and general expenses
2: Checking - Operational for Utilities and mortgage
3: Checking - Discretionary for Me
4: Checking - Discretionary for Her
5: Savings - Savings account
6: Savings - Insurance, taxes
7: Savings - Maintenance - House, vehicles
When I log in to online banking, I see all the accounts, and can move funds in/out of each account as necessary without any fee's/hassle.
Being a contractor, and a sometimes delinquent personal billing machine, I can't really use a normal budget since I don't have a consistent paycheck. I make good money, but the swings in monthly income make me have to average my expenses across months.
We have CHM, and it works for us. After 2015 for me, we have upped our coverage to the gold plan.
We only use doctors when it's catastrophic, and likely when we start having kids, so it is a good fit. As has been said, it's not good for the "OMG, I sneezed... Going to the doctor" crowd.
As for budgeting, we use a system of my own creation that is based on Financial Peace University (Dave Ramsey), the envelope system, and general logic.
Instead of dealing with cash for the envelope system, I modified it by creating a series of free bank accounts at Chase.
1: Checking - Operational for groceries and general expenses
2: Checking - Operational for Utilities and mortgage
3: Checking - Discretionary for Me
4: Checking - Discretionary for Her
5: Savings - Savings account
6: Savings - Insurance, taxes
7: Savings - Maintenance - House, vehicles
When I log in to online banking, I see all the accounts, and can move funds in/out of each account as necessary without any fee's/hassle.
Being a contractor, and a sometimes delinquent personal billing machine, I can't really use a normal budget since I don't have a consistent paycheck. I make good money, but the swings in monthly income make me have to average my expenses across months.
Grant,
We have the Gold plan+Brother's Keeper (the kicker required for BK is negligible and I highly recommend it if you don't have it). When our 1st son was born, the self-pay rate at the hospital was a final bill of $4000, and CHM covered everything involved. He was also covered under my wife's coverage for all the well-baby visits, etc. Once that window closed we added him to the plan. When our next one comes, it will cap us out at the $450 per month, per family for Gold plan.
If you have any questions about things relating to getting pay plans set up with the docs, hospital, etc. so CHM can pre-cut the check, please let me know -- my wife is good to go on navigating that.
At my last job I literally laughed at HR when they told me the rates for the health insurance because of the cost vs coverage comparison of it and CHM -- CHM being much more sensible. The key for us has been to simply save that extra money for when the sniffles happen and it doesn't meet the onus of the incident deductible. I'd have to go back and look at average healthcare costs for us vs what it would have been under insurance, but I'm 99% sure we saved money with CHM.
Is that CHM plan considered a "high deductible" plan or is it otherwise eligible for having a Health Savings Account?
BushMasterBoy
01-04-2017, 10:50
Try to think in pictures and not numbers and words. The more you own, the more you have to take care of.
Is that CHM plan considered a "high deductible" plan or is it otherwise eligible for having a Health Savings Account?
This is my question as well. Will you be penalized for not having health insurance of the toe the government wants you to have?
This is my question as well. Will you be penalized for not having health insurance of the toe the government wants you to have?according to the faq page it gets you out of the obamacare penalty
Is that CHM plan considered a "high deductible" plan or is it otherwise eligible for having a Health Savings Account?
I don't know what all that means. I'd contact them for anything particular.
This is my question as well. Will you be penalized for not having health insurance of the toe the government wants you to have?
It meets the onus for MarxistCare.
Self-employed business owners! What do you use for a 401K, RothIRA, IRA, whatever? I completely neglected setting one up last year and there's not time better than present. Please lend ideas on what you use for pre-tax retirement accounts.
Edit: My aim is to set-up an index fund for this, but I don't know what I can and can't do. If it's just as simple as setting up a retirement account through Vanguard, then that's what I'll do.
Grant H.
01-08-2017, 10:06
Grant,
We have the Gold plan+Brother's Keeper (the kicker required for BK is negligible and I highly recommend it if you don't have it). When our 1st son was born, the self-pay rate at the hospital was a final bill of $4000, and CHM covered everything involved. He was also covered under my wife's coverage for all the well-baby visits, etc. Once that window closed we added him to the plan. When our next one comes, it will cap us out at the $450 per month, per family for Gold plan.
If you have any questions about things relating to getting pay plans set up with the docs, hospital, etc. so CHM can pre-cut the check, please let me know -- my wife is good to go on navigating that.
At my last job I literally laughed at HR when they told me the rates for the health insurance because of the cost vs coverage comparison of it and CHM -- CHM being much more sensible. The key for us has been to simply save that extra money for when the sniffles happen and it doesn't meet the onus of the incident deductible. I'd have to go back and look at average healthcare costs for us vs what it would have been under insurance, but I'm 99% sure we saved money with CHM.
We have Brothers Keeper. My bills last year ended up over $1.3mil. The silver plan wouldn't even begin to touch that.
Well, since we are both in BK I'm glad to have helped! :)
Grant H.
01-08-2017, 14:04
Well, since we are both in BK I'm glad to have helped! :)
Unfortunately, I wasn't on the gold plan/BK when that all happened. I upgraded to that afterwards. Thankfully other sources of aid/support were provided to cover that whole fiasco.
The fact that I went from feeling "off" on a Sunday to starting my 40 days in the hospital on Friday the same week, and then 2.5 months at home with home care, just reinforced the need for catastrophic to be unlimited. So, up the coverage went...
Self-employed business owners! What do you use for a 401K, RothIRA, IRA, whatever? I completely neglected setting one up last year and there's not time better than present. Please lend ideas on what you use for pre-tax retirement accounts.
Edit: My aim is to set-up an index fund for this, but I don't know what I can and can't do. If it's just as simple as setting up a retirement account through Vanguard, then that's what I'll do.
I use https://fuerstfinancial.website.raymondjames.com/. I have a SEP IRA, created by a former employer, that I converted to a standard IRA with the previously linked guy.
Jordan is a great guy, who has shown good returns with my IRA even through the slump that most were happy to just not loose much.
Self-employed business owners! What do you use for a 401K, RothIRA, IRA, whatever? I completely neglected setting one up last year and there's not time better than present. Please lend ideas on what you use for pre-tax retirement accounts.
Edit: My aim is to set-up an index fund for this, but I don't know what I can and can't do. If it's just as simple as setting up a retirement account through Vanguard, then that's what I'll do.
I've spent a few hours looking into this, and this was the best explanation of the main self-employment retirement accounts I could find.
Solo 401(k) vs SIMPLE IRA vs SEP IRA
http://www.obliviousinvestor.com/sep-vs-simple-vs-solo-401k/
You can even do a Solo Roth 401(k) which will allow you to have both pre-tax, and post-tax funds, for those of you who aren't sure if you'll be in a higher, or lower tax bracket when you retire. Best of both worlds? Worst of both worlds? I don't know, I haven't researched that position yet.
Anyway, with a possible max annual contribution of $54,000 for a both a Solo 401(k) and a SEP IRA, (but easier to do with Solo 401(k)), those both look way more useful than the standard IRA or Roth IRA with a max annual contribution of $5,500. I think for me, the above two mentioned are the way I'll go.
Grant H. I just now saw your response (thank you) and am off to read the link you posted.
I'm half way through my free 34-day trial with YNAB. I really like what they have going, and I completely understand the concept, BUT I can't wrap my head around the way their system works. I've spent hours looking through the FAQ and How-To pages, watched some videos, but I can't get it. I'm missing something, but I'm not sure what it is. How long did it take everyone using it to feel comfortable with the software? I feel like I'm creating a ton of categories (too many) to put all the spending somewhere. I don't understand why the system doesn't understand what a credit card payment is, or what a finance charge is. How do you categorize a transfer from another account? What about a transfer from another bank? I really want to use this system, and even pay to use it, but not until I can get it to run smoothly.
Where did everyone start? Maybe I just jumped in and tried to do everything and missed a step.
Do you have your credit card accounts set up as "on budget" accounts? Thats the default option. In that case, when you make a payment to a credit card, you set the payee as "Transfer to [cc account name]". A corresponding deposit transaction will automatically be created in the credit card account. If you manually entered or imported a payment transaction, match it with the auto created one.
Do the same thing when transferring money between any other accounts...don't assign a category to it, change the payee to "transfer to ..."
I'll try to respond more later, my kid just got out of bed....
I saw the video about changing the payee. I'll try to find that again. I had a whole page of How-to's at one point, but I can't seem to find that page again.
I'm not sure I have the credit card accounts as "on budget" accounts, and don't really know how to set that up. I'm eagerly awaiting your response, but of course take your time. It's the weekend.
ETA: OK, I know this is a huge wall of text. I'm sorry for being so verbose but I didn't have time to write a shorter message. Hope this is helpful.
I assume you are using the web application version of YNAB (sometimes referred to as nYNAB) as opposed to the old version that you install locally on your computer. Is that correct?
When you went to add your credit card account, you probably clicked on Add Account and then in the Account Type drop-down box selected "Budget -> Credit Card". If so then you're good, this account is considered an on-budget account and it will enable more functionality.
The way nYNAB handles credit cards is pretty wonky. I've only been using nYNAB since July and I still don't feel like I understand it 100%. But here's what I do know. nYNAB handles them pretty much like a checking account in that anything you spend on it immediately impacts your budget. If you're used to handling a credit card like a monthly payment or as one step removed from your day to day finances you need to cut that out. To go further, let's set up a hypothetical scenario which should be illustrative.
Let's say you go out to dinner and spend $50 at a restaurant using your credit card. You add/import the transaction to YNAB and assign it to the Restaurants budget category. When you go back to the Budget screen you will see a yellow "-$50" in the right-hand column of the Restaurants category (let's just assume you have not budgeted anything for that category this month and this was the only transaction for that category). The yellow means that you have overspent this category and the overspending is on a credit card. If you had used your bank card instead, the "-$50" would be red. More on this in a sec. So now you allocate $100 from your "To Be Budgeted" pool to the Restaurants category. Now you have a green "$50" bubble in the Available column of the Restaurants budget category. But something else has changed as well. Scroll down in the Budget screen until you get to the Credit Card Payments section. Your credit card has a line in this section like it's another budget category, but it behaves differently from the others. Whenever you cover your credit card spending by budgeting funds to a category that contains credit card spending, YNAB automatically updates the Available column for your credit card. So if you click on the line in your budget for your credit card account, it will show you that the number in the Available column is what is available for you to pay off your card. So whatever that line had before, when you budgeted enough to cover your new restaurant spending, the Available number increased by $50.
Now it's the end of the month and you've gotten rid of all the yellow bubbles in your budget by allocating enough from your To Be Budgeted pool to each of the budget categories. Now go back to the credit card line in your budget and whatever's in the Available column is what you should pay on your card. Make that payment, and then create a Transfer transaction in your checking account register, with the payee as your credit card account. YNAB will recognize this as a "credit card payment" and the Available amount on the credit card budget line will go to zero (or be reduced by whatever your payment was). If you close out a month with any yellow bubbles left in the budget and/or any green amount left in the credit card line, you will be increasing the debt on your credit card.
But here's where we get back to the red bubbles. Those are uncovered expenditures from your checking account (i.e., hard dollars that are gone). When you're going through the month and attending to your budget, you need to close out all the red bubbles first, because that money is gone daddy gone. You cannot budget $5000 to your vacation fund and leave 10 categories red...YNAB will not be in sync with reality and you'll think you have more money than you really do. Then once you have covered all your hard spending with funds from your To Be Budgeted pool, now you can go on and allocate funds to budget categories that have yellow bubbles. Once all those are gone, now is when you get to start saving money by allocating it to whatever budget category you want to save up for. If you don't have enough funds to close out all the yellow bubbles, whatever the bubbles add up to is the additional debt you've created that month.
So budgeting in YNAB is supposed to be a fluid thing. You're not supposed to just do $300 for groceries, $200 for restaurants, $200 for gas (or whatever) every single month. YNAB sets you free from that unrealistic rigidity. This is one of the things I love about budgeting with YNAB...it's flexible and you adapt it on the fly to meet your needs. It still takes self discipline to attain your goals and not spend too much on things you shouldn't, but at least the budget itself is not beating you over the head with how much you suck. I forget which YNAB rule this supports, but once you know the system it works beautifully, at least compared to the other budgeting programs I've used before. You get structure to support your goals, but enough flexibility to keep up with real life and not get discouraged.
Ideally once you are able to start saving, you can build up to pre-funding your budget categories for next month. So you allocate $1000 for rent (or whatever) on this month's budget, and it stays there green and pretty until it gets spent next month. Then once you get paid next month, allocate some of that money towards the following month's rent. And so on. Once you are able to do this for most of your expenses, now you're riding a one-month cushion.
Oh yeah, one more thing. When you're going to look at whether you can "afford to" (within your budget) go out to another restaurant or whatever you want to do, DO NOT look at your bank account balance. I almost never log in to my bank's website anymore. You may only look at your Category balances within YNAB. For this I love using the YNAB app on my phone. It's not very useful for adjusting your budget, but it's great for entering transactions as you go (the best way to do it...when you import from your bank it'll automatically match imported transactions with the ones you manually entered) and for checking your category balances before you make that purchase.
I meant to tell you that I saw your response today, but was driving so I've yet to read it yet. Thank you.
Just read through and you answered a lot of my questions, even ones I haven't asked yet. Thank you again. I'll have to go through my accounts and re-read your help here a few times to square everything away.
If you're not looking at your bank account to see what you can afford, where do you look? For example, I buy a gun maybe once every two years or so, but don't plan on creating a budget category for gun purchases. Where would I look for spending availability, To Be Budgeted?
I forgot you asked about budget categories. I just looked and I have 48 budget categories divided up among 11 category groups. Here they are. I order them by which ones we tend to overspend in most so that every time I open the budget, those categories are font and center.
Food - restaurants, groceries, lunches
Discretionary - big ticket items, gifts, entertainment, slush funds*
Everyday Expenses - haircare, hygeine, clothing, household goods, dogs
Cars - car payment, insurance, gas, maintenance, taxes & registration
House - mortgage, repairs, improvements
Monthly Bills - Student loans, cable/internet, phone, utilities, daycare, gardening
Credit Card Payments
Health - medical, dental, vision, doggie medical
Education - (anything that is tax-deductible W/R/T education) Tuition, classroom supplies (my wife is a teacher), books & supplies, misc
Misc - (catch-all category for bad stuff, should be $0 in this section) off-budget payments, interest & fees, Target uncategorized**
Savings Goals - vacation, retirement, Health Savings Account, college
* Slush Funds: My wife and I each have our own "slush fund" budget categories. After all the bills are paid and before we start saving money, we allocate equal amounts of money per month to each of our slush fund categories. The amount changes every month based on our available funds. I like to think of this as the "marriage saver" category. We can save/spend that money however we want and the other spouse can't whine about it. This is where I save up for gun purchases or any other cool toys I want. Cool stuff that she and I both want or are otherwise for the whole family come out of the "big ticket items" category.
** Target Uncategorized: When you shop at a big box store like Target or Walmart and if you don't parse the receipt to break up the total into the several budget categories, then you really have no idea what you spent that money on. So this category is for stuff like that, and I HATE when stuff ends up here. We have an envelope in the "misc drawer" in our kitchen where we stick receipts from stores like that, and then I go through them once or twice a month when I'm balancing the budget. I just break out a calculator and add up all the line items from the receipt that belong in the same category. Then I go to that transaction line in the account register and in the budget category drop-down box I hit the "Split - Multiple Categories" button. Then just add whatever categories you need and the respective amounts, and it keeps track of how much from that transaction you have left to account for. So the only time that stuff ends up in the Target Uncategorized category is when we lost the receipt.
I'm just showing you what works for me, so far, subject to change. It's not "the" way to do it, but hopefully this gives you some ideas on how to organize your own budget.
I showed you what I do to handle gun/toy purchases, but to address the broader concern you expressed, you have to fit everything in to some category somehow. So your categories may need to be broad in scope sometimes. I think you can see that in my list above: some are very specific and some are pretty open-ended. And it's never perfect. Sometimes something you buy doesn't really fit anywhere. So you either say F it and stick it somewhere, or you re-organize your categories slightly. No harm no foul.
If you look at your bank account balance to determine if you can afford something, you will think you have Tons O Cash!! The problem is all of those dollars already have jobs: some is your next month's mortgage payment, some is for that car repair you need to make, some is for your car insurance bill which is about to hit in two months. You keep track of what dollar has what job in your YNAB budget; if you try to do that in your head, you're going to forget something and prematurely spend money that you really need for something else. So you have to break yourself of the habit of looking at your bank account and trying to remember what else needs to come out of that money. Account balances are useless now, YNAB Category Balances are all you should be caring about.
Yes you can just keep rolling money forward in the To Be Budgeted pool, but that's not using the tool to it's fullest. Don't worry about assigning it somewhere and then changing your mind later. If you assign money to a category and later on it turns out you need to spend that on a different category, it's a piece of cake: just click on the green bubble in the Available column that you want to move money from. A little box will pop up asking you how much money you want to move, and to what category. Problem solved, problem staying solved, Rangers lead the way.
Thank you, very helpful. I almost got there by myself, but your advice really helped. I know that YNAB suggests getting rid of extra savings accounts, but I find that if all the money is available, then all the money gets spent. Also, I'm the primary budget-er, so while I generally know how much money is where, no one else really bothers to look at what's available before spending. The two major things I need to do is finish linking ALL of our credit cards first. Second I need to link a budget to each of the individual savings accounts so when I'm moving money around, it's being correctly attached to the corresponding goals. Lastly, I'm importing money from my business whenever I pay myself. I think the easiest way to address that is just to count that money as income. Having the business accounts does add a layer of complexity, but I'm sure I'll figure out what works best.
You're welcome, glad I was able to help.
You can always add the business accounts as "tracking-only" accounts, so that when you transfer money from it to your bank account, it will treat it as income.
Regarding "nobody else bothers to look what's available before spending" that's a battle I still have to fight with my wife. I installed the YNAB app on her phone and showed her how to use it to check the category balances. She's getting a lot better about checking it before buying something but still isn't that onboard with entering her transactions.
If you decide to stick with YNAB I think you may eventually find that the extra savings accounts are redundant but keeping them certainly won't hurt anything. It'll make it easy to double-check that your most important savings goals match between YNAB and reality.
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