I’ve been enjoying your videos! As far as overspending, I’ve always told myself that I have to cover overspending with current money, because if I think that I can “just cover the spending with my next paycheck”, I know I’ll overspend too much. Having to use current money really reduces my spending and makes me rethink my choices. Thanks for sharing your journey!
Thank you! And thank you for your thoughts on overspending. I definitely need to be paying more attention to my available amounts prior to making purchases!
Love the progress you are making! You are absolutely right about covering overspending with current available money and then replenishing the drained funds also being a form of borrowing from the future. It’s tricky and definitely what is a reasonable approach depends on your income. At lower incomes with less wiggle room, you may have to borrow from the future and doing so while not getting in debt is the win in it of itself. With higher incomes, borrowing from the future in this way often becomes a slippery slope of reckless overspending. I definitely saw myself going down that path which is why I follow an allowance approach. Every month I give myself a certain amount of spending money and use only that amount to cover “overspending” which is really just moving money around to make up for the fact that I didn’t accurately predict where I would spend my money so my initial allocations were off. I never want to get in a position where I spend more than my monthly allowance unless that’s due to rollover from past months. I think there’s a difference between overspending that’s actually spending more overall than you can afford (based on whatever your goals are) and overspending that’s spending more in a category than what you had planned that is made up by spending less in a category than what you had plan. The latter case is great for rolling with the punches.
Thank you for your thoughts! I know my overspending is definitely due to spending more than I can afford on non-essential categories. That’s something I’m trying to be more careful about so that I can get off the credit card float once and for all!
Covering overspending with current money allows you to clearly see the trade offs you’re making as you make them. Using sinking funds or ready to assign will extend your time on the credit card float, but using sinking funds illustrates which future expenses you’re putting at risk. Sinnamonstory’s allowance approach is preferable as long as you have enough allowance in the plan. In the end, it’s your budget and you get to choose the approach that works best for you. So many options to help you make the changes you want to make so your money can do all that you need it to do. Great progress!
I saw that Reddit post as well. I agree with you that rolling with the punches and covering from other categories that will then need to be replenished is essentially the same thing 🙂
I think you feel the pain more when you cover overspending as it happens, because you've made progress putting money towards different goals and using that money to cover overspending is frustrating. Also, if you were budgeting with physical cash/envelopes you would be forced to take from another envelop to spend the money. That being said, totally guilty of waiting for my next paycheck to cover overspending (and it also make for a more interesting video to see what people are willing to overspend on haha). Really great job on not overspending - it's a HUGE accomplishment when that is what you are used to doing! :)
I agree with you on overspending too. I have a fairly decent income but my expenses are ridiculously high. When it comes to covering my overspending.. at the start of the month I have a lot more wiggle room than closer to the end. I have for sure used future money to cover some and “floated” some on credit cards. The only drawback with that is at some point things could spiral out of control (speaking from experience). Great video!
I get paid monthly as I’m in the UK so I do roll with the punches for my overspending during the month. Sometimes I’ll spend more in eating out than in social but I look at that as discretionary spending so I don’t mind rolling with the punches with discretionary spending but I don’t top the money from the categories I’ve WAM’d from when I get paid as I reset those categories. I have toyed with the idea of just having 1 holding category for discretionary spending and then covering the spending from that category
Covering overspending with ready to asssign? Guilty🙊! I also read that post. I mean, its my money so im ok with the decisions I make. I guess because i tend to look at the overall picture. My overall savings rate is 30% or more. Whether i take money from ready to assign or other categories that are in a surplus to cover categories that are in a deficit is the same to me.
9:07 whoop whoop look at you budgeting into March. That’s awesome
Thank you! 😊
I’ve been enjoying your videos! As far as overspending, I’ve always told myself that I have to cover overspending with current money, because if I think that I can “just cover the spending with my next paycheck”, I know I’ll overspend too much. Having to use current money really reduces my spending and makes me rethink my choices. Thanks for sharing your journey!
Thank you! And thank you for your thoughts on overspending. I definitely need to be paying more attention to my available amounts prior to making purchases!
I tend to cover overspending with other categories unless it’s payday and I have new money in ready to assign. Great video!
That’s a good way to do it!
Love the progress you are making! You are absolutely right about covering overspending with current available money and then replenishing the drained funds also being a form of borrowing from the future. It’s tricky and definitely what is a reasonable approach depends on your income. At lower incomes with less wiggle room, you may have to borrow from the future and doing so while not getting in debt is the win in it of itself. With higher incomes, borrowing from the future in this way often becomes a slippery slope of reckless overspending.
I definitely saw myself going down that path which is why I follow an allowance approach. Every month I give myself a certain amount of spending money and use only that amount to cover “overspending” which is really just moving money around to make up for the fact that I didn’t accurately predict where I would spend my money so my initial allocations were off. I never want to get in a position where I spend more than my monthly allowance unless that’s due to rollover from past months.
I think there’s a difference between overspending that’s actually spending more overall than you can afford (based on whatever your goals are) and overspending that’s spending more in a category than what you had planned that is made up by spending less in a category than what you had plan. The latter case is great for rolling with the punches.
Thank you for your thoughts! I know my overspending is definitely due to spending more than I can afford on non-essential categories. That’s something I’m trying to be more careful about so that I can get off the credit card float once and for all!
Covering overspending with current money allows you to clearly see the trade offs you’re making as you make them. Using sinking funds or ready to assign will extend your time on the credit card float, but using sinking funds illustrates which future expenses you’re putting at risk. Sinnamonstory’s allowance approach is preferable as long as you have enough allowance in the plan. In the end, it’s your budget and you get to choose the approach that works best for you. So many options to help you make the changes you want to make so your money can do all that you need it to do. Great progress!
Thank you for your thoughts! I definitely see the pros of covering overspending with current money. I will be working towards this 🙏🏻
I saw that Reddit post as well. I agree with you that rolling with the punches and covering from other categories that will then need to be replenished is essentially the same thing 🙂
The post definitely made me stop and think for a moment. Personally, I love seeing how every YNABer does their budget differently!
I think you feel the pain more when you cover overspending as it happens, because you've made progress putting money towards different goals and using that money to cover overspending is frustrating. Also, if you were budgeting with physical cash/envelopes you would be forced to take from another envelop to spend the money. That being said, totally guilty of waiting for my next paycheck to cover overspending (and it also make for a more interesting video to see what people are willing to overspend on haha). Really great job on not overspending - it's a HUGE accomplishment when that is what you are used to doing! :)
I agree! Thank you for your thoughts 😊
I agree with you on overspending too. I have a fairly decent income but my expenses are ridiculously high. When it comes to covering my overspending.. at the start of the month I have a lot more wiggle room than closer to the end. I have for sure used future money to cover some and “floated” some on credit cards. The only drawback with that is at some point things could spiral out of control (speaking from experience).
Great video!
Thank you! Yes, I totally feel you with the high expenses 😩
Look at you 👏 09:01 going into March 😊
Thank you 🙏🏻 I am very happy and looking forward to a brighter financial future!
I do a mix of both to be honest. You know your budget best! What works for you, works for you!
Love this approach!
I get paid monthly as I’m in the UK so I do roll with the punches for my overspending during the month. Sometimes I’ll spend more in eating out than in social but I look at that as discretionary spending so I don’t mind rolling with the punches with discretionary spending but I don’t top the money from the categories I’ve WAM’d from when I get paid as I reset those categories. I have toyed with the idea of just having 1 holding category for discretionary spending and then covering the spending from that category
That makes sense!
Covering overspending with ready to asssign? Guilty🙊! I also read that post. I mean, its my money so im ok with the decisions I make. I guess because i tend to look at the overall picture. My overall savings rate is 30% or more. Whether i take money from ready to assign or other categories that are in a surplus to cover categories that are in a deficit is the same to me.
I agree! Though YNAB has its core beliefs/rules, I think as long as the program is working for someone, it’s up to them how they use it!
do you have the link to that reddit post?
I don’t, sorry! I’m having trouble finding it again on reddit 😩