Assigning written checks to the correct monthly budget

I am new to YNAB and I apologize if this falls under the category...you just haven't got your head wrapped around it all yet.

Here is my situation: 

  1. I have a bill due on April 1st.  I have gone in and budgeted money (earned in March) to be used for that payment in April. 
  2. I write my check on March 27th to ensure it is there in time.
  3. After writing the check I add a transaction, select the payee, category, memo and outflow amount.
  4. Once the check is cashed I mark it as cleared.

My issue:

Because I wrote the check and assigned it a payee on the 27th YNAB is trying to assign the payment to my my March budget.  Now because I started YNAB just this past month (Middle of March) I never assigned a budget for that payment in March.

I can fool YNAB by changing the transaction date to state it was entered on the 1st of April but that just doesn't seem the right thing to do.

What am I missing?

Thank you community!

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  • Enter for the 1st of April, since that is when your payment is due and will be applied and make a note in the memo that you sent cheque #123 to Payee Mar 27th.

    The money doesn't leave your account until the cheque is cashed on the other end so reflecting it in April will not throw anything off.

    Like 1
  • Going forward, I would adjust your budget. If I'm writing a check on April 27th, I want the money in my budget by April 27th. I don't care that I might write "May Rent" on the check. I do this for my mortgage. It's due on the 1st, but I do a bank transfer, so I like to give myself a little wiggle room in case anything goes wrong. So the automatic transfer is set for the 25th. Therefore, the category in my budget says "Mortgage (25th-Auto)" and I have a note in the inspector that says the due date is the first and it auto drafts on the 25th. I know that it's actually the May 1st payment that I'm saving for in April and it has to be fully budgeted by the 25th for the auto transfer. 

    Like 4
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 1 yr ago
      • 3
      • Reported - view

      This. In YNAB, there is no payment for Month X. There is only the month the payment was made in. And you need the money in the category when you make the payment.

      Like 3
  • Another vote for treating this as a March outflow (since that's when the money leaves your control).

    Like 3
    • JoeDid
    • Remember: It is To Laugh
    • Purple_rain
    • 1 yr ago
    • 5
    • Reported - view

    Enter the check in YNAB with the March date you write it, with "April rent" in the memo field. It should reflect the reality: you committed the funds in March, for April's rent. It seems you'll be doing this every month, and it will be a good practice.

    If you needed to put stop payment on one of those checks that might get lost somewhere along the way, you'll need to provide the bank with the payee, amount, and date of the check. If YNAB says you wrote it on the first and you report it that way, it can cause a problem

    Like 5
  • Perhaps I'm beating a dead horse here, but I'm surprised that the general consensus is to log the payment by cheque the date you write it, not the date it's due. 

    If you gave your landlord 12 post-dated cheques for a year of rent at $1,000 monthly, you are not sending them $12,000 all at once. They would cash the appropriate cheque on the 1st of each month and your obligation is to have $1,000 available by the 1st. Your landlord would have no idea if you had the whole year saved up or not, all that matters to them is that they get their monthly rent by the 1st.

    When you schedule auto-payments for your $60 cell phone bill that's due on the 25th of every month, you don't send your mobile provider $720 to cover it for the year. You are obligated to provide them with $60 per month. 

    If you owe a friend $20, you don't say you paid them back the minute money is in your possession, unless you paid them the same day. The day you pay them back is the day when you no longer owe them, not the day you committed the money.

    If you have $400 set aside for groceries, do you say you've spent $400 on food? You have that amount set aside to cover your monthly food costs, that's it.

    In all scenarios you have committed the funds, not spent them. When you write a cheque on Mar 27th for the Apr 1st mortgage, it will be cashed on the 1st as indicated by the date on the cheque. You commited the money as of the 27th, but it isn't actually moved until the 1st. 

    If you start using dates that don't correspond to an actual transaction, you'll lose track. It doesn't matter when you decide to commit the funds - it matters when the money needs to be at its destination.

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    • nolesrule
    • Stealing From the Future fix is an improvement but is incomplete....
    • nolesrule
    • 1 yr ago
    • 4
    • Reported - view
    Mango Box said:
    If you gave your landlord 12 post-dated cheques for a year of rent at $1,000 monthly, you are not sending them $12,000 all at once.

     Yes you are. There is no legal obligation to honor the date on a post-dated check. A check can be cashed at any time. Which kinda defeats the entire premise of the rest of your argument.

     

    The point is to schedule the date of the transaction for the earliest date the money could possibly leave your account, and that is the date you relinquish control of the money. Planning to do something has not committed the money.

    Like 4
  • Mango Box said:
    Perhaps I'm beating a dead horse here, but I'm surprised that the general consensus is to log the payment by cheque the date you write it, not the date it's due. 

     I'm old enough that I used a written check sent via mail to pay all my bills in my early 20s. In fact when I was in 5th grade in the '80s I learned how to use a check register (there was a year long activity that involved having jobs like cleaning the blackboards or feeding the animals in the science room, filling out time cards, getting paid, having a bank account, and buying "things" like the ability to wear jeans on Friday). I always used the day I wrote the check as the "official" date of transaction in the register - you needed to have the most conservative view of your running balance so you didn't risk overdrawing your account.

    Like 8
    • jenmas Agree 100%, write a check on a particular date, it is committed on that date.  Why try to guess when the check will be processed and deducted from your checking account.  We used to call that floating a check.

      Like 4
  • Thank you everyone for taking the time to reply!  I've got some things to mull over as I continue to budget my money for sure.

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  • Mango Box said:
    You set aside money for a purpose = you commit it.

    Not as I think of it. Setting aside money is merely planning. When I give someone a check, then it's committed. That means there is no backing out (without penalty, at least).

    Like 2
      • jenmas
      • jenmas
      • 1 yr ago
      • 1
      • Reported - view

      dakinemaui I agree. I have $XX,XXXX.XX set aside for Income Replacement. I have not committed those funds really. What if I don't need Income Replacement ever? What if i decide that I need to move $500 to my vehicle repair category. It's allocated, but not committed.

      Like 1
  • jenmas said:
    you needed to have the most conservative view of your running balance so you didn't risk overdrawing your account

    And by extension to the modern usage with YNAB, accurate category balances reflective of the committed funds. Making spending or reallocation decisions with Available values that ignore those commitments is obviously less than desirable. 

    Like 1
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