Timing your bills and all of your expenses throughout the month can be stressful, especially if you’re getting paid multiple times a month. It’s tough to make sure that you have all of the money you need for each pay period to make it to the next one. 

Or if you’re riding the credit card float by putting everything on your credit card and then paying for this month’s expenses with next month’s income, you’re just waiting for the month where things don’t work out perfectly and you start carrying debt. 

The paycheck dance gets old. Fast. 

However, if having to time all of your bills and saving a part of your paycheck just to pay for rent is stressful, then having a YNAB buffer is calming and empowering. 

With the buffer, you’re paying for this month’s expenses with last month’s paycheck. That’s the direct opposite of riding the credit card float. 

With the buffer, you don’t have to worry about timing or just hoping you’ll have enough to make it to your next paycheck. You know that you’ve got plenty. You can back up and take a look at the big picture-the total that you’re spending for everything for the full month. 

How YNAB’s income works a little differently

YNAB is a little different from other budgeting programs. The change is subtle but really important.

With most programs, you input your expected income for the month just like you put your expected expenses. As long as you earned enough for the month and you kept your expenses within your budget, you’re good. 

Except for the fact that this completely ignores the bill song and dance that you have to do with your money each month, where you’re having to set aside money for your rent ahead of time, or having to make sure you know which bills get paid with which paycheck. 

YNAB is a little different. There is no expected income to input up at the top of your budget. Only your Ready to Assign. This number is the amount of money that you’ve already earned. As you get paid, that money goes up to your Ready to Assign waiting for its job. 

So then you only budget using the money you’ve already earned. 

While some may not appreciate that they can’t just budget for all expenses for the whole month, the beauty of this method is that you’ll always know where each individual dollar needs to go right now before that next paycheck. 

If you know that your next paycheck won’t be enough to cover the rent that’s coming up, you’ll know you need to set some more aside now.

But what if you don’t want to do the bill song and dance? What if you want to budget for the whole month and you don’t want to worry about the timing of bills?

That’s where your buffer comes in, and it’s a game changer.

 Getting a month ahead with YNAB

Here’s the goal for your buffer. It’s to take the money you earned last month and use it to pay this month’s expenses. 

Wait…huh?

It can be a weird concept to wrap your head around. But the goal with your buffer is that you have enough money that you don’t have to worry about living paycheck to paycheck. That you’ve got more money on hand than you actually need. Creating it won’t be easy, but it’ll be a sinch if you already have a current buffer or an emergency fund saved. 

Saying you’re going to budget the money you have today for next month may sound confusing but it doesn’t have to be. 

Here’s a good way to think about it.

Maybe like us, you don’t get paid once a month. We get paid two times. And if you’re timing your bills, it’s really annoying. 

But what if you were only paid once per month? And that paycheck happened right on the 1st. It’s easy to imagine budgeting your whole paycheck for the month on the 1st. 

But what if you were paid on the last day of each month? Would you use that money to pay for the month that just happened? No, that would set you up to be perpetually behind. It’s also easy to imagine that if you’re paid on the last day of each month, that money is naturally going to be used to budget for the whole upcoming month.

Let’s take it one step further. What if you were paid once on the 20th of each month, yet you knew that you had enough money on hand before your paycheck to make it to the upcoming month? You could then use that new paycheck to budget for the next whole month without touching that money you have on hand. 

That way, when the month switches over, you have all of that money waiting to be spent according to the way you budgeted back on the previous 20th. 

That’s the way the YNAB buffer works. 

So the goal is to reach the point where you can always take the money you earn this month and budget it for the following month. When you do that, you’re always ahead. You’ve got a buffer.

There’s less stress, you can put everything on autopilot and not have to worry about timing. And in general, you spend less time each month having to budget.

It’s just a great way to manage your finances

Whether you use YNAB’s way of only assigning the dollars you have today or simply building in a buffer of money so that you aren’t getting so close to the financial edge, building a buffer is just a good way to live. 

But it can be hard to get there. 

If you have money saved or an emergency fund, create a buffer today. 

If you need to set up a savings goal instead and slowly build up to a full buffer, I can tell you that it’s completely worth doing.