Newbie here - how to handle being under budget?
Hello fellow YNABers!
I've just joined YNAB and my head is swimming with all the new info 😄, especially because it is a completely different mindset to what I've been used to so I'm still struggling with some bits.
The one I would appreciate your help with is as follows:
I've set up a category for each week of groceries and have set the budget to $40/week.
I've just completed my first week and I actually came in under budget (yeah, that won't last too long, I'm sure) and I'm now confused what to do with the amount left over.
Do I just move it to the future or to another category that's not yet fully funded? Is it that simple?
I've looked at next month and because I've been able to budget for it in advance my "week1 groceries" category is showing $49 ($40 from budgeting and the $9 left over from the previous week) and I obviously want to stick to the $40.
Would appreciate any help - thanks!
You should budget your money wherever you need it. 🙂
As you've noticed, extra (unspent) money in a category can accumulate and rollover into the following month. For some categories that's exactly what you'd want: If you have a vacation planned for this summer, you should probably set aside a little money each month from now until then.
For categories like groceries, perhaps you'd prefer to "sweep up" your unspent January money and apply it to other January categories. Alternatively, you could let that unspent money rollover into February, and then you probably won't need to budget as much money toward groceries in February. (And you could use those savings to boost other categories!) It all works out the same, it's a matter of personal preference. Go with whatever you find easiest and motivates you to achieve the best results!)Reply
First of all, I find that budgeting on a weekly instead of a monthly basis overcomplicates things. Once you get a full month ahead you'll find there's no need. I do understand that for something like groceries - which you purchase more or less on a schedule - it can be helpful to know exactly how much you have available to spend each week. A simpler way to do it would be to have one category for groceries, with a monthly funding goal of $172 (av. 4.3 weeks in a month * $40). You can write in the category title your weekly spending allowance, if that helps keep you on track. Keeping track of 4 (or more!) grocery categories adds extra layers of admin that will make you less likely to stick with the software.
If you're still working on getting a full month ahead I definitely recommend keeping the underspending in the original category. Having multiple grocery categories does make that more complicated.
But as to the issue of what to do with underspending IN GENERAL, I'd advise you to keep it in the grocery category until the end of the month. When I first started, I swept out all underspending at the end of the month from every category and treated that kind of like a bonus to myself. Now, I keep it in its category to cover any over spending that might occur in the future. There are different approaches to this - and it's largely a personal preference. I do find that I WAM less when I retain underspending in its original category to buffer against overspending.Reply