Budget audit is OK but category shows overspending?
Hi! I am trying to understand if I can trust my YNAB data. I've read everything I could, and still don't know how to solve this. I've been using YNAB for six months, although I'm newbie here in the forums.
I performed a budget audit (https://docs.youneedabudget.com/article/203-unpacking-ready-to-assign) and everything matches. But I don't fully understand the process of budget audit, so I don't know if it is enough.
I have a category with overspending in the past, that apparently was not corrected timely (the same month). So, it now says something like:
Funded spending $10,000
The category bar says Funded (because it is funded this month), it is mostly green, but it has a red section.
So, my question is: in order to trust my YNAB numbers, should I assign $1,000 in the present in order to cover that overspending in the past? Or was that already managed somehow?
The past overspending was already covered. Since you talk of red I imagine it means the category with the overspent showed some red in the Available column. If that is true, then the overspending was automatically covered from Ready To Assign the next month. This means your Ready To Assign was $1,000 smaller than it would have been without the overspending before you assigned it.
Thanks a lot for the reply!
Actually, the available column showed yellow in October and November (because the overspending was in credit card, I guess).
So the overspending was automatically covered from Ready To Assign the next month.... that makes sense! It is what I've read, and that would explain why my budget seems to be aligned with my actual accounts.
Thank you everyone for all your help! Unfortunately, it seems I am still missing how to solve this.
Move Light Sound Life that seems to be the problem: making a credit card payment with more money than available in the category, causing cash overspending.
How do I solve it? I don't understand. I see $1,000 overspending in a spending category (showing some red). So, I would assume that means that I must assign $1,000 in the present time (Jan). If I do it, I will see $1,000 in the available column,
But then, when I switch to the next month view (Feb), I still see that same $1,000 in the available column. And (also in Feb), if I move those $1,000 to another category, the overspending comes back.
So, it seems that when I try to move money to cover the overspending, YNAB acts like that money should stay there "available" forever?
What am I missing? Marisa ?
TLDR: I can't solve an overspending even if I try!
Tan Piranha said:
I don't understand. I see $1,000 overspending in a spending category (showing some red). So, I would assume that means that I must assign $1,000 in the present time (Jan). If I do it, I will see $1,000 in the available column,
Neither do I, unless you're confused about the columns in YNAB. Maybe a screenshot would help. Black out personal info.
If you have -$1000 available in a category and you cover that overspending, the available should equal $0.
However, in order to "cover" the overspending, you had to add $1000 to the category, which is reflected in the Assigned column.
Here's the category math: Positive Available from last month + Assigned + Activity = Available.
So, in your case, I would expect a category that shows negative $1000 to look like this before you fix it:
$0 Assigned +(-$1000 Activity) = (-$1000 Available)
After you fix the overspending:
$1000 Assigned +(-$1000 Activity) = $0 Available
Now, if it's credit overspending (you said it's red, so that's unlikely unless you've got Toolkit settings selected, but let's learn here) - if it's credit overspending, then those transactions become budgeted spending on your credit card, which makes the $1000 fly up and sit in your CC Payment category so that you'll be ready to pay off your budgeted purchase.
Does any of that help? I suspect you're on the float, so it would be good to look up how to deal with that. I do it in an unorthodox way, but you would need to understand these concepts first:
YNAB math of columns
YNAB math of month turn - cash overspending
YNAB math of month turn - credit overspending
YNAB credit card mechanics - budgeted vs. unbudgeted spending; paying down debt; floating debt
Move Light Sound Life said:
Please pardon my rant.
Thanks a lot for the ideas! No worries, I understand. The behavior of the target is not intuitive. Actually, if I delete the target -as you suggest-, the category overspending disappears.
you need to check if the available amount is the same but opposite sign as your negative credit card account working balance. If not, you need to assign money directly to this category to get those equal.
Well, this is the problem. It is such a noob mistake that I am embarrassed! It is worrisome how can one do everything wrong when you think you are doing it ok.
This is what (I think) happened, and what I will do to solve it. I share this so we all can learn one more weird mistake that people can make. And also to validate my solution, if anyone would be so kind to check it.
- I created a "by date" target (July 15th) for a category ("Home decor").
- I continued spending from "Home Decor" past July 15th, sometimes assigning less than what I was spending. I remember thinking "I will fix this next month", but I did not really understand how credit card debt operated.
- Since I had a "by date" target in a category with significant overspending ("Home decor"), and the "by date" target displays cumulated overspending , I was fortunate enough to see this red flag, which alerted me something was wrong.
- But, at the beginning, I thought this was a problem in the "Home decor" category, since the red color was there, right? Wasn't it obvious? :)
- After reading all your messages, I started remembering: I created debt at some point in the past... but I don't have debt in my credit cards... how is that possible? how was that fixed?
- Now I realize I missed the number 1 rule when working with credit cards in YNAB. I was making credit card payments (several months) for more than what I had available in the Credit Card Payment category, due to the "Home decor" category, but also due to several other minor mistakes that I didn't notice until now. I never checked that "available for payment" were equal to "working balance" for my credit cards. I just paid them.
So, below you can see attached... my credit cards working balance (total: $2.248.838) and my available for payment (same order, total: $1.012.992), therefore a gap of $1.235.846 which I will solve by assigning directly to the Credit Card Payments categories. Does this solution make sense?
Again, thank you all for your valuable time and availability to help me.