Living off Inheritance

John CurryJohn Curry Posts: 6Member
edited September 2010 in Desktop
Hi everyone,

I'm just starting out in the financial services industry. My Income is variable, and so far its nothing, but that should be changing within the next couple months. Luckily, I have around $9,000 to live off while I get my business up and running. my expenses are around $1,000 a month, (yikes). so I am using YNAB and my available income to budget is around $8,000. where should I put that $8,000 while I'm living off it but I'm only pulling it out every month to pretend its income? Eventually the income I make off my career will replace it, but for now its my emergency fund and I'm actually using my emergency fund at the moment. any tips?
Post edited by Unknown User on

Comments

  • lindylindy Posts: 102Member
    Hi John,

    Is the $1000 that you subtracted from the $9000 targeted for September's expenses? If so, you could enter $1000 now (in August) in the category "Available next month" (meaning it will be available in September). Then, you could enter the remaining $8000 with the date of September 1 in the category "Available next month" (meaning it will be available in October). That way, you don't have to budget the remaining $8000 at all, since it won't show up as available for budgeting until October.

    You would distribute September's $1000 in the appropriate categories of your expenses and enter your transactions as you spend the money.

    In October, you'll have $8000 available to budget. At that time, you would budget the whole $8000 - $1000 as you did for September and the remaining $7000 to your Emergency Fund category (or Savings or Buffer, whatever you want to call it).

    For November, if your business isn't bringing money in yet, you can do a negative entry for $1000 to your Emergency Fund category, which will make $1000 available for budgeting for November, leaving the remaining $6000 in your Emergency Fund, and so on. This way all the money that you don't need for the current month remains in your Emergency Fund.

    When your business starts bringing in money, you'll be able to gradually or quickly (depending on the business's earnings) stop using money from your Emergency Fund. Eventually you'll be entering your business income as "Available next month" and you'll be living on last's month's income (Rule 4).

    Does that make sense? I'll be interested to see what others suggest.
  • John CurryJohn Curry Posts: 6Member
    Thank you! that advice was great! i've got it all set up now. YNAB rocks! haha
  • lindylindy Posts: 102Member
    Thanks, I'm really happy to hear that. It's great that you're up and running! YNAB definitely rocks!
  • brown685brown685 Posts: 541Member, Beta Tester
    Sometimes I wish there was an option to say this money is available in 2 months, 3 months, 4 months, 5 months, etc.

    Then I realize that it makes thing complicated.

    This is one of the examples where being able to split income as being available in different months would be useful.

    James
  • PatzerPatzer Posts: 3,794Member, Beta Tester
    brown685 wrote:
    Sometimes I wish there was an option to say this money is available in 2 months, 3 months, 4 months, 5 months, etc.

    Then I realize that it makes thing complicated.

    This is one of the examples where being able to split income as being available in different months would be useful.

    Workaround: Categorize your Big Pile of Money ("BPOM") to some specific category like "Held for Future".

    Create a transaction for the first of each month with a net of zero:
    $XXX outflow, category Held for Future
    $XXX inflow, category Income Available this Month
    $0.00 total

    Depending on how you want to manage things, you could enter a bunch of future dated transactions in the register, or you could put this in as a scheduled transaction and just let it launch automatically each month.

    Then you train yourself to never touch the funds in the Held for Future category, just the funds that you have released on schedule and budgeted. You'll see a monthly expense in the Held for Future category, which represents how fast you're releasing and budgeting the BPOM.

    Patzer
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