In what month budget a rent payment if I pay it in the end of the previous month?

glebgleb Posts: 9Member
Hi there! Please help me find a solution. I have the situation that a rent payment must be done on 27-th of each month. This money come for the next month's rent. 
E.g. in October 27 I payed $600 as a rent for November. Nov.27 I should pay for december and so on.
I cant' guess in what month I have to budget this money - as an October's expenses, or as November's? 
I can pay on Nov.27, but enter this transaction as it would be done at Dec.1st. Is this rigth way?

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Comments

  • Budget_NinjaBudget_Ninja Posts: 4,670Member, Beta Tester
    edited November 2013
    This is a common question, so I think I know where your coming from.  An analogy that might help?

    Would you consider fudging the grocery bill for a shopping trip near the end of the month?  You will probably be consuming the groceries next month.  What about filling your gas tank on the 28th?  When you get use out of the expense doesn't really matter.  You have to pay it on X date, so you need the money available by that date.

    ETA: Plane tickets for your vacation in 3 months?  Christmas gifts you bought today? ect..
    Post edited by Budget_Ninja on
    WordTenorwooly_mammoth
  • derekmalloryderekmallory Posts: 407Member
    gleb said:
    Hi there! Please help me find a solution. I have the situation that a rent payment must be done on 27-th of each month. This money come for the next month's rent. 
    E.g. in October 27 I payed $600 as a rent for November. Nov.27 I should pay for december and so on.
    I cant' guess in what month I have to budget this money - as an October's expenses, or as November's? 
    I can pay on Nov.27, but enter this transaction as it would be done at Dec.1st. Is this rigth way?

    @gleb I just change the date so the reports are as intended.  3 days here or there doesn't matter, especially for a stagnant expense such as rent.  I don't really equate a monthly rent payment to vacations and groceries for all the reasons @budget_ninja mentioned, so hence I think there is more flexibility available with fixed expenses and how we record them.

    If you have worry that your rent payment won't clear (EVER!!!!  THIS IS IMPORTANT!!!!), I would agree with @budget_ninja said you should not revise it.  But if it's just another payment in your sea of payments and it doesn't matter what day it comes out... then it truly doesn't matter and there's probably more value in having accurate reports.  After all, when do they cash the check?  Probably not in November.

    Good luck!
  • wedjan245wedjan245 Posts: 1,046Member
    Off topic, how did the OP post and have the post count as 0?
  • pebblepebble Posts: 1,546Member, Beta Tester
    @wedjan245 Oh that's weird....invisible YNAB user, maybe? But that's ok, just proves that YNAB can work for anyone!
  • elflockelflock Posts: 3,368Member
    Maybe the first post is free!
    jessiebird
  • Bstar0306Bstar0306 Posts: 547Member
    We have this issue. We are paid biweekly so we get paid anywhere between the 20th and the 1st of the next month and that check goes to rent (since we aren't buffered). The first few times I fudged all the dates to October 1..or whatever month. But now I'm just expensing the rent in that month. It can mess up reports and some months we'll probably end up with 2 rents but it's a lot easier than fudging dates. When I was fudging dates it messed up the bank reconciliation. 

    As a new user though we aren't even using reports. I need to find a video/tutorial on the reports because they don't make any sense to me! LOL
  • elflockelflock Posts: 3,368Member
    @blackdiamond
    Amen on all of us abstaining from being tools.
    jessiebirdwooly_mammothBozeman42eccsolutions
  • Bstar0306Bstar0306 Posts: 547Member
    HAHA yeah right now I'm just working on paying all of our bills on time! Which amazingly YNAB has allowed us to figure out how to do!
  • glebgleb Posts: 9Member
    Thanks to everybody! I'm very glad to your answers! I also guessed that fudging dates was a bad idea. It's better to agree with the owner to pay the 1st of a month. But it'll be hard to do.
  • pebblepebble Posts: 1,546Member, Beta Tester
    @gleb - or just pay it on the 27th and enter it as paid on the 27th. Easiest option of all, with no fudging required!
    JoelErinL79
  • glebgleb Posts: 9Member
    @pebble - the rent is a pretty big part of my monthly expenses and now it comes into red zone (overbudgeted). Hard to complete rule 4 when paycheck and expense are in the same month. Yes, now I pay and enter the transaction in the same date, but my budget for the next month is always red. 
  • elflockelflock Posts: 3,368Member
    @gleb Are you budgeting money you don't yet have? That can cause trouble.
  • pebblepebble Posts: 1,546Member, Beta Tester
    @gleb, I'm not quite sure I understand you - do you mean you are paying the rent with money you don't have (ie using a credit card or overdraft?)  Or is it that you are budgeting the money for the rent in December even though you are paying it in November?  

    I don't think you are gaining anything by trying to live by rule 4 if that means you have a big red overbudget number. Perhaps I'm wrong, but if it was me, I'd stop worrying about the buffer until you can cover all the bills that are due right now  - and that's exactly what I have done in my own budget.  Money comes in this month and much of it (though not all!) goes out this month and I'm OK with that.  I do hope to have a one month buffer one day, but I'm a long way from there.
  • RodeoClownRodeoClown Posts: 4,165Member, Moderator, Administrator, YNAB Team, Beta Tester, Beta Moderator
    wedjan245 said:
    Off topic, how did the OP post and have the post count as 0?
    The first comment in a thread is considered a post, everything afterwards is considered a comment on that post. The number is a comment count, not a post count...
  • AFK_MatrixAFK_Matrix Posts: 386Member
    wedjan245 said:
    Off topic, how did the OP post and have the post count as 0?
    The first comment in a thread is considered a post, everything afterwards is considered a comment on that post. The number is a comment count, not a post count...
    Except it says posts...  Err go why people are asking, it also confused me to seeing the 0 there. 
  • glebgleb Posts: 9Member
    @elflock - yes, I budget money that I dont have at the moment, cause I want to see how much I need in the next month. 
    @ pebble - 
    Money comes in this month and much of it (though not all!) goes out this month and I'm OK with that.  I do hope to have a one month buffer one day, but I'm a long way from there.
    Exactly the same =)
    The question is solved, thanks to everybody!
  • derekmalloryderekmallory Posts: 407Member
    It doesn't matter if you pay rent twice in one month IF that is when you have the money available and budgeted to do so. There isn't anything magical about being able to have perfect reports. They are a tool, never let them turn you into the tool ;-)
    For those w/o a buffer, I agree entirely.

    But for those with a buffer... that's why this software is so nice in that you can have the best of both worlds with minor insignificant modifications.  Personally, I think it's silly to have two monthly rent payments in one month's time frame.  How can one effectively see their spending trends if they have to account for silly anomalies like whatever day the check is cashed?  It just makes the higher level analysis more confusing.

    Again, for those on the month-to-month grind, I get the point... budget what you have, you spent it when you spent it, black/white approach to everything.  I'm saying there is grey area for those that are already comfortable and responsible with how they use it so as to achieve a discernible benefit.
    arthaey
  • derekmalloryderekmallory Posts: 407Member
    gleb said:
    Thanks to everybody! I'm very glad to your answers! I also guessed that fudging dates was a bad idea. It's better to agree with the owner to pay the 1st of a month. But it'll be hard to do.
    @gleb
    Is there a grace period for a couple days after the 27th, so the charge can occur in the most appropriate month?
  • KaydeeKaydee Posts: 2,447Member
    Since it's going to be paid in the prior month every time it makes sense to have one month showing two payments and then record it in the month it's paid in from now on. It's a one time anomaly to have the budget reflecting reality in the future. 
    Joel
  • derekmalloryderekmallory Posts: 407Member
    Kaydee said:
    Since it's going to be paid in the prior month every time it makes sense to have one month showing two payments and then record it in the month it's paid in from now on. It's a one time anomaly to have the budget reflecting reality in the future. 
    @kaydee.

    Actually, it's a two-time anomaly.  It's incorrect the first month and it's also going to be incorrect the last month.  I understand the black & white rigidity regarding following all the rules but some may find more value in accuracy of trend analysis.  Lots of ways to skin a cat.
  • derekmalloryderekmallory Posts: 407Member
    I think there is a common sense factor that needs to be applied.  Soooo rigid.
  • derekmalloryderekmallory Posts: 407Member
    Again, w/o buffer - be rigid.

    W/ buffer - feel free to try and accurately assess one month's expenses so you can evaluate it at a higher level.
  • derekmalloryderekmallory Posts: 407Member
    Looking at this from the other direction... I am moving at the end of this month and have a "free" month of rent.  In reality, that just makes the other 11 payments 1/12 cheaper.

    Should I not budget for rent in black and white/matter of fact manner and pretend like it's a cost savings?  Or... should I do the more common sense approach and divide the total value of the lease by 12?  I've chosen the latter approach.  There will be a positive balance in the rent category until January of 2015 when it will reach zero.
  • sunfastrosesunfastrose Posts: 95Member
    Your budget should reflect reality.  If you are committing money between the 1st and the end of the month, budget the money in that month.  With buffer or without.   Committing = writing check, putting on credit card, giving cash, whatever method you pay with. 
    ishtarRodeoClown
  • derekmalloryderekmallory Posts: 407Member
    Your budget should reflect reality.  If you are committing money between the 1st and the end of the month, budget the money in that month.  With buffer or without.   Committing = writing check, putting on credit card, giving cash, whatever method you pay with. 
    And the reality is, nobody pays rent twice in one month.  Good comment @sunfatrose
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