Still confused about "budgeted", "activity" and "available".

I've watched all the videos but I'm still confused about "budgeted", "activity" and "available". Can anyone explain it to me in a super easy way? Feeling dumb 馃槳

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    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 1 yr ago
    • 7
    • Reported - view

    Let's start at the beginning, ignoring your screenshot for a moment. 

    "Budgeted" = this is how much you've added to the category since the start of the month. Note that you can add a negative amount to a category--in other words, you can take out of a category more than you've put in within a month. If you use the move money tool to move money around your budget, this may happen automatically, which some people find confusing. The key is, this column shows exactly what you've added that month. That's it. 

    "Activity" = this shows what has happened to that category this month. Each spending transaction will produce negative activity, inflows such as returns or reimbursements recorded directly to the category will produce positive activity. This number is added to "Budgeted." Note that most of the time, Activity will be negative. Recall your 6th grade math--adding a negative is subtraction. But since this number can  be positive, and budgeted can be negative, it's more consistent to  recognize that it's all a sum.

    "Available" = this shows the sum of "Budgeted," "Activity," and whatever was available at the end of the previous month. 

    So if you have $100 left over last month, and you budget $100 and spend $50, producing a -$50 activity, the available will be:

    $100 (last month) + $100 (budget column this month) + -$50 (activity column this month ) = $150. 

    For non-credit card categories, this math is very straightforward. It's just an envelope--something may have been in it last month, and this month, you put some money in, and maybe took some other money out, and now there's some left. 

    Now, let's think about the card payment categories. Just like any other category, you can also budget to the credit card payment category, and it will cause the available to go up. You can move money out of the credit card payment category, and it will cause the budgeted column to go down. 

    There are only two differences for the card categories, and they have to do with how transactions get into "available. YNAB moves money to the category as you do budgeted spending  in other categories. This move affects the "available" column, as these movements happen as behind-the-scenes transactions. So if you spend $50 on groceries, groceries will show -$50 activity, and your card will show +$50 activity. That +$50 activity will cause the "available" in the card category to go up, just like it would in any other category. 

    Then, when you record a payment, which is a transfer between accounts, this is the only way to directly affect the "available" in that category. This will hit as a negative amount, reducing the "available" column. 

    However. 

    The math on these columns is exactly the same as in any other category. The amount available to pay your card is the sum of available last month + budget + available. The only difference is that you don't spend from the credit card payment category directly. You affect the available through doing budgeted spending in other categories, and by making the transfer/payments to your card. The end result is an available that shows you, just like any other category, how much money in your budget is reserved for the specific purpose of paying your credit card. And just like any other category, if you choose to spend more than is there (in other words, make a payment that is larger than that amount), that category will show overspent. 

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    • WordTenor Thanks for the super thorough and helpful response! I'm still a little confused by the concept of "budget". You wrote "Budgeted" = this is how much you've added to the category since the start of the month." Do you mean any payment that I've made to my card during the month? 

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    • Navy Blue Falcon No, Budgeted is you putting a number in the first column in the budget screen. A payment is a transaction which would show up in the Activity (middle) column.

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      Navy Blue Falcon The key to the card payment category is that bolded line. Just like any other category, the card payment shows you how much is reserved to pay the card.  It doesn鈥檛 tell you how big of a payment to make, and it doesn鈥檛 tell you how much your credit card company thinks you owe.  What it shows is how much money is set aside. Just like any other category, you can add money to that category to set money aside   

       Unlike other categories, the software is doing some of the setting aside for you,  and unlike other categories you can鈥檛 categorize a transaction to that category. Your transaction happens only when you make a payment .  That鈥檚 the only difference; everything else is the same. 

      Like 1
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 1 yr ago
      • Reported - view

      also I made the same 鈥渁vailable鈥 鈥渁ctivity鈥 switch throughout this paragraph. A correction: 

      There are only two differences for the card categories, and they have to do with how transactions get into "activity.鈥 YNAB moves money to the category as you do budgeted spending  in other categories. This move affects the "activity" column, as these movements happen as behind-the-scenes transactions. So if you spend $50 on groceries, groceries will show -$50 activity, and your card will show +$50 activity. That +$50 activity will cause the "available" in the card category to go up, just like it would in any other category. 

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  • WordTenor said:
    available last month + budget + available activity

     Otherwise an excellent summary. 馃憢

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 1 yr ago
      • 1
      • Reported - view

      dakinemaui This is why companies hire linguists when coming up with product terminology. I get why 鈥渂alance鈥 was confusing to some, but 鈥渁ctivity鈥 and 鈥渁vailable鈥 are just phonologically designed to get tangled and I wish YNAB had thought about that when they changed the name. Thanks for the catch !

      Like 1
    • WordTenor I'm not a fan of Available either. When every other financial apps and even the banks themselves use "balance" -- and so does YNAB for accounts -- it causes confusion when trying to be different. Perhaps they were trying to get away from Budgeted and Balance being too similar? :-)

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      • MXMOM
      • MXMOM
      • 1 yr ago
      • Reported - view

      dakinemaui but in the Budget screen, Balance would not be the right term. Available is correct as that is the amount available to spend on this category. And with the credit card process, Available in the budget does not always equal the balance on the account. 

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    • MXMOM I'm not saying it's perfect, only that it worked for years being called "balance" without issue. Now we have continual posts expressing confusion over the non-standard terminology. My observation is simply that greater confusion is not better.

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    • MXMOM 

      MXMOM said:
      Available is correct as that is the amount available to spend on this category

      The target market thinks of these categories as mini virtual accounts, so balance is closer to their current understanding and therefore a better choice. 馃檪

      However, Available is what we have, which we both know will never change. It's just one more thing a new user has to come to understand. No, I don't think that should be a stretch, but I do see the posts keep coming.

      Like 1
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 1 yr ago
      • 3
      • Reported - view

      dakinemaui The use of 鈥渁vailable鈥 in the credit card categories is deeply confusing to people who don鈥檛 understand the principle that the budget sets aside money for the card payment. It was a mistake to set this up this way. I think if they hadn鈥檛 pushed for a Jan 2016 release, they鈥檇 have done one more round on the CC handling. It鈥檚 a shame. 

      Like 3
  • MXMOM said:
    Available is correct

    Ironically, given the seemingly opposite connotation, "Reserved" is also correct, and I suspect it would be far less confusing.

    Like 1
  • If I may attempt to clarify WordTenor's clarifications;

          鈥渂udget is how much you鈥檝e added鈥︹

          鈥渁ctivity is what happened鈥 .鈥

     

    When adding numbers, and someone says something has 鈥渉appened鈥 to the equation, the most likely meaning is that something has been added or subtracted. And, as was notably pointed out, those of us who weren鈥檛 napping in 6th grade learned that 鈥渁dding a negative is subtraction.鈥 Ergo, making something 鈥渉appen鈥 in addition equals adding. Therefore the clarification was that

           budget = adding    (and) 

           activity = adding.

    This, at best, is a tautology; but at worst it鈥檚 merely confusing.

     

    I believe WordTenor was trying to say,

         Budget = a spending goal (as in 鈥渁n objective鈥); hoped for result expressed as a number

         Activity = amount spent or saved (as in 鈥淚 frittered away $50  on financial software鈥)

         Available = Budget + Activity + whatever鈥檚 left from last month; aka 鈥渞emainder鈥 (for those who weren鈥檛 napping in first grade).

     

    Someday I hope to actually understand what YNAB means by Budget, Goal and Available. You might find the answers at this site helpful: https://support.youneedabudget.com/t/q5rsln/credit-cards-budgeted-vs-activity-vs-available

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    • Beige Sloth 

      Activity is not how much you saved. It's how much you spent (or got refunded). 

      Budgeted is how much you saved (set aside) for that category, this month. 

      It just so happens that YNAB automatically sets aside money for your CC payment by moving the amount of budgeted purchase activity from the category of the activity to the CC payment category.

      The Goal function on YNAB exists to remind you what you wanted to budget when you get your money. 

      Available is what you base your spending decisions on (in CC land this is the decision of how much to pay the card), as it is the total result of previous months' activity/budgeting plus this month's. 

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      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • 1
      • Reported - view

      Beige Sloth Not quite.

      Activity is the amount put into or taken out via transactions (spent or refunded). Budgeted is what the user puts into (or takes out if negative) the category as part of their definition/refinement of the "plan" (a.k.a., "budget").

      In the context of credit card transactions, spending results in activity in 2 categories, assuming a budgeted purchase. The spending category (e.g., Clothing) has an outflow transaction and the CC Payment category has an inflow transaction. They net to $0 because you haven't lost or gained any cash, and the budget always ties to your total cash on hand.

      The incremental amount "saved" is actually identical to the budget value. It's what you set aside toward eventual spending. "Saving" is merely delayed spending. The Available amount is the total (accumulation) that is currently reserved (a.k.a., "saved") toward that particular purpose.

      Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
      • 1
      • Reported - view

      Beige Sloth 

      Budgeted is simply the movement of money (To Be Budgeted to category or category to category) on the budget screen within the current month.

      Activity is the movement of money through transactions within the current month.

      A Goal is a  recommendation/reminder to budget a calculated amount of money in a category.
       

      Available is how much money you have reserved to spend for a particular category. Or put another way, it's how much you have accumulated/saved for that category. Therefore what is Available now is the sum of what was Available at the end of last month, how much you have added or removed from the category this month through Budgeting fund, and how much you have added or removed from the category through your account transactions.

      Like 1
      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 4 mths ago
      • Reported - view

      Beige Sloth That was not what Word Tenor was trying to say at all. 

      Budgeted has nothing to do with a spending goal. It is how much of the total pot of money you have on hand that does not already have a job that you are giving a new job in this month. It results in an increase in the amount available. It changes by changing the amount directly. 

      Available is the amount of money which has wound up with a particular job. 

      Activity is the movement of money, as @nolesrule  said. It's about transactions. How much money moved in and out of this category this month due to spending that you did. 

      You are very correct that understanding that subtraction is the addition of negative numbers vastly simplifies things. So it becomes easy to express it instead as: 

      Budgeted: How much was added to the category through the budgeting process this month. 

      Activity: How much was added to the category via transactions this month. 

      Available: The sum of Available Last Month + Budgeted + Activity

      Naturally, any one of these numbers can end up being negative because you might have a net negative addition which is larger than the net positive addition.
       

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 4 mths ago
      • 1
      • Reported - view

      NB: I don't know why this post circles back on itself and were it not for the earnest attempt at an in-depth explanation here, I might assume this to be a spam post, so I'll be curious to see.

      Like 1
  • If someone disagrees with you, or points out a error in logic, that might make it "Spam" in some circles. But I submit that the fact that my post returned 5 responses with 5 different definitions supports my assertion that these words are not well defined, and therefore cannot be succinctly taught. My apologies for offending anyone with this opinion. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
      • 6
      • Reported - view

      Beige Sloth 5 responses with the same definitions worded differently to try to help you understand.

      Like 6
      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • Reported - view

      Beige Sloth Yes, the 5 responses all agree. Not to speak for WordTenor , but I suspect the spam suspicion was due to resurrecting a 7 month old thread as your very first post -- a common occurrence with spammers. Additionally, you linked relevant information without understanding it (also common with spammers). I was actually surprised it did not redirect to some other site. OTOH, your post took a fair bit of time to write, which is uncharacteristic of a spammer (as WT pointed out).

      Hopefully you understand the suspicion better now. On the flip side, we're happy to continue further on-topic discussions.

      Like
    • dakinemaui I am consolidating and editing all of the above definitions. They are not the same, but they all dance with commonality. This exercise is helping me. Perhaps my results will help someone else. This may take several hours. // My apologies, again, for accidentally emulating a spammer. I could post at the more recent version of this thread if you so advise. https://support.youneedabudget.com/t/q5rsln/credit-cards-budgeted-vs-activity-vs-available

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      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • Reported - view

      Beige Sloth That other thread is even older.

      Glad the responses were useful. Focus on "user typing" (Budgeted) vs. "transaction" (Activity) as the crux of the matter.

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      • WordTenor
      • I have the honor to be your obedient servant
      • WordTenor
      • 4 mths ago
      • Reported - view

      Beige Sloth Yes, as I pointed out, the length of the post indicated it probably wasn鈥檛 spam. And my apologies also; the link鈥檚 title was so close to this thread鈥檚 title that it looked like you鈥檇 linked to this thread from this thread so that looked weird. 
      We鈥檙e happy to help you understand. The CC machinations add a layer of complexity, but it is a slight additional layer if you understand the basics. Focus on those first. 

      Like
  • Dear members of this forum. Thank you for your patience. As a neophyte, I am dazed and confused. I have watched all 18 Starting Your YNAB Budget videos and a half-hour YouTube video, which was like trying to sip from a fire hose. Also,  there is as much information in the videos about the belief system than how to USE the system. They might consider HyperCard over the existing videos.

    According to the collective wisdom of this forum, in order to input data into the YNAB software, it is best to understand these four concepts: Budgeted, Goal, Activity and Available. That鈥檚 because, unlike other software, these four data points are highly interactive, and changing one will change another.

     

    鈥淏udgeted鈥 is a plan; how much you set aside for a category (rent, groceries) for each month. The budget always ties to your total cash on hand 鈥 the cash in your accounts. If the total pot of money you have on hand exceeds or doesn鈥檛 meet the amount budgeted, eg., if you spend less or more on groceries in a month than budgeted, this amount can be re-budgeted (re-applied, re-assigned) to another category. Summarily, 鈥淏udgeted鈥 is how much you add 鈥 how much you intend to spend 鈥 to a category this month.

     

    • Note: I find this definition: 鈥淏udgeted is simply the movement of money鈥 鈥 to be confusing, not because it is wrong, but because 鈥渕ovement of money鈥 is too close to the definition of Activity.

     

    The 鈥淕oal鈥 function on YNAB exists to remind you what you wanted to budget when you get your money; a  recommendation/reminder to budget a calculated amount of money in a category.

    • Note: From an operational standpoint (actual use) Goal seems to be a mysterious word-choice for 鈥淓nter Budget Here.鈥 Perhaps it has functions I have yet to discover. But at my stage, I simply can鈥檛 confirm that Goal can 鈥渞ecommend鈥 what I should budget, nor act as a reminder, which, to my mind, is a calendar notification. These could all be true.

     

    鈥淎ctivity鈥 is the amount put into or taken out via transactions; how much you spent (or got refunded); the movement of money via transactions with the current month. Summarily, activity is how much money moved in and out of a category during a month.

     

    鈥淎vailable鈥 could be called 鈥淩eserved.鈥 It is the total (or accumulation) that is currently reserved (a.k.a., "saved") toward a particular Budget line (your purpose). Available = remainder of money from last month 卤 activity 卤 budgeted. Summarily, Available is what鈥檚 left, the remainder, at the end of the month.

    • Note: I find this definition: 鈥渢he amount of money which has wound up with a particular job鈥 鈥 to also be confusing. Again, not because it is wrong, but because the word 鈥渏ob鈥 has well-established financial meaning, but not in this context; i.e., it does not tie back to any existing concept.

     

    Again, thank you for you patience and tutelage!

    -30-

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  • Beige Sloth said:
    鈥淏udgeted鈥 is how much you add 鈥 how much you intend to spend 鈥 to a category this month.

    It absolutely is how much you added during the planning process. It may or may not be how much you intend to spend this month. Frequently it's not, and these are known as True Expense categories. The idea is that money for outflows occurring less often than monthly (e.g., the yearly Amazon Prime membership fee) can be accumulated over multiple months leading up to the due date.

    Like 2
  • Beige Sloth said:
    I find this definition: 鈥淏udgeted is simply the movement of money鈥 鈥 to be confusing, not because it is wrong, but because 鈥渕ovement of money鈥 is too close to the definition of Activity.

    If you think of categories containing dollars, it makes complete sense to think of moving them from one category to another. If you click on the Available amount in any green category, the tool that is then displayed is the "Move Money" tool.

    Think of cash in paper envelopes (envelopes correspond to categories):

    • Budgeting: Take cash out of one envelope and move it to another. You still have all your cash.
    • Transaction: If you take cash out of one envelope and give it to a store, a transaction is the record of that money leaving (in this case) your possession. The total amount of cash you hold changes.
    Like 3
  • Beige Sloth said:
    I simply can鈥檛 confirm that Goal can 鈥渞ecommend鈥 what I should budget, nor act as a reminder

    As an example, if you create a monthly funding goal of $20, YNAB will turn that category yellow -- as a reminder -- until you add $20 to it with a budget entry. You can also click in that budget cell and click the Underfunded button on the right and YNAB will budget the amount defined in the goal for you.

    Perhaps for the time being, forget about Goals. They save a little typing and give you a visual indication that you had planned to add $X to it, but you can use YNAB effectively without ever using Goals.

    Like 2
    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 4 mths ago
    • 4
    • Reported - view
    Beige Sloth said:
    Also,  there is as much information in the videos about the belief system than how to USE the system.

     The reason for this is that the belief system, which you'll hear called "the method," is the framework for the software which was built. Without understanding the method, the software can seem a confusing mess; if you understand the method, why the software behaves as it does makes much more sense. I feel from you that's what you're experiencing. 

    The reason the word "job" is in my explanations is because it comes from the YNAB method. Rule 1 is called "Give Every Dollar a Job." Meaning, put it into a category according to its purpose. We usually call those purposes "jobs," coming out of that material, as shown here: 

    https://www.youneedabudget.com/the-four-rules/ 

    You say you've watched all the videos, but have you tried taking one of the webinars? Often, an in-person 20-minute class, watching someone work in real time, with others asking questions in real time, can help you reach the "a ha" moment much more quickly. Here is the link for those: https://www.youneedabudget.com/free-workshops/ 

    Like 4
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