Why is my Target Balance by Date asking for more money even though I have paid the amount YNAB told me too?
I'm super new - just started yesterday and having watched lots of great stuff on YouTube I'm feeling pretty good about my new financial life.
However, one thing I cannot wrap my head around is the Target Balance by Date. I have certain goals set up to pay down some debt by a certain date using the Target Balance by Date method. I put in the amount owing and the time frame to pay and YNAB worked out the amount I needed to pay each month (I checked it was correct by dividing the total by the months just be sure). I then budgeted to pay this amount, paid it but now YNAB is stating that I still need to pay more funds, ie on one item, it is saying I am underfunded by £65 and the circle is stating 0% complete even though I have paid 20%.
It is doing this on all the items I have set up like this, including credit cards.
Why is it doing this? Is there a way to fix it? What will happen if I keep paying the amount I actually need to pay rather than the incorrect amount YNAB is telling me I need to pay?
Are you making a payment for this amount or just saving up funds to pay in the future? If you are making monthly payments, it would be better to use a monthly funding goal and then send the payment off. If you are saving up to pay in one lump sum, this is where the target balance by date is helpful.Reply
Target by date is not a great goal type for this, since it doesn't assume that money will be leaving until you hit the date you set. When you set that goal type, you are saying "I want to have $X available on this date." Sending that money off every month means you will never hit that target.
Figure out what the monthly amount should be, then set a monthly funding goal. That will give you the results you are looking for. Then it will only want you to budget that amount each month and won't care what the available balance is.Reply
So I had a lightbulb 💡 moment and realised that three of the debts I had set up just as any other monthly commitment rather than a debt so of course when I then pay, or remove, the money to the payee YNAB is saying “hey where did that money go” - kinda. So I moved the three debts to a line of credit instead and bingo all sorted. Now I have lots of nasty red negative numbers reminding me I have enough shoes!
However my CC’s, which I did set up as CC’s are still saying I need to pay more even though I don’t 🤷♀️. Anyway after two full days of learning YNAB I’m exhausted so just going to have faith it will be fine.
Thanks for your replies and helping me out.Reply
If using goal by date to accumulate money for a single future bill, set the goal date to be one month before you plan to spend the money. That way YNAB doesn't nag you about not having saved in the month when you actually pay it.
If accumulating money for multiple future bills, do a side calculation outside YNAB to figure out how much you need to have right now, and how much you need to save each month, to pay all bills without overspending. Add the required balance now and set a monthly funding goal for the regular additions.
I do that for auto and umbrella insurance policies. I don't want the clutter of separate categories. The auto insurance is semi-annual but the umbrella is annual. I started with a certain balance and add the same amount each month. The balance drops lowest when I pay auto insurance one month and umbrella the next, but reaccumulates to the required level in time to pay the next auto insurance premium.Reply
If using goal by date to accumulate money for a single future bill, set the goal date to be one month before you plan to spend the money.
This leads to higher than necessary contributions. Deleting the goal will stop the nagging.Reply