Getting Started and Frustrated

I'm new to YNAB. I've spent the past 3 days devoted to this platform. Added all of my accounts and have spent most of the time just trying to figure out why the numbers aren't matching what's in my bank accounts. Haven't even gotten to the actual budget part yet and about to throw in the towel. 

Currently I have a checking account where the available balance is $3,075. In YNAB my cleared balance is $4,885 + uncleared balance is -$958 = working balance of $3,927.

Any tips to straight this out?

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  • If you haven't started budgeting yet there shouldn't be a cleared vs uncleared. I would say start fresh. Just enter your starting balance of $3075 in your account and go from there. Disregard any spending up to that point.

    Like 4
  • Start fresh how? Should I delete all transactions and relink accounts?

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      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 2 mths ago
      • 2
      • Reported - view

      Lavender Cello yup!

      Like 2
    • WordTenor
    • Can we agree that goals are dumb and immature? Sure.
    • WordTenor
    • 2 mths ago
    • 1
    • Reported - view

    Yeah just start with today’s cleared balance, since it sounds like you know how to find it. Make that your starting balance in each account. Enter in any pending transactions manually and budget away the resulting negative category balances before you begin assigning your starting balances and setting targets (I recommend not setting targets at all at first but supposedly the new workflow works for newbies so…)

    If you choose to link thereafter be vigilant for about a week for any transactions which may have been pending at your bank. They should match the ones you entered. 

    Like 1
    • WordTenor I did a fresh start and reconciled my balances to match the "running" balance (I'm a BofA user) in my accounts. But my accounts are all linked still. That was the main point of YNAB for me -- to link my accounts with a budget so I'm not having to manually enter everything. I need to automate my budgeting or this doesn't make sense.

      Like
    • Lavender Cello You can't really automate the initial set up of an account, no matter what software you use. There's always things that go wonky, whether that's double counting transactions that happened that day in the starting balance and as a separate transaction, or pending transactions, or other stuff. Once you get it set up this first time, YNAB should be able to automatically import the transactions after that. 

      So as WordTenor said, set it up manually to start with, then keep a close eye on it for about a week, and then it should be fine. You'll still want to monitor it and reconcile (make sure YNAB and your bank match) occasionally, because you never know when something will import weird.

      Like 2
    • Lavender Cello Welcome to YNAB! I'm glad to hear you made a fresh start, but we definitely want to make sure you're feeling confident moving forward.

      Referencing the running balance next to your most recently cleared transaction is definitely the most surefire way to get the exact right starting balance - this article might help, too, if you're still not feeling 100%. 

      Just as Fuzzball Meows mentioned, keep an eye on those accounts as transactions start to import, and be sure to walk through this reconciliation process after a week or so 😊From there, let us know how it's going. We'll be here with tips and tricks for getting into a good routine! 

      Like 1
    • Rachel I'm sorry, I'm confused. Moving into October budget now, if tomorrow I pay the nanny for work in September, do I go back and assign that to September or since the transaction occurred in October...this is all new to me. Sorry! Is there a class or something where I can screen share my budget with someone confidentially? 

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      • satcook
      • satcook
      • 2 mths ago
      • Reported - view

      Lavender Cello you record transactions when you make them so that transaction for the nanny will count towards your October budget. If you have money in your nanny category it will still be in that category tomorrow 

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      • monkeyhanger
      • No animals were harmed
      • monkeyhanger.1
      • 2 mths ago
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      Lavender Cello the date of the transaction is all that matters. If you pay it on 1 October it is an October transaction and be recorded in the activity column of October's budget (i.e. it comes out of the available balance in October). It doesn't matter if you were paying for work done in September, buying groceries for next month or you're booking for a theatre trip next March. You spent the money in October so it's an October transaction. It is a change of thinking for some but it is a good thing because it makes thinking about your finances so much simpler in the long-run.

      You asked about classes, etc. There is a lot of support in various guises on the website including free workshops and video courses. You can access them all from the menu bar on this link:

      https://www.youneedabudget.com/the-four-rules/

      I've seen support have individual phone calls with folks too.

      Good luck. It's worth it.

      Like 2
  • @monkeyhanger.1 and @Rachel here is my plan. Tell me if this sounds right:

    1. I did a fresh start yesterday and reconciled all of my checking / savings balances to match the cleared balances in the actual accounts.
    2. I reconciled all of my credit card and balances to match the cleared balances (all $0 because they are paid off).
    3. This morning I'll begin adding any transactions that have occurred in the past few days, including paychecks but only after they officially clear.
    4. Once I'm done with the recent transactions (how far back should I go? I was just thinking fresh start with October but I'd enter in the Sept 30th paychecks because I'll need those funds to assign to October spending.)
    5. After adding recent transactions (cleared and uncleared), I'll go through and mark the ones that have processed in my accounts as "cleared".
    6. Then, I will begin setting targets for the month of October
    7. Then I will start assigning the funds that I currently have cleared toward those targets -- but only until I've used up the available funds.
    8. For example, my wife's paycheck came through on the 29th and cleared on the 30th. I'm entering that manually and clearing it. Whereas my paycheck came through today but hasn't yet cleared -- so I'm entering it but not clearing it. Once it clears I'll clear it and assign it to my budget.
    9. So because I don't have enough funds (today) to assign to ALL of my budgeted targets, I'm only going to assign to the point where I run out of assignable funds. So things that I know I'm going to pay for this month, like our mortgage, I'm going to leave unassigned until the paychecks come in to cover it.

    Does this sound about right?

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 2 mths ago
      • 1
      • Reported - view

      Lavender Cello you are on the right track. 

      Re: points 3/4/5: you only want to add the transactions that are NOT included in your starting/cleared balance. Don't go back further than that or you'll be double-counting some transactions.

      Re: 6/7: Targets are *optional.* They are useful for goal setting and to make assigning money to categories go faster when you have new money to assign, but you don't need to have a target set before you assign money to a category. 

      Re: 7/8: As soon as a transaction is entered in the register (not counting future scheduled transactions) it affects the budget, even if it's not cleared yet. If your and your wife's paychecks were definitely not included in the cleared balances you used for your fresh start, then yes you would want to manually add them. (If you did a fresh start using the cleared balance on the 30th and your wife's paycheck cleared on the 30th, it might already be included in your starting balance!)

      Re: 8, part 2: You don't need to wait for inflows to be cleared before you assign the money to categories, you just need to make sure it's cleared before you *spend* it. 

      #9 is exactly right. You don't assign dollars you don't have, so you have to prioritize assigning money to the categories that are going to be spent from the soonest. (A useful question is "what jobs does this money need to do before I get paid again?")

      Like 1
  • Rachel  see above (don't think it tagged you). Also, should I categorize purchases made using a credit card? Or leave them uncategorized and just set a target to pay the card in full by the end of the month every month? If so, how do I get an accurate report of spending by category if it's just all going on a credit card?

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 2 mths ago
      • Reported - view

      Lavender Cello a credit card is just a method of payment, just like a checking account. Record all your credit card spending in the appropriate register, categorized to the correct spending category. YNAB's credit card handling is very slick - when you record a CC transaction, YNAB will move the money from the spending category (caveat: IF there is enough money in the category) to the correct CC payment category, effectively reserving those dollars for paying off your credit card when it is due. When you make your CC payment, it's recorded as a *transfer* from your checking account to your CC account. There's no category assigned in the register for this, but YNAB knows to deduct the amount of the transaction from the CC payment category. 

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  • Rachel

    Ok so I'm going to do another fresh start now, lol. Tell me if this makes sense:

    1. Fresh Start
    2. Reconcile Balances (Starting/Cleared balances don't match my Actual Cleared Balances in my bank accounts), forcing them to match.
    3. So now I'll have a Fresh Start on October 1, with up-to-date balances -- regardless of any transactions that occurred or posted before today. I'm starting fresh.
    4. Then manually enter all transactions that are not included in the starting/cleared balance (which should be any charges that are "processing" in my Bank of America app or "pending" in my Chase accounts) -- I'll do this for checking and credit cards
    5. Don't set targets (yet).
    6. Start assigning dollars to various categories
    7. As more inflow happens, assign those dollars to categories
      1. Our mortgage is paid on the 15th of the month using paychecks that won't come in until that week. So for now, just leave that category alone and then once the paychecks are deposited, assign them to the mortgage category?
    8. What about clearing transactions? While I'm doing transactions manually, do I need to be checking my bank account every day, looking for transactions to change from "processing" to "processed" and then clearing them in YNAB? 
    9. Finally, when should I begin using the Bank Import?
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    • Lavender Cello 

      1/2/3 Yes. Although I personally would just type in the starting balance as the cleared balance, rather than taking the additional step of using the reconcile function. But whatever you find easiest.

      4 Yes. Make sure it really is processing/pending and is NOT included in the starting balance. Turning on running balance in YNAB's account view can help with this.

      5 There's disagreement about this. YNAB apparently thinks new people should be setting targets, many experienced users think not. I'd set targets for things like annual subscriptions, so YNAB can do the math for me on how much I should be setting aside per month to be able to pay the subscription fee, but maybe not for things like groceries and rent and utilities.

      6/7 Yes.

      7a - If you pay the entire mortgage from that paycheck and are comfortable leaving the category entirely empty until it comes in, then yes. Leaving a category as big as rent/mortgage entirely empty causes me anxiety, so I part funded it with the first paycheck and finished with the second until I got a month ahead.

      8 - You should set up some regular time to reconcile your accounts. Some people do this daily over their morning coffee. Some people do this weekly. Some people do this less often (although we see those people having questions about what went wrong and why aren't things matching more often). I only clear transactions when reconciling, and I do that every weekend. 

      9 - You can set that up as soon as you'd like. Or not at all. Personally, I find how YNAB handles the imports to be annoying, so I don't have it import. Others start by linking their account. Do whatever works for you. Long time users generally recommend setting up scheduled transactions and entering purchases manually regardless of direct import, though, so you have and active engagement with your budget.

      Like
    • Lavender Cello Sorry I’m a bit late to the party today! It sounds like you’re on exactly the right track with this new Fresh Start 🙌

      Fuzzball Meows has really said it all here, so I first want to affirm all of the above. 

      1-4: Yes, you’ll definitely only want to add transactions that clear after 10/1, and get into a good reconciliation rhythm. If checking in daily feels good to you, I do highly recommend it (especially because it makes manual entry quicker).

      5: As far as setting Targets goes, I do recommend it! That said, it's totally up to you! Something I like to mention to new YNABers is that you know your priorities better than software does - so if you do set Targets, it’s still a good idea to double-check your available amounts throughout the month (whether green, yellow, or red) to make sure they’re in line with your priorities. Adjust the targets to your priorities instead of letting the initial targets you set dictate your actions 👍🏻

      6: Yes, but just until Ready to Assign is at zero! 

      7: Yup! But just to add extra clarity: be sure to categorize those inflows as Inflow: Ready to Assign before assigning the dollars to your categories.

      8: I like a daily check - especially because it makes manual entry a quicker task, and keeps your budget super up-to-date and in line with reality - which is super important! But it's up to you. As long as you're checking in a couple of times a week (and reconciling at least once a week) that should keep you pretty on top of things.

      9: Totally up to you! I think there's huge value in using manual entry while you increase awareness of your spending, and learn how a budgeting routine with YNAB looks, but you can try and link your accounts whenever you'd like! 

      It sounds like you’re on a great path here, but it can be nice to get some affirmation, so let me know if you'd like to take things to email or have me check things out via Support Access - I'll be happy to pop in for a look 😊

      Like
  • Fuzzball Meows   Rachel

    Guys, this is making a lot more sense now. I think I'm on the path to victory. Help me out with this though...

    I used my credit card to pay for the dentist, and on the credit card transactions I categorized the transaction as such ("Dental"). So it's showing up here in my October budget. 

    Should I be assigning $237 from my bank account to the credit card payment to pay for the dentist? Or should I assign it directly to the dental category? If the later, won't YNAB see that $237 transaction as two separate ones if I later go and make a $237 payment to the credit card?

    Does that even make sense?

    Like 2
      • satcook
      • satcook
      • 2 mths ago
      • Reported - view

      Lavender Cello budget $237 to the dental category (if you have it). The money will leave your dental category and go to the credit card payments category where it will wait for you to  pay the bill 

      Like
      • Yes I can
      • yesican2020
      • 2 mths ago
      • 1
      • Reported - view

      Lavender Cello it sure does. And welcome to YNAB. It sounds like you're working it out.  

      A couple of points which I find helpful when thinking about the software

      1. It is a budgeting methodology as much as a piece of software.  Now you've got it setup, spend some time reading or watching the YNAB content on the four rules and keep coming back to them as you progress.   Also, think about the idea that this is an electronic version of the envelope system of budgeting. 

      2.  It might take time to really get the difference between accounts and categories but once you do something magic starts to happen.   This article is one which people will keep sending you to read  (I also found some good content on Reddit when I was learning). 

      https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

      There is also an analogy people use about how its no different to have your money in your right pocket or left pocket ie. it doesnt matter which account its in.

      3. Credit card are confusing in YNAB and controversial (in part because YNAB has changed their setup from what it was years ago).  I used YNAB some years ago and am now back actively using it, and I have to say I really like the way credit cards work in YNAB.

      How they work is actually quite close to how we use credit cards in real life ie. no money does come out your bank account to pay for the dentist until you make a payment, but the money that you previously had allocated to pay the dentist now has to pay the credit card.   

      BTW, I get this credit card description might be confusing.  Look for one of the YNAB videos or webinars on managing credit cards and it might help.

       

      Best wishes.

      Like 1
  • That's showing that you have October overspending in the dental category. So you want to assign money to the dental category to cover the overspending.

    If you don't assign the money in October, then when the month rolls over to November, YNAB will zero out the dental category, but you'll be underfunded in the credit card category by $237.

    When you spend money on a credit card, it doesn't leave your bank account, and therefore doesn't leave your budget. However, it's no longer available to spend on that category (e.g., dental), so YNAB automatically changes its job to credit card payment. However, in order for the money to be assigned to credit card payment, it has to be available in the category for YNAB to reassign. When the money is not in the category, you get that warning about overspending on the credit card, which increases your debt. When you cover that overspending in the same month, YNAB will go ahead and automatically give those newly assigned dollars the job of paying back the credit card.

    You'd end up in the same place, come November, if you assign the $237 directly to the credit card payment category, but for October, YNAB will still think you have credit card overspending because it won't know that you put that money into the credit card payment category for the dental spend. You're better off assigning the dollars to the overspent category and letting YNAB handle assigning the job of paying off the credit card.

    Like 2
  • Lavender Cello said:
    That was the main point of YNAB for me -- to link my accounts with a budget so I'm not having to manually enter everything. I need to automate my budgeting or this doesn't make sense.

    edited to add - I see you are working your way through this so my long detailed explanation may not be needed but I will leave it in case its helpful. 

     

    Welcome to YNAB. There are lots of free classes. Or you can click the blue question mark and send a question direct to support. YNAB support is AWESOME. 

    However, I want to say one thing. Part of the power of YNAB is that you are not going to automate your budgeting. Yes you can link the bank to import transactions. And there are many discussions about manual vs import. My advice is to enter every transaction manually, set up recurring charges as scheduled transactions, and when the transactions import, they will match to the entry and all is wonderful.  

    I don't know why you are using YNAB or what your goals are, but I will say that being intentional and engaged is part of the "magic" that is YNAB.

    As for getting started, there are classes etc. but keeping it simple is the best.  As @wordtenor said, set the account balance for what you know it to be (from your bank account records). Do you have one main account that you use for everything? Then set that one up. I will assume it has a positive balance. Let's say it is $2000. I will get back to that in a minute.  

    Now, take out a piece of paper (yes I said paper) and make a list of all the categories for things you spend on. I say paper because that will help you figure out how to set up YOUR categories. For example, I have mine grouped by major type - Housing, Transportation, Food, etc.

     

     YNAB starts the template with true expenses which is just confusing if you are not familiar with the lingo .

     

    In YNAB create a category for each of the things you wrote down. Don't worry if its not perfect. Its easy to change later. 

    OK you did that. Now back to the bank balance of $2000. That should be the amount at the top of the budget screen in Ready to Assign. We need to give all that money a job.

    Question - what do you need that $2000 to do between now and when you next get paid. This is where YNAB is VERY different. You only work with money you have. Not money you expect to have. So I assume since its the beginning of the month you have rent or mortgage. You should have a category called rent or mortgage. So click on assign. make sure you are on Manually. Type the rent/mortgage amount in the first box. Then select the rent/mortgage category in the second box. Now click assign. The ready to assign amount on the top is lower. And the amount in the available category beside rent/mortgage should be the amount you just entered. Now the next job. Probably food. How much money do you think you will spend on food between now and the next time you get paid? Don't worry if you are wrong. You can fiddle with it later. Click on assign (manually) enter the amount in the first box and then select the food category in the second box.  Now what? Any bills scheduled to come out of your account between now and the next time you get paid (see how its always between now and the next time you get paid). Whatever those bills are for, you need to assign an amount. Note that you could just click on the assigned column beside the category in the budget and enter the amount there as well. I just want you to get used to the assign function. 

    Keep doing this until the ready to assign amount is zero. Also why I wanted you to do it by assign function because when you get to zero, you can't assign any more. If you just type into the column, the ready to assign amount could go negative.  

    One of 2 things will happen. You will either get to zero left to assign but still have things that have to get paid between now and the next time you get paid. Or you will assign an amount to everything you expect to have to pay for between now and the next time you get paid and there will still be money in Ready to Assign. When you get to this point, let me know which it is and we will continue. 

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