How to handle early expenses in a category with consistent monthly contributions

Hello! I'm a longtime YNAB 4 user who is trying to make the switch over to the new YNAB. I'm wondering how to best handle the following issue:

In YNAB 4, I would allocate a set monthly amount to accounts like "Birthday." By doing this, the monthly budget outflow amount was very consistent. My goal is to have a set amount in that category by the time the birthday arrived. 

Sometimes, however, we purchase gifts a few months in advance of the actual birthday, but the birthday category isn't completely filled up to the goal amount. In the old YNAB, you could have negative balances in a category and roll it over into future months--so this wasn't an issue.

However, in the new YNAB, this type of overspending is not allowed. I'm having to cover the overspending from the current month rather than pulling from the future month's balance in this category. So, I'm wondering what the best way is to handle this type of situation in the new YNAB.

Here's an example: Let's say my birthday is in April, and I have a "Dan Birthday" category. I contribute $10 per month so that by April, the birthday fund is $120. In January, however, I find a great deal on something and I purchase it for $120 and put it in the "Dan Birthday" category.

However, because I haven't yet made the $10 per month contributions for February, March, and April, my balance is only $90 so I have a negative balance for a few months. In YNAB 4, this wasn't a problem. However, in the new YNAB, this doesn't work. 

I'd greatly appreciate your thoughts on how to best approach/solve this problem.


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  • Wam from other categories. Change your goal to say you no longer need anything for that category.  The categories you have taken from will all have increased monthly contributions but you will no longer have to budget to dabs category. Make a note in dans category that he doesn’t need any more money this year. 

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  • Essentially what you were doing in YNAB4 was wrong - you were using a functionality that they built in to deal with credit card debt to lie to yourself. The minute you have any red in your categories, the rest of your budget is inherently unreliable because the money has to come from somewhere. So you really didn't have $24.22 available for Alisha with the negative $49.70 for Dan. Even in YNAB 4 you were always supposed to cover your red. It's one thing if you go over by $2 on the 31st of the month when payday is in the 1st of the next month, but saying that you are going to let it ride for months at a time puts monopoly money in your budget and makes it everything else untrustworthy. The only time I allow myself to use the red arrow is with purchases where I buy multiple of something with the plan to return all but one (online clothes shopping basically).

    YNAB believes that you should reallocate from a lower priority category and get rid of the red in the month that the expenditure occurs. If you do not do this and the transaction was done with a credit card (actually if any transaction in that category in that month was on a credit card), YNAB will turn it into credit card debt when the month rolls over. If everything in the category was cash, it will reduce your next month TBB.

    Like 3
  • Simply put, when you made the purchase your goal amount was not met yet you spent the money knowing that you will eventually have that income from Feb - Apr, but that goes against the YNAB philosophy of only spending the money you have.

    One idea for the following year is to change your birthday goal targets to a few months prior so you have the money budgeted sooner.

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    • Matt T This was one of the ideas I came up with as well. Thank you!

      • Agent99
      • Working to Get Smart at budgeting, finances and life
      • Agent99.1
      • 1 yr ago
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      Matt T  I do the same as the OP, however, you never know WHEN you are going to find that perfect gift.   I work to put a hefty amount in my "Birthdays" category each month but my family birthdays are heavily grouped in short periods (Jan-Mar;  June-Aug).   So as much as I try - I will OFTEN go red by a little bit in this category for a month or two.   I don't feel it's monopoly money as it is less than 1% of my total budget, probably even less than.5%.    This is one of my TOP reasons for not moving to nYNAB.   It won't let me budget like an adult.  

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      • Matt T
      • matt.1
      • 1 yr ago
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      Agent99 I agree. I feel like there's no simple answer here. Buying gifts is truly a year-round consideration and can't be designated to just a specific month or target dollar amount. When Toys R Us was liquidating over summer 2018, my wife and I ended up buying a bunch of gifts to cover the next 6 months. However, there's NO way I had my gift category goal met at that point since I try to meet my gift goal closer to the holidays. I think what you said makes sense - to have a general gift category without a goal setup and just contribute monthly to it with the hopes that when I need to buy a gift I have enough. Not ideal.

      Like 1
  • You are using YNAB wrong all along. You should never have negative balances in your budgets. Here is why. 

    you are budgeting with what you have in your bank account. Your budget account turns red when you have budgeted more than what you have in your bank account. In other words, you are spending the money in your bank account but not reflecting this spending on your budgets because you are predicting that you are going to get paid. YNAB does not like predictions. In YNAB you only budget what you have in your bank account. Everydollar and Mint allow you to do this prediction. But keep in mind that this type of thinking is inherently against YNAB's understanding of budgeting. I suggest you that you should never overspend your budgets. Roll with the punches if you have to spend. 

  • Thanks everyone for your thoughtful responses. I appreciate your input and advice.

    I agree that overspending creates an inaccurate budget -- and I also realize it goes against the YNAB philosophy. 

    I'm just looking for an easy way to administratively handle this type of approach -- and while I know it makes my budget unreliable, my "age of money" is well over 120 days, so I'm not worried about checks bouncing, etc.

    Having said that, I think I'll either aim to fund my Christmas/birthday accounts a few months  in advance of the holiday, or create a "slush" account from which to pull to fund those times when I purchase a gift in advance, and then fill that category back up the following month.

    Thanks again everyone. What a great, responsive community! 

    Like 1
  • If you're just transitioning from YNAB4 to nYNAB, can not set your budget amounts in nYNAB equal to the available amounts in YNAB4? Assuming you had the money available, would it not transfer over? Or are you actually spending money before you have a budget for it?

    • Never mind - I see that you are, in fact, spending money before you have it.

      I sometimes transfer expenditures to a journal account in one month, then record the expense in a subsequent month. I do that for business expenses for which I'm directly reimbursed. But I wouldn't do that for personal expenses unless it was only a few days' difference between one month and the next.

  • I simply combine these into a single category. Use the notes to remind you how much you wanted to spend on each person. I've also given YNAB feedback (outside of this forum) to make a goal smart enough to deal with such a multi-outflow category. You might do the same.

    If you want to keep the dedicated sub categories, reallocate from one or more other birthday categories and recompute their budget entries so as to meet the original timeline/amounts.

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