Transferring between accounts - why does 'inflow' amount not come up as 'to be budgeted?'
Hi, I've transferred an amount between from my savings to my current a/c (to cover a credit card item). I expected the incoming amount to come up as 'to be budgeted' but it doesn't. But now I don't know how to manage it? Maybe I should not have entered anything in the 'Payee' box? I'm puzzled. Thanks in advance!
In YNAB, the account does not dictate the purpose of the money. That means that moving money between two on-budget accounts does not release funds back to TBB. Cash flow in accounts is entirely independent of budget plan for how you intend to spend X amount of dollars.
Bookmark and read this blog article. The Relationship Between Your Budget and Your Accounts
You may catch on quickly. I had to read and re-read and use YNAB for a while before something clicked in my brain.
Orange Hammerhead said:
Would a better option have been to cover the overspending category with money from my savings account directly?
If your savings account is on budget, you cannot cover a category overspending with by moving money between accounts. You cover overspending in a category by moving money from a category that has an available balance. And yes, you should cover category overspending by reallocating from a lower priority category ASAP. Assuming it is in the same month as the expenditure, this will fix any wonkiness in the credit card payment category.
The account you pay your credit card bill from is a completely different thing. You should pay it from an account that has sufficient funds. If that means moving money from your savings account to your current/checking account, then yeah, do that.
Accounts tell you where your money is. The budget tells you what your money is for.
If you need money in a different account because your upcoming transactions in that account are going to exceed the account balance, you move money between accounts, using a transfer-type transaction. (This also works the other way when the primary account builds up too much money).
If you need more money in a category because it's overspent or will be overspent, you move it from another category, either with the "Move Money Tool" (click on the category balance amount and then pick which category tomove money to/from), or by changing the amounts budgeted in your categories (the "Budgeted" column).
Orange Hammerhead said:
brain hurting just a bit...
I know. Right? It's really hard to stop budgeting by account in your thinking. It took me months, literally, of correcting myself whenever I thought of an account as being for a specific purpose.
This is what my money is for (budget/plan). And this is where I have pots of money stacked up (accounts). Okay. Got it. And then a week or so later I would go right back to thinking the old way again and have to correct myself. It's really worth it to break free from budgeting by account. Stick with it.
Thanks for all your replies and clarifications to date. There is now one more thing that's wrecking my head. So, I've paid off my credit card balance (ahead of due date, yay!!) and the new balance in my YNAB Cr Card reconciles with my bank statement Cr Card balance - except that in the Budget page there is a different (much greater) balance in red in the credit card section and it also shows up in the top right hand corner in a pink oval under 'Payments'. I can't see what that amount relates to or what it means? What is that and where has it come from? I haven't a clue what the info means that opens up when I click on the associated ? If anyone can explain I would appreciate it so much. Many thanks.