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!

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  • Move the extra wherever you would like!  Know that if you have goals set up this will turn the categor yellow which is not a problem, just something to know. 

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      • Bnabound
      • Who lives, who dies, who tells your story
      • bnabound
      • 4 mths ago
      • Reported - view

      satcook Thank you! I did notice that and I know it shouldn't but the yellow bugs me! 😄 I may just have to get used to it or just turn off the goal for that week!

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  • 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 Like 4
      • Bnabound
      • Who lives, who dies, who tells your story
      • bnabound
      • 4 mths ago
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      bret Thank you! I think the rollover idea has merit - it would be easier to do it that way and remove the goals. Especially for groceries, where I actually want to stick to the $40 limit to prove to myself that it's doable!

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  • 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 Like 4
      • Bnabound
      • Who lives, who dies, who tells your story
      • bnabound
      • 4 mths ago
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      Kombucha Kid Thank you so much for all your thoughts. I can see how it could be seen as overcomplicating thing (and heaven knows, I do overcomplicate things a lot in general!) but especially for groceries, I need to be fairly strict. That is less related to the need for budgeting than it is to keep my food expenses (and thus my food consumption) in check. It is, at this point, just another way to make myself accountable for the food I eat so that means more money spent on home-made meals and less spent on eating out (that category is limited, too, obvs).

      I think as time rolls on, this will become much clearer how it fits my needs - I'm lookign forward to that moment when my brain no longer hurts trying to figure this out :)

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  • You’ve got good advice on how to think about this. I would suggest not moving money out of groceries in your first month using YNAB. The odds you’ll just need to move it back are high. 

    Reply Like 5
      • Bnabound
      • Who lives, who dies, who tells your story
      • bnabound
      • 4 mths ago
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      WordTenor I shall follow your advice and leave things in there for the first month until it all gets clearer. Thank you so much for the reply!

      "I'm at your service, Sir!"

      Reply Like 1
    • WordTenor  Bnabound  I do a form of budgeting groceries by week, but there's always some weeks that are low and some that are high. I'd absolutely keep the $9 on hand for groceries, since a weekly average of $40 probably means that there will be a week where you need that money. If after a month (or few) you are consistently underspending your $40 target, that would be the time to adjust. (Unless of course you absolutely need that $9 in gas to get you to work or something) 

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      • WordTenor
      • A polymath, a pain in the ....
      • WordTenor
      • 4 mths ago
      • Reported - view

      Bnabound You will find good company here as a Hamilbudgeter.

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  • After reading the book, I posted links on another thread that parallel the book sections: https://support.youneedabudget.com/t/k9wcwn/ynab-book

    I'd recommend going over that content as soon as possible, wish I had read something like the book or links first, it would have made the transition smoother. The book took me two evenings after dinner to read, and the links are more condensed than the book content. 

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  • How's it going with the budget?

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  • Yes, it's that simple.  You can either leave it or move it into an underfunded category.
    Considering how new you are, I would probably move it to an underfunded category only if that's a priority category.  Something you simply must account for: rent, electric, phone, gas...
    But I would leave it until you have more knowledge about where your money goes.

    Reply Like 1
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