Does being a month ahead in YNAB count as a 1-mont...
# budgeting
b
Does being a month ahead in YNAB count as a 1-month emergency fund?
m
Yes. Great question.
p
I remember hearing (@mysterious-tomato-10057 I believe it was actually in those FI Podcasts) that the ideal situation is to be 6 months ahead.
Ideal for FI that is.
But for a regular situation it would be 1 month according to one YNAB tutorial I saw.
b
Is the question whether 1 month is sufficient or if you can use YNAB as a guideline as to whether or not you actually have enough budgeted for one month's emergency?
m
The question as I understood it is not whether he should have 1 or 6 months.
The question is if having enough money in your account to pay for the next 1 month of expenses, does that count as 1 month of emergency fund.
I recommend 3 to 6 months of emergency fund, but that doesn't change my answer to my question that being one month ahead in YNAB counts as 1 month of your 3 month emergency fund.
p
Regular meaning someone who is not attempting to reach FI (guess maybe I should have spelled out that FI = Financial Independence?)
b
No I meant the one month recommendation. YNAB recommended only one month's worth of an emergency fund?
p
Some tutorial mentioned that as a goal to have. Perhaps the term Emergency Fund was actually not used.
s
I think YNAB recommends your "age of money" to be 30+ days. This just means you're in line with their philosophy of not living on the "float" An example would be let's say you get paid twice a month, on the 1st and 15th. You could use the first paycheck in March to pay for the first half of March's expenses, and then the second paycheck for the second half. While this is technically in line with how YNAB wants you to spend your money(ie only spend what you have), it's also pretty close to having to "float" expenses(spend money before you actually get it - e.g. making a credit card purchase on the 10th that you'll be able to pay off when you get paid on the 15th). The recommendation to be one month ahead is just to distance yourself from that happening, and to allocate February's paychecks for March and March's for April. I don't believe this is their recommendation for an emergency fund
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