Using Available money--not remembering what bank account I got it from
I, as a black and white personality, can't seem to wrap my noggin' around some of this. I get the concept with "Budgets" being like envelopes. I understand that when the "Available" money is green, I am good to make the payment for a particular category. My problem is that I don't know which bank account I set that money aside from.
To further explain. . .
Let's say I have 4 bank accounts. (Ignore the fact why.) My husband's check goes in one. Mine goes in another. Business income came into another. We gave all our monies a job. Let's just say the mortgage, the garbage, and the clothing categories are now supplied with enough "Available" money from both bank accounts and it's time to actually spend it. Is there a way to know where we planned on taking that money from?
I share your frustration, as a new YNAB user, this poses some problems for me. My problem comes in when it's time to pay for something: I'm not sure which account I need to use for the payment. I read the article referenced in this thread and appreciate that there are essentially two views in play, however, YNAB doesn't really let me switch between those views. What I'd like (and I'm not sure how to submit this as a possible feature request), is the ability to optionally choose a specific checking account when budgeting. That could reduce the available balance in that account specifically while still giving me the overall picture of my budget.
Since I don't know of a good way to deal with this problem, my solution for now is going to be to only link one checking account to YNAB and I'll use that for budgeting. If I need additional funds to cover, I'll transfer them from a non-linked account and will budget as in-flow/TBB. This is kind of annoying for me, but it beats the alternative of not having the broader view of my budget.Reply
The way I manage this in YNAB is:
In the Budget view I tick the categories that I'm planning to spend money from and the column on the right will add up totals for me - the "Total Budgeted" amount and the "Total Available" amount. Then I can look in the Accounts view to see if there's enough in a particular account to cover that.
For example, I'll soon need to pay for my monthly train ticket for work. And I can see that I still have two automatic deductions to go out of my current [checking] account for regular monthly bills (phone/broadband and energy).
If I tick the "Work Travel" category, the "Phone/Broadband" category and the "Energy" category then on the right hand side it tells me that I have a Total Budgeted of £155.30 and a Total Available of £155.30.
So I know I need to have at least £155.30 in my current account to cover these. If I also plan to buy groceries from that account I need to allow some more for that too. Then I look at the Accounts view to make sure there's enough in that account, and I transfer more in if I need to.
I have money in 8 different accounts and find this a very easy way to manage spending from them and making transfers between them when needed. In fact, I find it a lot easier than trying to do it any other way and it's a major reason I started using YNAB in the first place.Reply
I’m considering creating different budgets for my different accounts. For example, my husband and I already have a joint checking account which we use to pay our joint monthly expenses. The right amount is transferred in from our paychecks and the remainder of our checks goes to our individual checking accounts. I’m considering adding another joint account that we’ll use for groceries and other variable monthly expenses and build and manage that budget together. Then, if there is money remaining after our checks have already been split into savings, then joint monthly standard bills, then joint monthly variable expenses, that will go into our individual accounts, and we can each have a budget for that money (because we both would spend our fun money or dining out money very differently). my husband values his independce of spending, so this is my plan to allow us to ensure all our family obligations are met, but still allow us to each spend our “extra” money how we’d like.Reply
One approach is to create a Category Group for the critical stuff that comes out of each account (e.g. rent), and then making sure that you keep the account balances above or equivalent to the "Available" amount for the Category Group. It doesn't matter if you buy groceries from two different accounts, so long as your account still has enough money when the rent cheque clears.
- Category Group: Account A Fixed Costs (Available: $200)
-- Category: Utilities ($200)
- Category Group: Account B Fixed Costs (Available: $700)
-- Category: Rent ($700)
- Category Group: Misc Spending (Available: $1100)
-- Category: Eating Out ($200)
-- Category: Groceries ($500)
-- Category: Car Stuff ($400)
If Account B has $1000 in it, you know you can spend $300 without jeopardizing rent.
Honestly though, after about 6 months in YNAB, we fell in love with the simplicity of categories and we got rid of everything except one joint chequing account, one joint savings account, and one credit card each. Easy peasy.Reply
On the first of every month my main chequing (or transaction) account balance has an amount equal to the following formula:
- My average monthly spend +
- Any big scheduled expenses due in the next 4 to 6 weeks +
If my account has more than that amount, it gets transfered to savings. If it has less than that amount, I transfer from savings to chequing. The $1,000 is just my choice. Originally it was $250, but I found that was still a little too restrictive and required too many bank transfers.
I closed down most of the extra accounts I used to control spending by type of expense early in my use of YNAB, and then I had a few near misses with overdrafting. I finally figured out that my biggest issue was that I was accustomed to keeping my main transaction account very lean. Well, d'uh, I thought, when I finally understood what was going on.
Because I had always relied on the account balance to tell me how much and if I could spend, I was used to keeping very little in my chequing account, as a way of controling my spending. But after I began using YNAB, I was introduced to the idea that if I used the budget categories to guide my spending, I wouldn't overspend, and it won't matter which account I used. Okay. I embraced that concept, but I forgot or didn't immediately understand that I also needed to alter the amount I left in my chequing account. I had a light bulb moment and figured out that all I needed to do was leave more in my chequing account because the account itself was no longer for a specific type of spending; it was now for a specific amount of time. BAM! Life-altering realization.Reply
Hi Michigangster1&2 !
When you have a moment, take a look at our Simplify Guide. Having fewer moving parts in your budget can make things easier to track. However, if you'd rather not cut back on the number of accounts, just make sure to check your account balance before paying any large expenses. Maybe you have $100 Available in Dining Out, but a quick look at your account list will tell you which account that $100 is in or if funds need to be moved around. :)Reply
If you want the complexity of multiple non-credit accounts, spending becomes a 2-step process:
1. Check the category balance ("Can I afford this?") -- reallocate from some other category if insufficient funds are available and you still want to make the purchase.
2. Check the account balance ("Can I use this payment method?") -- transfer from some other account if insufficient funds are available and you still want to use this payment method.
A paid-in-full CC comes in handy, because #2 is usually true. This reduces the complexity of the multi-account budget nearly down to that of the single account, but retains the advantages of the multi-account (e.g., higher interest rates in some accounts).
If you don't want to deal with this 2-step approach, then your best bet is to consolidate to a single non-credit account. This poses other issues, however, like "How do I deal with my friend's cash after I paid for a joint lunch on my CC for the rewards?"Reply
You don't budget by account in YNAB. You budget by category. What this thread is really about is cash flow management. What works best for me is to set up scheduled transactions along with using the toolkit to turn on running balances. Then you can see at a glance what your balance will be at any point in time in the future. Just make sure you have enough funds in there to cover your payments. Of course, I simplify it by having only one payment checking account.Reply