Help! Struggling with mid-month start and "envelopes"

I hope someone can help - I'm struggling because I'm transitioning from a Dave Ramsey envelope system to YNAB mid-month and I'm struggling. Essentially, I've found that all of the withdrawals to put cash in envelopes and then depositing back in to cover expenses that I was using my debit card for - exhausting. The problem I feel like I'm facing is that when I put in the January budget and the transactions that have happened already, it is looking like all of that money is out of my current balance, when many/most of them already cleared. What am I doing wrong? 

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  • Start right now today. Starting balance is what you have today. Then budget for the next six days from that starting balance. 

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    • Jewel This is where I messed up! Thanks

  • Don’t add transactions that have already happened this month. Just start from today and move forward by asking yourself, ‘what does this money need to do before I’m paid again?

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    •  This is exactly where I tripped up, thank you!

  • Your categories are your envelopes. As soon as you allocate funds to your Groceries category, the money is saved for the purposes of groceries, regardless of which account you have your money living in (checking, savings, wallet, etc). If using physical envelopes in addition to YNAB makes you feel better, well that's tons of extra work, but whatever works. However you have to under stand that the purpose and location of your money are two separate things. If I were doing physical envelopes, I would have all the funds allocated to categories in the budget screen, but in the accounts on the left, all of that cash would be listed as being in my wallet account. Read this. Then read it again and again until you get it.

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  • Hi Magenta Mixer !

    When you start in the middle of the month, it can be a little different than what you're used to. This is because with YNAB, you start with the money have on hand today - and prioritize those dollars. Here's a short video that explains these three main steps:

    1. Add your accounts with the balances as of today.
    2. Assign those dollars where they're needed before you get paid again. Ask yourself, “What does this money need to do before I’m paid again?”. Do you have an Immediate Obligation that needs to be taken care of before your next payday? Budget money there. If you have extra, budget towards your True Expenses.
    3. Add your Transactions. It's best to enter transactions right away so you can always trust your budget.


    Instead of focusing on what spending has already happened for the month, look forward to the rest of the month and where those dollars need to be used next. Do you have an upcoming payment due before you get paid again? Make sure to fund these Immediate Obligations first! Then assign the rest of your dollars in your budget according to your priorities.


    A great resource for anyone newly starting out with YNAB are our free, live, 20 minute workshops. You'll want to start with Learn the Four Rules and then move on to Set Up Your budget. I find that new YNABers who take a workshop or two are much more confident with their budgets moving forward!

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  • Hi, Magenta Mixer

    Just wanted to let you know the YNAB software can work with a cash system.

    I'm a cash user.  I created a cash account named "wallet".  When I withdraw from the bank, that is entered as a transfer from bank account to wallet.  When I do cash spending, using the example of groceries, I enter a transaction for vendor: grocery store, account: wallet, category: groceries.

    When I first started using YNAB, I immediately undrstood that if I wanted to continue to use cash, I had two choices:

    • (1) enter the transfers to my categories as transactions, showing the allocation money as spent on the day of the transfer, then continue to use the envelope to guide my spending; or
    • (2) use the YNAB categories to give me a window on how much was still available and use a cash account.

    I figured it was worth a couple of months to try it out, and I was tired or recounting and recouting money in envelopes.  Try using a single cash account, wallet, and let your YNAB categories to tell you how much has been budgeted, spent, and is still available for spending on groceries, gas, entertainment. You can always go back to the separate envelopes if it doesn't work for you.

    I can tell you that it worked remarkably well for me.  I already had a few years of cash in separate envelopes under my belt and I was pretty disciplined about it.  The YNAB categories were sufficient to keep me from blurring the lines.  I can carry a couple of month's worth of cash in my wallet, and never overspend.  I love YNAB and I love cash.

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    • HappyDance VERY VERY helpful! Thank you!

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  • Hoping this might help the next person., it's from Nick about understanding the parts of the main page.

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