In DA, we live in today. Truly, that is all we have. Yet, living in the next month, or what YNAB calls “the buffer” has been life-changing for me.
Imagine not having to dig through the sofa for change so you can buy food the day before your next paycheck arrives! Imagine that you have all the money for the month on the 1st, instead of having it look great on paper, but not in real cash flow.
Well, you can! This concept works for people who receive a regular paycheck as well as for those who are paid sporadically.
It may be very challenging to do when you first start DA, but can be done over time and is well worth your effort.
Here is the concept: Whatever money you earn in one month gets spent in the next month. (Here is YNAB’s explanation).
This way, you never have to worry mid-month that you have money on paper, but not enough for groceries today because you don’t get that next paycheck until tomorrow.
For example, if you are paid on the 1st and 15th of the month and this month is September, when you get your paychecks, you enter them into your spending plan as income for October.
This is especially excellent for freelancers who are not paid on a regular basis.
Unfortunately, the catch is that you have to accumulate enough money, either from savings, a windfall, or in a category, to get through a full month without spending your pay.
Recently, a fellow member was able to do this because she created her spending plan on the 10th of the month and gets paid on the 15th and last day of the month. It was easy to do this with the paycheck arriving on the last day of the month as that money would not really have been available within the current month anyway! And she was lucky to have started with an accumulation of money so she was able to allocate the paycheck she received on the 15th of the month to the next month as well. It was tight for those few weeks, but it worked for her.
If you cannot do this all at once, then just create a category called “Buffer” and put what you can into it. Eventually, you will accumulate the funds to do this. And then, you’re no longer planning spending for money you don’t have on the 1st of the Month!
For me, it’s completely changed my ability to live peacefully one day at a time with my spending plan. Let me know what you think.