How to Handle Fluctuating Expenses in YNAB

Wouldn't it be easier if a month or water or electricity cost the same amount every month? We all have a list of expenses that vary from month to month or season to season, and it's hard to know how we're supposed to budget for an expense we don't yet know the cost of. Though there's no perfect method or magic solution, Hannah walks you through some strategies for learning how to best handle your fluctuating expenses in YNAB!
TIMESTAMPS:
0:00 Intro
0:57 Step 1: Collect past payment info
1:48 Step 2: Copy payment history into your budget notes
2:00 (A brief lesson on the "fresh start")
2:41 Step 3: Budget for expense at its highest
4:11 Step 4: Reflect and adjust
4:21 If you have leftover dollars...
5:57 If you overspent the budgeted amount...
7:09 Step 5: Continue budgeting the expense at its highest
7:54 Bonus tip: How I set seasonal goals!
8:42 How to use reports to analyze variable expenses
10:17 Outro
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[@aint2proud2meg]

I love YNAB so not a complaint, more of a suggestion- but I would love if the monthly average spent (or monthly average budgeted) could also be a goal type. That way it would be dynamic and match actual spending.

[@PatrikKron]

That’s a great idéa!

[@JaymeOrr]

Yesssss

[@leahkornpalmer9574]

I added up the total of a year's worth of each utility bill. I set a Spending Goal by Date (December 31st), repeating yearly, for that amount ($504). That way, I put the same amount in every month ($42), but on months when the bill is lower, the leftover amount stays in the category for when the bill gets higher.

[@VioletEmerald]

I love this! Makes a lot of sense.

[@van_full_of_richards]

This is sort of how we do it too and now we're never caught off guard.

[@mpa3987]

Besides being so clearly informative you are delightful to watch. YNAB - don’t lose Hannah.

[@Mustela8098]

I total all last year bills, divided by 10 months to adjust for rate changes or extra consumption and round to the nearest 5. That is my year goal and every month will be the same amount every month. At end of the year I take what is left and either roll to next year or move another category.

[@FawnFritzen]

Oooh, yes! That makes so much sense to me! I know my average per month, but couldn't figure out how to add that amount as a goal EVERY month. This is the perfect idea, thank you!

[@TheCainClan]

I would also suggest asking the utility company if they offer a budget plan for your bill. Then your payment will remain the same for 6 or 12 months.

[@jonathanguthridge1768]

That’s what I was going to suggest. My gas bill is $61.00/month this year and they reevaluate this amount every year based on the previous year’s usage.

[@linnakat6848]

My utility company offers that as well - and they tell you how much it would be in your account online. I check that amount every so often and that's how much I budget. So I fund my own levelized billing. :)

[@delfordchaffin5617]

That was my first thought. My gas and electric are like this. I wonder if some places don't offer this?

[@YNABofficial]

Well that sounds really handy! I'm in Kansas, United States and we don't seem to operate that way here. Though it looks like it works this way in other areas of the US! I'll just hafta call and find out! -Hannah 😊

[@YNABofficial]

I haven't heard of it for my area, but I also haven't asked! I'll have to call in and see! Definitely sounds handy. -Hannah 🌻

[@letstalkabouthomeschooling443]

I budget the same amount each month all year long. In summer, the bill is lower so the extra $$ stay in the bucket (earning interest) and in winter there is plenty of $$ to cover the higher bills.

[@bridgetbrady2640]

Isn’t that her step 3 tip?

[@sandrat6733]

I’m trying to budget the same amount every month, but with a slight twist - my winter gas bill (three months) has been over $700, while my summer one can be $125. So I put away $250 per month which covers the largest bill ever and then cap that category at $1000. Once money is taken out it is refilled to $1000. Should cover me for anything!

[@SmallSpoonBrigade]

@@sandrat6733 In a situation like that, you'd probably want to budget the most for a bit, then return to something closer to the average of the bills. That should get you most of the way there, if you're a bit over or under the actual cost, you can always adjust it, but you shouldn't ever be very far away from the actual value.

[@desireehallock7296]

I so needed this video! I have been kind of using this method already, but having it broken down was so helpful!

[@Musicman2012Now]

Hannah ROCKS! I never tire of her videos, and I always learn a lot. This one is a great example of parts of YNAB of which I did not know. (p.s. I also like her piggy bank!!!...I want one!!!)

[@sherrylynnbishop8007]

Banksy! I know, me too!!!!

[@KeithBarrowsToday]

I budget for my highest bill from the last 12 months and add 10% (then round up). Then, each month, I top it off. Once each year I add another 10% or so to take in inflation.

[@YNABofficial]

Sounds like you are ON it, Keith. Utilities aren't gonna catch YOU off guard. Do you often have extra left over to "cash out"? Or just let it roll over? -Hannah 🌻

[@KeithBarrowsToday]

@@YNABofficial - I try to let it roll over. Some months it becomes a source for rolling with punches. I never cash it out (if I understand you rightly). :)

[@conureron3792]

Love the Reports tips!

[@elaynejuten9084]

I have a shared account with my partner for rent, utilities, etc. I budget for the most expensive month and then any extra in the cheaper months goes to building a buffer for any new or unexpected expenses that might come out of our shared account (i.e. rent increase, vet bill, etc). Since the shared account is the non-flexible money it feels so nice to have saved up an extra month of rent (over the course of months) just in case.

[@clarekrmiller]

Those charts are why I don't do fresh starts even though you and Jesse recommend them. I don't want to lose (or more accurately, break up) all that history!

[@ladysoapmaker]

My gas and electric utilities have an option for what they call budget biking. Basically they average your bill over the year and bill you that average. It is only a year at a time so you have to renew. I've actually do this for my budgeting. It helps in the long run.

[@irlshrek]

these videos are awesome!

[@shannonburden9013]

I've always used the equal payment plan for my hydro bill (our home is heated by electric baseboards), but YNAB has given me the confidence to pay for usage. I now do my own equal payments (my monthly goal) and use the lower usage months to build up a buffer for the cold winter months.

[@YNABofficial]

I JUST learned this past week that my electricity and water providers both have this system, and I'm really thinking about switching to it! Why the heck not! -Hannah 🌻

[@Mushkiepotamus]

There is a way to make the utility bills the same amount each month- contact the utility companies and ask for the steady budget plan or whatever they call it. If you have had the utility for at least one year- all utilities will take the average of the 12 months - for steady monthly payments. It get re-adjusted each year.

[@YNABofficial]

I've heard quite a bit about this in the comments! I will have to look into this! I've never heard of it before! -Hannah 🌻

[@aubbityaub7787]

Would love a video, which you're probably working on, for the new feature "money moves"

[@YNABofficial]

Ohhhh, we gotcha! Keep an eye on our channel, BenM will help you learn ALL about Money Moves! -Hannah 😊

[@vincentapa1376]

Hey Hannah, I use a Target Balance Goal and then work down or up, so it always is right on or has a little extra. BTW, I named your hair style the "Half Leia"! 😉

[@mruppity64]

my solution is estimate for year / 12 = monthly goals, whatever the bill - I have fixed bills for most things apart from gas/electricity, and have 5 years worth of usage data to give me a good idea of my usage

[@caseyf6]

I really appreciate the captions, by the way. Great video and I really enjoy these videos!

[@YNABofficial]

Glad the captions are useful!! Thanks for watching :) -Hannah 🌻

[@erikgrabowski9993]

Most utilities will also have a "budget plan" that will stabilize the bill. They will take your yearly payment and divide it equally for your monthly bill. Then yearly they update your bill to cover any variances. Does everything above for you.

[@YNABofficial]

I'll have to look into this! I haven't heard about that service being offered in my area, but it's totally worth calling in and asking about. Thanks for the tip! -Hannah 🌻

[@MT-hk9cp]

Yep we have it in Chicago and its great!

[@valeriewoodard8501]

Could someone add close captioning to this video? Please and thank you.

[@tekFishy]

I have a spreadsheet with my historical payments using a max function to find my highest bill. I use this information to set a goal so that I always have enough for my highest historical bill in that category with a bit of margin and the next month budget what I spent last month. Might might not be the best way but find it works for me

[@scottkassan]

I take this one step further. I have 12 categories, one for each month. Each category has a by date goal that repeats annually with the highest amount that I've ever had to pay that month. This spreads all of the payments over 12 months, and automatically takes care of any leftover.

[@SmallSpoonBrigade]

Honestly, that's probably good enough. It's probably an overestimate, so at times you may find you have more than you need, but not every financial decision needs to be super complicated.

[@cristelmariebuenafe]

Done.

[@stanislavasrbova7017]

How do you set seasonal goals in YNAB? Like different amounts for summer/winter?

[@YNABofficial]

Yes! I just set the goal to a certain amount for the summer, then when cold months hit I manually edit the goal to a more appropriate amount. No fancy button or setting for it, just a guideline I follow for myself! -Hannah 🌻

[@elizabethman7313]

‘… to bless another category’ 😂

I think this is the first time I see a KZbin video with zero dislikes. I'm so tempted, but I won't do it.

[@janeknight3597]

Any chance of being able to export the pretty reports screen as a pdf file?

[@YNABofficial]

Unfortunately, YNAB currently only allows you to export a CSV file. If you want images, your best option will be screenshotting! There's also a nifty Chrome extension you can potentially use for this situation called "GoFullPage". Allows you to capture a whole page worth of info in one sweeping scan! I hope that helps. 🤞 -Hannah 🌻

[@SillySaraK]

I took a year worth of data and did the average and then just add that every month.

[@stevesmith4901]

I read "Fluctuating" as Flatulating expenses, and I was like I know exactly what they mean.

[@YNABofficial]

Oh my gosh, now I want to know exactly what YOU mean... -Hannah 🌻

[@stevesmith4901]

@@YNABofficial Haha! I can't believe I got a response from Hannah herself. Anyway since you ask. Interestingly, I understood it to mean fluctuating expenses with the added quality of being annoying. Like the power bill, water bill and such. So yeah, not much different from fluctuating expenses. By the way Hannah, I want you to know that I love watching your videos. You are sometimes hilarious!

[@YNABofficial]

HA! Well, sometimes they sure do seem to flatulate all over your budget when they spike higher than you anticipated. Darn tootin', they do... -Hannah 🌻

[@sherrylynnbishop8007]

@@YNABofficial Ha ha! Pun intended I am sure! (Darn tootin')

[@tallie0713]

I would be a hydro bill - because I'm Canadian 🌊

[@JewelBlueIbanez]

The real fun is having two utility bills in one month every once in awhile.

[@markdaniel7689]

I just budget to the avg then add $5-$10. Keep the overage.

[@SmallSpoonBrigade]

That's generally sound, that should come with the added benefit of having a bit of money to handle minor rate increases.

[@degtyarm]

Lump all bills into one category

[@itsGabrielaCristina]

What would be the benefit of that?

[@meganstull8967]

@@itsGabrielaCristina I lump my gas and electric into one category. Gas is always highest in the winter (heat) and electric highest in the summer (AC). My goal for the category stays the same all year, but the utilities swing back and forth.

[@sherrylynnbishop8007]

I have ALL my household bills lumped into one category (except mortgage) - internet, electric, water & sewer, phone, and TV viewing services. (I don't have a gas bill as I live in an all electric home.)

[@kurimus8299]

But when you overassign money and then move the extra into another category, it leaves those ugly yellows in the budget :D

[@kurimus8299]

I mean, if you add a monthly target that is more than what you need to assign that month and then move the money.

[@en3mes]

Hanna pls date me

[@smediumlarge]

I think she's married.....

[@aint2proud2meg]

Don’t make it weird, man