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?
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.
@monkeyhanger.1 and @Rachel here is my plan. Tell me if this sounds right:
- I did a fresh start yesterday and reconciled all of my checking / savings balances to match the cleared balances in the actual accounts.
- I reconciled all of my credit card and balances to match the cleared balances (all $0 because they are paid off).
- This morning I'll begin adding any transactions that have occurred in the past few days, including paychecks but only after they officially clear.
- 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.)
- After adding recent transactions (cleared and uncleared), I'll go through and mark the ones that have processed in my accounts as "cleared".
- Then, I will begin setting targets for the month of October
- 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.
- 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.
- 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?
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?
Ok so I'm going to do another fresh start now, lol. Tell me if this makes sense:
- Fresh Start
- Reconcile Balances (Starting/Cleared balances don't match my Actual Cleared Balances in my bank accounts), forcing them to match.
- 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.
- 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
- Don't set targets (yet).
- Start assigning dollars to various categories
- As more inflow happens, assign those dollars to categories
- 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?
- 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?
- Finally, when should I begin using the Bank Import?
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?
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.
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.