New to Ynab - can't get my head around savings reconciliation
I have just started using Ynab, and I love it. BUT as I move to month 2, I cannot reconcile either on paper or in my head the gap between what my account balances are showing, and what there should be left for savings from month 1.
I put roughly $500 towards savings and true expenses in August. Come September, I budgeted my income to date - all fine. But then I looked at my current account balance and it was roughly $250 higher than it should be, according to Ynab. So after trying to figure it out, I gave up and did an automatic adjustment, meaning that Ynab thinks I have $250 still to "give jobs." I don't think I forgot any transactions as I was so excited about this app that I checked it about five times a day.
What I'm now concerned about is that the $500 I set aside in August has now disappeared - or maybe it hasn't - I have become so confused, that I have no idea if it's there or not. I have $1815 in all my current accounts (which are unlinked, as I'm not in the US) spread across three accounts. I have budgeted $1470 of that (as that is equal to the income that has come in this month to date ), and Ynab is urging me to budget another $250 of that b/c I did the automatic adjustment. But I'm not sure if that is actually "my" money or not..
Meanwhile, if I subtract $1470 from $1815, that comes to $350, $150 less than I had put towards savings in August. Still with me?!
So where has that $150 gone? I thought I had it last night - I had spent roughly $400 this month already, meaning my budget left to spend so far is $1000 approx. But then that would mean I have $800 in savings left over from August, would it not?
I'm just confused, and have stared at it all for so long that I wonder if I just need to start over. Any help much appreciated!
Breathe. You're learning this, you can work it out.
Check next month and for hidden categories. Basically the sum of all your categories should equal the sum of the account balances.
Have you created a category called Savings or some specific categories with savings purposes eg. car repairs or medical? Allocate budget to these as YNAB wants you to give every dollar a job in terms of the budget not just put it in an account.
In August, did you allocate those funds in savings to categories in your budget or just move them in your account?
1. Reconcile accounts, enduring your cleared account balances agree with the real world. (It's fine if the working balance in YNAB is different because you've entered transactions that have yet to hit the bank.)
2. Assuming there are no red categories or To Be Budgeted showing, every bit of the money in the budget is real. (You can peek at next month's header to verify no red was showing, as it would be shown in the Overspending line next to TBB.)
That principle is fundamental to YNAB. Money in the budget equals cash in accounts. Always.
I wonder if it was just the starting balance that was off in that account you adjusted.
Thank you for all the help / suggestions. I am going to take that "ghost" money or whatever it was as mine - I don't think it was a starting balance error as I went back to check, but I still have absolutely no idea where it came from. I think that the amount of savings in my current account is roughly correct once I get that $250 to play with.. After three evenings of staring at this, it is time to move on!
Magenta Network said:
I think that the amount of savings in my current account is roughly correct
The only amount of money in your YNAB current account that is "correct" is that of the real-world account, possibly adjusted for pending transactions (unknown to the bank).
If you are expecting some subset of your categories to total the amount in a particular account, don't. It's extra work to maintain that synchronization and frankly unnecessary. Read this for more details: