![]() ![]() Remember, the way to eat an elephant is by taking one bite at a time. It’s better to under-promise and over-deliver than to have to backtrack on progress you thought you had made. Don’t put yourself in a position of having to take money back out of your Debt Reduction category once you’ve budgeted to it. However, the key here is to avoid making promises to yourself you can’t keep. The only way to do that is to trim back on expenses. Remember, you’re trying to get out of debt (get off the float). If possible, right from the start, allocate anything you can spare to your new Debt Reduction category. Now you pick up and proceed with the normal flow of the budgeting process in YNAB. ![]() The Float Loan to Self methodology, for both YNAB versions, is of my own devising it’s a method I developed and use to better serve my clients. The YNAB developers have provided their own resources explaining the YNAB methodology and the software. I’ve classified this as an “Intermediate” level tutorial because it might be difficult to follow if you’re not already somewhat familiar with the YNAB software and the budgeting concepts behind it. Second: This tutorial focuses only on how to set up a FLTS, not how to use YNAB in general. Skip to the end of this tutorial for instructions on how to integrate your existing data into the FLTS method. However, if you are deeply invested in your existing data, you can introduce a FLTS without starting fresh but it requires extra steps and can prove to be messy. That will be the quickest, easiest, and cleanest way to get started and move forward. Float Loan to Self Tutorial for nYNAB Usersįirst: I recommend beginning with a fresh, clean budget. If this tutorial is helpful, a kind word in the comments would not go amiss. This tutorial is for users of the new You Need A Budget (YNAB) web-based subscription software (sometimes referred to as nYNAB). The following tutorial details exactly how to set up your accounts and the steps to follow each month until you get off the float. The next step is to get off the credit card float. What could possibly go wrong? After:Īck! I’m borrowing against my next paycheck to pay for current expenses.Īwareness, my friends, is half the battle. Plus, keeping an eye on the Credit Card Payment category can help you ensure you’re on track for your next payment - whether that’s paying off in full, a minimum payment, or somewhere in between.I pay my credit card(s) in full every month and never incur interest charges or fees. Hiding the category doesn’t stop it from behaving in the way described here, so keeping it visible will allow you to stay in control. It’s really important to keep the Credit Card Payment category visible in your budget, rather than hidden. Your money sits in your Credit Card Payment category, twiddling its thumbs until you make your payment.ĭid You Hide Your Credit Card Payment Category?.YNAB automatically moves the money to cover the gum purchase from your Groceries spending category to the Credit Card Payment category.When you use your credit card to buy gum, enter an outflow transaction in your credit card account register.Budget for your gum (using money you already have!) by assigning money to your Groceries category.When you add a credit card account to YNAB, a corresponding Credit Card Payment Category is automatically created.The important thing is that you reserve the money to pay off that debt, and that is what your YNAB budget is designed to do. Here's how to get it done, using that gum (yes, silly) as an example: Did you buy that shirt or a $0.35 pack of gum? Debt. When you spend money on a credit card, you create a little bit of debt. That has nothing to do with payment method, but it's your rock, your anchor. Is there enough money in your clothing category for the shirt you want? Great. In your YNAB budget, you'll make spending decisions based on your categories. ![]() The most important thing about using credit cards in your budget has nothing to do with credit cards.
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