Moving Negative Balance Forward

Hello all, I am a newer YNAB user, and am figuring it out for the most part. I have read through some threads and understand that negative balances do not and will not, at least in the foreseeable future, be able to automatically roll over to the next month. My question is not to debate that but ask help in a solution. Here's the problem:

My husband's regular paychecks are placed into YNAB, but his non-regular and travel checks are his to spend on his hobby. He likes to keep those checks as checks or cash until he is ready to spend the money (this has worked for us for over 20 years, no plans to change it now). I pay for what he needs with a credit card then take his check or cash to the bank. Sometimes it takes a few weeks to get to the bank as happened last month and the negative balance stayed in March. My credit card is not due until the beginning of May. My question is how do I move the negative balance  forward until I have a chance to get to the bank? Do you just re-date the spending and make a memo to say when you really spent it? Do you go back to March and cover it when you actually put the money in the bank? The solutions I read all seemed very cumbersome for this problem. We have the money, just not where it can cover the cc immediately. 

I just don't want anything to get missed, as almost happed recently. I don't like not adding the expense to my YNAB account because then my cc will be off. 

Thanks for any help.

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  • For the cash, create a cash account in YNAB to contain the cash. The checks should be entered when they are deposited.

    He should not be spending money that isn't available to the budget, so get the checks deposited first. Until the money is in the account, those checks are worth about the same as a piece of paper.

    Not sure why anyone would want to sit on money that's going to the bank anyway. It's not earning any interest.

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  • nolesrule I don't want to change what has worked for a very long time. I am not new to handling my money or budgeting, I'm new to YNAB and am trying to make a problem better. 

    My husband asks for very few things in life. He likes clean clothes, drip coffee, and his comfy chair. He does not even really care if there is food available, he's quite easy to please, so no, I'm not going to ask him to change how he handles his extra checks.

    I could add a cash account, but I try to keep this money as separate as possible from our regular income. The only reason I am asking for a solution is to keep my cc balance accurate within YNAB.  We have the money, just not where it is easily accessible.  And as for the interest, it is not worth the bother for this situation.

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

      Gold Rhythm You asked how to do it in YNAB. I told you how to do it in YNAB. YNAB is first and foremost a very specific budgeting method-- a cash allocation budget based on the envelope budgeting system-- and the software is designed to follow the method. It's not designed  for playing catch up. It's designed for having money before you spend it.

      If you want to keep it separate, then keep it separate. Keep it out of the budget entirely. Separate bank account, separate credit card.

      If you try to continue doing it your way, you are going to struggle using YNAB.

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 6 mths ago
      • 2
      • Reported - view

      Gold Rhythm Just because something has worked for a long time doesn't mean it can't be improved on. If you are otherwise good with handling your money and budgeting (i.e. not worried about being tempted to "borrow" it just because it's available), then immediately depositing husband's income and inflowing it to the Husband's Hobby category to sit and wait for him to have a need for it, instead of sitting in a drawer waiting to be deposited, should be a minor tweak to the system, not a major upheaval. 

      Reply Like 2
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 2
      • Reported - view

      Gold Rhythm Like your husband, I hate change. You can ask my wife. But I'll be blunt. Sometimes you need to get over it for the betterment of everyone involved. This is so minor as to be ridiculous. Just deposit the money as soon as it's received and the problem is solved.

      All systems work fine until they don't. Lose some cash or one of the checks, and let's see how easy it is to fix the budget or pay back the credit card. The cash won't be replaced. The checks will, but how long will it take? Will a new check be issued in time for you to deposit it to pay the credit card?

      Don't spend the money until you really have the money. If it's not in YNAB the money can't be given a job, and you can't spend money accurately if it doesn't have a job.

      Reply Like 2
  • Vibrant and nolesrule , you are correct, change is difficult! You both have given me ideas to think about. I think my husband really likes to see the cold, hard cash he has worked for. 

    I understand the philosophy of YNAB, that is why I joined as it appeals to me and my money philosophy. I certainly don't want to have a monthly struggle, in any area, and this is a struggle. 

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  • Gold Rhythm Do you use a bank that has a phone app that allows for remote deposit?* If so, perhaps what you could do is continue holding onto the checks until you are ready to make the purchases, and do mobile deposits at the same time as you make the purchases. That way, you could enter it as income in YNAB and then immediately do a transaction where you spend that income.

    *I bank with First Republic and, on a less frequent basis, Bank of America, and both allow for mobile deposit. It takes about 60 seconds to snap a photo of both sides of a check and upload it to the app, and the check is usually cleared within a single business day. I didn't realize this was even possible until very recently, and I've never gone back to the old way since!

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  • This sounds like the same basic problem as I have with work expenses.  For myself, I have a Work Expense category where I put all those charges, and it goes negative when I travel for work.  I like this as it is a big red flag to ensure I don't forget about it.  Those expenses are going to get repaid, it just won't happen til a few weeks after the trip, which sometimes drags into a new month.  What I do in that case is fill it in with money from my buffer at the end of the previous month, and then reverse that in the next month.  Then I wait til I get paid and transfer the money to Work Expense.  This is a change from how YNAB used to work in previous versions, making it more difficult to run negative balances, which is understandable given the overall YNAB philosophy.  In other words, the inconvenience is "by design", but if you really need to do it, you can work around it.  IMHO, the bottom line is that you make it work for your needs, given you understand the reason why it was designed the way it was. 

    Reply Like 1
      • xgirlmama
      • Purple_Griffin
      • 6 mths ago
      • Reported - view

      JCadd ah, this is helpful, thank you. My problem is that my work expenses can sometime exceed my buffer. I'm working on that, but it will take time. 

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

      xgirlmama If you put reimbursible expenses on a CC and are paid back within 30 days, your "buffer" should not be affected at all. (I also replied to you on another thread.)

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  • You're complicating things by treating this money as "special" and probably increasing your CC debt to boot! I mean look at the situation when the dust settles (assume your CC Payment category matches the account balance to start with for ease of illustration):

    • Your CC account is larger because of the work expense, but the CC Payment category remains the same. So now you cannot afford to pay the entire CC bill.
    • Husband wants to spend on the Hobby, so this amount of money has to wind up in the Hobby category to allow that.
    • In other words, the bottom line is that your husband's hobby is being funded by an increase in CC debt.

    If you don't want to increase debt, you'll have to budget "normal" money to the CC Payment category (enabling a full payment). That's cool if you do that, but a bit convoluted -- why not just budget that "normal" money to the Hobby to start with? This lets the reimbursement money go back to the CC Payment category (avoiding the debt increase).

    Here's are the "normal" reimbursement budget workflows (which differ in whether interaction with the CC Payment category is automatic or manual):

    • Pre-fund the Work Expense category with your money (e.g., part of an Emergency fund) so any interaction with the CC Payment category is automatic. (I.e., nothing to do in the budget, just enter the inflow when you make the deposit.) These funds are obviously available to reallocate back for use in an emergency if no reimbursement is pending. (I'd make a Goal for the pre-fund amount so you don't forget where the "we're square" point is.)
    • Let the Work Expense category go negative. If the Work Expense category ever goes positive, just move that money to the CC Payment category.

    (The transaction is always categorized back to the Work Expense category in either case.)

    Simple, right? Assuming you budget for the Hobby as a normal, typical expense, things are pretty easy.

    However, if you insist on your current practice (i.e., debt growth), here's what I suggest:

    • Categorize the reimbursements as Inflow:To Be Budgeted and immediately budget that money to the Hobby category.
    • You still have the little issue of increased CC debt, unfortunately. You'll have to budget for that out of normal money directly to the CC Payment category before the bill is due.
    • The timing of the reimbursement deposit only impacts the Hobby spending. Again, the timing of the separate debt reduction is totally up to you.

    As I said, I would switch to making the Hobby a normal expense as it's much easier to see what's going on. Your budget, however, so good luck with whatever you decide!

    Reply Like 1
  • Another option would be to add a second cash account and place his hobby income in there. Treat the uncashed checks as if they were cash. If you cash the check later and deposit the money in a bank account then treat it as a transfer from the cash account to the checking account.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 6 mths ago
      • 1
      • Reported - view

      Navy Blue Case Why would you do that?! It then makes your budget think you have that money available to spend in cash when you absolutely cannot spend it until it goes to the bank/gets cashed. Don't put money in your budget that isn't really available!

      Reply Like 1
      • kevman479
      • kevman479
      • 6 mths ago
      • Reported - view

      bevocat I do that. I have two to three checks a month that gets put into an un-cashed check account until I go to the bank. Then it is a transfer from un-cashed to my checking account. I see it as no different then a savings account. my local savings account is not accessible until I go into the bank. (it is not accessible on line or with a card, I didn't want it too easy to get to.) Oh, but I don't budget it until next month so maybe that is the difference.  

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      • Peter
      • Professional Designer, Web Developer
      • lasty
      • 6 mths ago
      • Reported - view

      kevman479 what do you do if a check bounces?

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      • kevman479
      • kevman479
      • 6 mths ago
      • Reported - view

      Peter Well that is part of what I met by it probably only works because my wife and I do only live on last months income. We also have four and a half months of our six month income replacement so we could cover any problems that arise. We also don't count on them to live off of. So  if any would bounce I would have time to recover.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 4
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      kevman479 Not a fan of "uncashed check" account. The money still belongs to the checkwriter until it's depsosited, and that's how it's different from a savings account.

      For all you people sitting on checks, just get a bank with mobile deposit and use it.

      Reply Like 4
      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • 2
      • Reported - view
      Navy Blue Case said:
      Another option would be to add a second cash account and place his hobby income in there.

      The effect on the budget is identical to simply recording the deposit in the checking account prior to the actual deposit. The latter is also the simpler approach.

      In either case, the budget is overstated relative to the cash you hold. If this error is "small" relative to actual cash in hand, you can realistically ignore it. It's a personal call what "small" means.

      I record my mobile/photo deposits immediately in YNAB, but those funds are not available to actually spend for a few days. This is the identical situation (budget is overstated in total for a few days), but I don't sweat it, because there's enough real cash available to meet my needs.

      Reply Like 2
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  • The idea of having a separate cash or tracking account in YNAB associated with a separate savings account at the bank is something to consider. My bank does offer mobile deposit. I think combining the two may work out in our situation. If not, as  nolesrule mentioned, maybe I'll just keep it completely separate from everything else and not associated with YNAB. 

    There are many thoughts on this, and all have some good points. For us, we've never bounced a check and we pay our cc off each month, so I'm not increasing our debt and really not worried about check bouncing. Mine was simply a logistical problem. Our bank is not just around the corner, at a minimum it takes 2 hrs from my day to drive there and back. If I've already cashed the check I still have to drive to the bank to deposit the cash. Which is what created the original problem of I didn't deposit the money until April and I spent it in March, however the cc isn't due until May. 

    Currently I feel that I need to reconcile my accounts at the end of the month and again when the cc is actually due so that I don't miss any transactions. I do keep a buffer available, but it seems like a lot of back and forth movement. 

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  • Gold Rhythm said:
    For us, we've never bounced a check and we pay our cc off each month, so I'm not increasing our debt and really not worried about check bouncing. Mine was simply a logistical problem. Our bank is not just around the corner, at a minimum it takes 2 hrs from my day to drive there and back. If I've already cashed the check I still have to drive to the bank to deposit the cash. Which is what created the original problem of I didn't deposit the money until April and I spent it in March, however the cc isn't due until May. 

     Your cash flow may be okay, but it's the allocation that's screwed up. You are paying for work expenses on a CC, but when the money comes back from the work expenses, you are not allocating that money to pay back the CC. Instead, you are using the money as spending money. If all of the money ends up coming back into the budget via deposit, that's fine, because it's fungible (though you still have to manage the CC payment category). But if some of the money never makes it back into the budget, then you are essentially taking cash advances from the credit card, and it's a draw on your budget. That;'s what you need to watch out for.

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