YNAB doesn't carry forward negative balances and this screws up everything
I've been using YNAB since their version 4 Desktop App days, and quite frankly the Desktop App is still my favorite. I have an almost constant problem with the web app version because it will not carry forward negative balances, and this screws up all my tracking.
Yes, yes, I'm well aware of YNABs rules and why they think this is a "feature" but it's not. It's a limitation that doesn't allow one to properly account for reality.
Just about every month, at the end of the month, various bills are due, and when those bills are deducted from the account can vary by a few days, and I don't have any control over this.
Sometimes a bill will be deducted on the 31st but then the next month, it might happen on the 1st. My lease payment is particularly fickle in this regard, but without going into all my personal finances, suffice to say I have a handful of bills for which it is normal for the bill to be withdrawn by autopay either on the last day of the month or the first day of the next.
The problem arises when a bill is taken on the 1st day of the month but then again on last day of the same month. That causes the budget in question to be overdrawn, with a negative balance.
If I don't catch this, YNAB rolls over to the next month, and suddenly none of my numbers make sense. The money listed as available is less than it should be, and....well I this plagued me for months until I realized what was going on, and now I know that after the first of the month I have to go back and change the dates of a hand full of transactions to make this work. This is very frustrating.
There are other realities of life that cause negative balances to occur as well, such as needing food for the weekend, but the months budget is spent, but the weekend is next month, but you have to buy the food today. Again the budget gets into a negative and I have to go manual edit the date to fudge things to balance out.
THIS SHOULD NOT BE NECESSARY. Simply rolling over the negative balance into the balance of the budget in the new month should be normal behavior. This is why we are all a month ahead in our budgets. It allows things to be seamlessly transition from month to month. The desktop app did this correctly. The web app does not and so causes the end of each month to be a constant hassle instead of a seamless transition.
I'm posting here because I have reported this issue multiple times via YNAB support and have been politely ignored by support telling me this lack of functionality is a deliberate feature.
if you wipe out the overspending, you no longer have insight into the priority of the overspent category.
And thus we've made it full circle. :)
THAT is the problem I am struggling the most with.
If I'm not SUPER careful when I get paid for those things, it is very easy for me to just drop that money into a category that I need to fund, forgetting that I should put that directly onto my credit card.
But your credit card payment category will not be green so it should stand out as a category that requires attention.
Key word - should. I wouldn't be using YNAB if my cards were zeroed every month. And I would hazard a guess that the vast majority of YNAB's customers are in the same boat. So the multiple cross checks is REALLY helpful to those of us floating around in the chop.
Why not? When I started YNAB many years ago, I used YNAB to help me get out of debt. After getting out of debt, I used YNAB to build a full emergency fund and maximize my other savings. I continue to use YNAB to optimize my funds.
YNAB4 user here, I came over here to see if it's finally time to move to the web app.
I am astonished that the company is still holding on to the toxic combination of a price increase (yearly subscription etc) and loss of functionality that is important to me, ie, negative rollover -- apparently for ideological reasons. They choose to spend hours and hours in discussions with their customers rather than implement a simple preference switch? (Covered in all manner of warnings that it would "violate rule 3", if you will...) I really don't get it.
They choose to spend hours and hours in discussions with their customers rather than implement a simple preference switch?
I suspect this is because they believe they would spend even MORE hours if they did. Don't forget they have all the support records from YNAB4 which did have such a switch, and I know for a fact that people getting into trouble with Monopoly money in their categories was a VERY common support issue.
Brandon ... if you'd like a pretty easy way to manually emulate turning the red arrow right on a category (as in YNAB 4) for those occasions when you need to, read this post on Reddit by the user Trepanated. Cheers!
I have been a YNAB4 user for several years. Because I am a Mac user, I am being "forced" to switch to the online version of YNAB. The lack of the "red arrow" is the biggest drawback, and I will be looking for another alternative. I would love to hear from others about other options. I loved YNAB4, and I use the red arrow for reimbursements (medical flex reimbursements, etc.). I am debt-free. I am not trying to ignore overspending. I have the funds to cover all of my categories that may have a red balance. But I need to know what that red balance is so that I can accurately allocate funds to the correct budget category once I am reimbursed. Once the calendar flips to a new month, I'm lost. SO frustrating! Again, I love YNAB4! I do not want to switch to something else, but unless I can figure out a smooth work-around, I will need to. If anyone knows of other solutions, I would appreciate hearing from you. Also, how do I go about formally registering my request for "red arrow" functionality? I know others have requested without success, but I figure adding one more voice to the request can't hurt... Thanks!
Using the red arrow in YNAB4 was fundamental to how my finances worked- and I didn't get in a mess. I understand why YNAB is trying to protect people in general, by stopping someone 'accidentally' getting into trouble by fooling themselves that they have more money than they really have. However there are clearly a cohort of users who were fully aware of the risks and yet it worked well for them. Why can't YNAB allow it as an advanced setting? You can put all the warnings you like before it is activated. It seems we are to be treated like financial children- with all risks removed, not financial adults- capable of deciding what works best for us.
For me nYNAB is an absolute no-go until they stop being so dictatorial and bring this functionality back. Until then, I'll run YNAB4 on Parallels with macOS Mojave, whilst the rest of my Macbook can upgrade to Catalina. Is seems Parallels will get my annual subscription, not YNAB, such a pity....
Same for me. The lack of negative carry-forward is killer. We use it for a few reasons
- Tracking debts, in YNAB 4 we have a Debt parent category with 15+ children to track things people owe us.
- Year level budgeting with huge variability in when the money gets spent.
- Tracking when we do over-spend in a category the negative carry forward helps us remember to keep spending in that category low until it gets back positive.
I guess a lot of this boils down to using YNAB4 more as a monthly budget category tracking tool than a pure envelope budgeting system.
I'm sort of amazed that this isn't just a budget level option people can turn on.
Yes, I also prefer the red arrow. I should be able to have categories where YNAB allows for carry over so that spending on reimbursible work expenses do not affect the budget in real time.
I much prefer the old YNAB 4 and regret switching. I find the way this web app operates to be too confusing.
I think one part of the problem is that YNAB is really meant to help folks plan to get out of debt or manage money when they are operating on the margin. If you are someone far enough ahead that you are willing to carry a negative balance on some budgetary items and are confident you can do so without undermining your debt situation, then the old YNAB 4 is superior.
Incidentally, for such folks "living off last month's income" is far superior than this "Age of money" metric. Once your "age of money" is up over 100 days, what value does it possibly serve? Now all income is budgeted to "to be budgeted" when I much prefered budgeting to "income for next month".
After a few months of using YNAB, and coming from mint. This was a big surprise.
The issue for me here is that it wasn't clear enough that this was going on. And it was only once I had a couple thousand dollar reimbursable expense for my work, AND was late doing my November final budget check until this week in December, that I noticed this behaviour.
Red categories for expense report items were things I were ignoring, because I knew they would be paid out in the next week or two. I'm also using my income this month for budget further out than next month.
Now that I've read this thread, I've got it sorted, but I would really have liked better notification that this would happen to the red categories.
I've been trying to follow this thread and I was wondering if there is a useful comparison of the two sides of this discussion written down in one place. It has been so long since I switched from YNAB4 to YNAB I cannot really remember what I am missing.
Green Wizard said:
Even if I went over in a category, it was okay because I had enough money overall in my accounts that it was a drop in the bucket compared to my overall budget AND with the red arrow I knew exactly which areas of my budget were giving me problems and I could easily track them by the red balances instead of losing them at the end of each month.
Surely the idea is not to go over with any bucket at anytime, YNAB is not about having a month-end process and relying on the red-arrows, but it is a lifestyle choice. The inference of having a single red arrow is that you do not have enough money in other envelopes to spend on everything you had planned for the month. This feels more like playing month-end wack-a-mole plan accurate and honest budgetting. The problem is you have too much money and therefore do not really need a budgetting tool like YNAB, there is no consequence to overspending. There are many YNAB users living hand-to-mouth and one single red-arrow would mean having to make very conscious decisions about how to cut back in other areas.
the two sides of this discussion
As I see it, it boils down to those with "enough" money dislike the inconvenience of reallocating funds to explicitly cover a shortage until more money arrives. YNAB's stance is it's contrary to their methodology of accurate category balances, which is crucial to success for anyone not in the first class of users. The YNAB bean-counters have decided there are more of the second class than the first, and thus we are where we are today.
YNAB has already had the "opt-in" approach in the previous product, and they had to deal with the support costs from that second group who were burned by opting in when they shouldn't have. No doubt this figured into YNAB's decision to nix it completely.
My personal feeling is YNAB should have simply done a better job of educating people as to the ramifications and left the opt-in capability. If someone wants to shoot themselves in the foot, that's their business. I also recognize it's easy to be ideological when I don't have to foot the bill -- support costs or negative fallout when someone invariably does shoot themselves in the foot. YNAB doesn't have that luxury and I believe has decided it's safer to write off the smaller market segment.
Habanero Salsa said:
Without the red arrow, I'm in the position of implementing it manually, which is more likely to lead to errors. Further, not having it complicates reimbursements with my roommates.
Could I please ask you to explain what 'it' is? What is 'it' that you are in a position of implementing manually?
I understand that the red-arrow can make managing reimbursements easier but for me it distorted my Income vs Outgoings so I much prefer to transfer the debt into an on-budget asset and keep it away from categories altogether - I never used red-arrows when they existed - a personal choice I know.
How do you know which red-arrow is less than half of one percent so you can ignore it or which ones are a serious problem that have to be dealt with.
Because I know that my total budget contains $X. It's right there at the top of my list of accounts and takes into account the balances on my credit cards. I know how much I've overspent because it's right there in red. I can tell at a glance the magnitude of the issue and I don't need pinpoint math accuracy to know that an overspend of $Y is no big deal in my budget because my Loss of Income category balance is literally 1000*$Y.
Also, to be quite frank, I don't overspend my categories because I make it a point to live well below my means. I let my clothing category get overspent because I do over order because stores in my area don't carry my shoe size and it's a convenience. And I overspend my reimbursable category because I don't budget to it; I file my work expense reports every 2 weeks and get reimbursed within 5 days. Yes that system could break down, but at that point in time, I would in fact take funds from another category.
Habanero Salsa said:
The “loads of red arrows” is mostly a strawman
None of us end-users know how common "red arrow abuse" really was in YNAB 4. I have my doubts whether the company even knows -- I doubt they collected any reliable analytic data around this. Reading between the lines, they seem to base a lot of design decisions around anecdotal feedback received in training sessions and customer support interactions.
I do remember reading red-arrow horror stories on the old forum -- well-intentioned users whose budgets were lit up in red, seeking help and wondering why their finances weren't improving despite months of dedicated budgeting. It's easy to mock and dismiss those users -- "they should have known better", "they did it to themselves", etc. -- but evidently this happened often enough that the company felt it warranted a change in the software design. C'est la vie.
Just to simplify this. Let's use the simple case of work expenses on my credit card which, in my case, fluctuate wildly, but average $2000/month on my own card.
Under the old YNAB4, the key underlying philosophy was "live off last month's income". Since I got myself on track and ahead years ago, I'm filling out my January budget with my December income. I know that if I process my expenses on time, I'll get the $2000 back in the next month. I do not want those expenses to come out of my budget. I use the red arrow to pull those expenses out of the budget, which I know will be covered by the reimbursement cheque in the next month. I can continue to "live off last month's income while carrying an expenses "debt" because I trust the reimbursement is coming. I'm carrying it forward and pulling the expenses out of budget. Essentially treating it like an offsetting "debt" and "asset" off of household finances.
Under the new YNAB, the expectation is that I "fund" the expense category first with $2000. So I have to move the money there first. The philosophy now is not "live off last month's income" but "age your money". I get this. But if you are in a position where you are comfortable considering some of your spending as off the Income/Expense statement in accounting speak, then it really is a pain and it's messier in terms of understanding where my budget is at.
The new YNAB really is patronizing in this sense and does remove some control features from the user. Although I do agree that buying 6 pairs of shoes to return 5 later probably should not be seen as an expense to carry over off budget from month to month, it is personal preference if one wants to. dakinemaui speaks of the underlying principles of YNAB, but these are actually NEW principles with the web version and I wonder if they are based in web coding convenience rather than best practice.
Under the new YNAB, the expectation is that I "fund" the expense category first with $2000.
That is hardly mandatory, and probably the lesser used option. I mean, most people simply cannot carve off thousands of dollars for large work expenses in the first place. The expense is covered by debt until the payment comes in.
If you are a month ahead and your categories sometimes go negative because of the dates...I get this.
You budgeted $500 for rent in Nov and when Dec's rent comes out on Nov 30th instead of Dec 1st you have a negative balance. To fix this just have two months budgeted.
For example: Let's say you have $1000 budgeted for rent in Nov. When Nov rent comes out, you still have a $500 available balance to cover for Dec. So if it comes out on Nov 30, you have a $0 available balance. Then in Dec you budget $500 which gives you a $500 available balance so that if Jan rent comes out Dec 31st, then available balance is $0.
Does that make sense?
Green Piranha said:
Sometimes I just have to carry that negative balance and under-budget several categories for a few months to catch up. I would rather do that, than all of a sudden remove all my money from all my other categories to cover a crash, which then makes it look like I have little money to do anything, which I already know is the case.
This really gets to the heart of the matter.
If it "looks like" you don't have money to cover a potential crash -- and you "know" you don't -- then why do you want YNAB to lie to you about it? Sometimes the truth is unpleasant, but hiding from it won't help.
I'm sympathetic to the argument that, sometimes, it's just a matter of convenience. You're willing to (temporarily!) sacrifice some accuracy in your budget to avoid the busy-work of adjusting multiple categories, especially if you expect to undo those adjustments a few days/weeks later.
But when there's no clear timeline for resolving the shortfall -- just a vague commitment to "spend a few months catching up" -- that's a pretty clear violation of Rule-3. The money has to come from somewhere. YNAB wants you to grapple with that fact, not hide from it.
I feel like some folks just don’t see the ongoing practical use case for the red arrow. Examples from my budget:
I get my haircut every 6 months. I have $300 in my Hair Care category. The actual cost ends up being $325. So HairCare is $-25. I let that ride with the red arrow. The following month, I allocate $125 to the category, balance is now $100 and I will fund accordingly so in 6 months I have $350.
I pay $70 for take out dinner on my Credit Card but husband should be paying so my Dining Out category *may* be over by $70 at the end of the month. The red arrow reminds me to follow up with husband re: reimbursement. This is a Rihanna situation so I need a visual reminder to get the funds back.
I’ve mentioned the airline situation before. I try to put a hefty amount in this category but when Google Flights tells me that the airfare is good, I’m buying and I’m usually no more than $200-250 short. I let that negative ride and it’s covered within two months because the red indicator shows me the funding priority.
This how I’ve run my budget for last five since becoming debt free and buffered. It works well for me. Can’t speak for anyone else.