Gaming My Impulse Spending

A number of my budget categories in YNAB reflect variable spending. These are things like groceries, gas, household items, personal care, and dining out. These categories also reflect areas where, if not careful, my spending can run amok pretty easily.

To combat this (and to make budgeting easier), I’ve set “Needed for Spending” goals on each of my variable spending categories. YNAB categories are essentially virtual cash envelopes, so the beginning of the month, I start with a capped amount available to be spent. Unlike cash envelopes, however, once the money runs out of a category, I’m not out of money entirely. YNAB still encourages me to “roll with the punches” by moving money from other categories.

Most months, I’m pretty good at staying under the amounts I’ve set. However, some months, I find myself more inclined to fall into a shopping binge and do need to pull from other categories.

In general, I try to limit myself to only pulling from other variable spending categories. I’m okay with pulling some money from my personal care category to cover an impulse bottle of wine on a Friday night. I’m less okay with pulling money from car maintenance to cover one.

How YNAB’s need for spending goals work tends to raise a number of questions and concerns for users because they don’t always work like other goal types. In my opinion, YNAB’s thought process is right though.

In short, when you budget into future months, unlike other goal types, YNAB expects you to budget the full goal amount regardless of how much you have available in the current month. The amount you need to budget doesn’t get reduced. This is because YNAB can’t know whether or not you’ll spend what’s currently available before the month ends. For instance if you have $75 to spend on dining out towards the end of the month, there’s still a possibility you may still spend that money before the month ends. Budgeting $75 less could leave you shorthanded in the next month if you spend that $75 between now and the beginning of the next month.

Some people combat this rollover problem by putting all of next month’s funds into a “next month” category and waiting until the first of the month to budget. I, on the other hand, still prefer to budget as a get paid because, quite frankly, I find “YNABing” fun. The more budgeting I get to do, the better.

In my case, when the first of the month rolls around and my available amounts from the previous month roll over, my categories are usually overfunded, which is actually a pretty good problem to have. I treat the money from any overfunded categories as a sort of mini-payday that I can then rebudget into the future. With my spending being lower due to the pandemic, that mini-payday typically amounts to around $200-$400, which is a pretty sizeable chunk of change.

I find getting my mini payday at the start of the month good enough on its own, but as an added incentive to curtail my impulse spending throughout the month, I go one step further. I set aside 10% of that mini-payday for items in my wish farm. Because of this, throughout the month, I’m constantly thinking, the less I spend on eating out or impulse buys, the sooner I get to buy something on my wishlist.

Overall, it’s only a couple hundred dollars a month, and in reality, it’s not new money. Mentally, though, my mini-payday at the start of each month has really helped reframe whether Chick-Fil-A breakfast for the third day in a row is actually worth more than buying myself a new Mac. (I decided it wasn’t.)

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