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!
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If both accounts are on budget, transfers between the two will have zero impact on your budget. It’s the equivalent of moving money from your left pocket to your right pocket; the total funds in your budget did not increase, you just changed where the funds are stored.
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You moved the money. Now you need to change its job on the budget page.
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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.
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HappyDance thanks for that - v helpful (and brain hurting a little). I still need to do some / a lot of thinking now. If I go back to before I did the transfer - I had a category that was overspent and I need to cover that and also pay my credit card bill, both related. Would a better option have been to cover the overspending category with money from my savings account directly? Then pay my credit card bill? As I said, brain hurting just a bit...
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Orange Hammerhead Someone posted me that link in my first week and it was ***lightbulb***
Its called an envelope system because you can imagine it’s the olden days before computers and you are organising your money with envelopes.
Maybe you have three envelopes, one for rent, one for food and one for Christmas. Every time you get paid you top up Rent one, add a little to Christmas and put the rest in Food. Your categories are the envelopes.
You may keep your envelopes wherever you like, but it’s a good idea to stash them in different places in case of burglars. Your hiding places are the bank accounts.
If you need money for something else, like paying your credit card debt, you’ll have to decide which *envelope* to raid. Where you hid it isn’t important it’s whether you’re digging into your food money or rent money that matters.
What is also difficult is after the YNAB method starts to work, you find yourself with huge balances but no money to spend. It’s really freaky but in a good way. 😄
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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.
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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).
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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.
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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.
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Orange Hammerhead You paid more to your credit card than you had available in your budget to pay it. You need to cover this red overspending from other categories. For newbies, the usual culprit is that they didn't budget to pay off the starting balance (i.e. the transactions you'd made before you started YNAB so YNAB didn't know about them). There are other things that can take this category red e.g. pretty much anything that takes the credit card account balance positive but let's check the most obvious option first.
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Orange Hammerhead The Payment Available amount is the sum of budgeted spending that took place on your card that you have the money waiting to pay off (Activity) and any amount budgeted directly toward paying off debt (Budgeted column).
When you first add a credit card to YNAB, it may have a balance on it. You spent that money, but YNAB doesn't assume you have a plan to pay it back. You need to make the plan. That means you need to budget to pay the credit card back for that spending on the card from before you started using YNAB. You should never pay more than the amount shown as available to make your credit card payment, because you don't have more reserved than that amount for paying it.
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I had the same problem. I wanted to transfer some funds set aside from Savings and put toward medical expenses. My savings account has categories within it. Vacation/insurance/savings. To get the funds into the TBB, I just moved $$ from my vacation category to TBB. Then I moved the $$ into my medical category to cover that expense.
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Spring Green Trumpet said:
My savings account has categories within it.Not in YNAB. Your categories are across all on-budget accounts, checking and savings. Read the article posted above. For convenience, I've included it here:
The Relationship Between Your Budget and Your Accounts
Spring Green Trumpet said:
To get the funds into the TBB, I just moved $$ from my vacation category to TBB. Then I moved the $$ into my medical category to cover that expense.This is just Rule 3, Rolling with the Punches. You could have also moved the funds directly from Vacation to Medical without the TBB middle man.
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Spring Green Trumpet said:
My savings account has categories within it.It's incredibly useful to adopt a different viewpoint: accounts hold dollars, not categories. If there is $2000 in checking and $5000 in savings, where is the New Laptop category that has $800 in it? Answer: either one or partially in both, and you can "move" it just by changing your mind about where you think it is. This is rather convenient, as you don't have to transfer funds from Savings in order to buy the laptop.
