Overspending

Can someone explain me this situation? My head just can not process that... Lol 

So I overspent this month big time. I spent money on my visa and it's showing in YNAB that I have money (from my checking account) to cover that spending. I get that... but in couple of days I have got debt on my checking and it still shows under Visa that I have money "put aside" to cover that spending. How come sonce I don't have them... 

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  • I'm not sure there is quite enough information here to sort out your issue.

    What categories did you "overspend" in, and were they funded before you added the transactions that put you over the edge? Generally speaking, if you have spent more than is available in a category using a credit card, it will show up as as orange with a negative balance in the category.

    It can get complicated if you apply transactions to a single category that are both credit and checking based transactions. I have noticed that sometimes depending on the order of the spending, YNAB doesn't recognize that I would want to prioritize the spending from the checking account, and allow the credit card purchases to be over spent.

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  • Do you have any red categories? Is the To Be Budgeted value red/negative?

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  • I don't how to explain that... Let's say I use my Visa for $300... It shows in Visa that I have $300 to cover that spending (from checking where I had $400). Then after couple of days I made some purchase ($300) straight from checking. So at that point I have only $100 on my checking account and not enough to cover my Visa... But under Visa account it's showing (in green) that I have that $300 to cover it....

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      • dakinemaui
      • dakinemaui
      • 3 wk ago
      • 2
      • Best Answer
      • Reported - view

      Spring Green Projector If the only cash you have is in checking, then there would only be $100 outside of the Visa Payment category, so assume it's all in Groceries. If you then spent $300 on Groceries, there would be -$200 (negative and red). Red signifies you implicitly stole money from some other category, so you need to move $200 from some green category to reflect that reality.

      Another possibility is that you have a savings account, which is also part of the funds in the budget. If you don't have any red categories (or a red To Be Budgeted), this is probably the case.

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    • Spring Green Projector Yeah, so it sounds like what I mentioned above - YNAB does not know how to prioritize credit card spending vs checking spending in terms of over spending on a time line.

      So the order in which you enter transactions will determine what it prioritizes.

      So if you put $300 on the visa for groceries on the 1st it is going to take the $300 from the category of groceries and move it up to the visa payment category.

      But then on the 15th if you put $300 in groceries on your debit card directly from your checking account, it is going to turn the grocery category red because YNAB thinks you don't have enough available because you already "spent" the $300 you had budgeted and according to YNAB, it moved it to the CC category ready for payment.

      In order to correct this, you will need to move the $300 down from the CC payment category into the red category (groceries for our example) to cover the money from your checking account.

      When you are fully aware you are taking on debt, moving the funds from the CC payment category at the top down to the over spent category is the way to eliminate the red category. If the category is only orange, which indicates over spending on a credit card, then it can be ignored, and it will disappear at the end of the month, and the category will be at zero on the first of the following month. The only place you will see the debt listed will be in the total balance on the left hand side of the screen with the accounts, and at the top of the account screen for that credit card.

      Hope this helps a little bit.

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 3 wk ago
      • 1
      • Reported - view

      farfromtheusual this is not exactly correct. When cash and credit spending happen in the SAME category, cash spending is prioritized, including automatically taking money back from the credit card payment category to cover the cash overspending. The order the transactions happened in doesn't matter.

      If I spent $300 budgeted dollars with my CC on groceries and then spent $300 unbudgeted dollars with my debit card on shoes, the CC payment category would be unchanged and the Shoes category would be red negative and your fix would be correct.

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    • Vibrant   I haven't had that experience. When I have used my credit card (first) and written a check (later) that were both attributed to the same category, knowing fully that my credit card would be over spent, and the check would be cleared from my bank account, the category has gone red, not orange for credit card over spending. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • 1
      • Reported - view

      farfromtheusual This would only happen if the amount of the overspending exceeded the amount of the credit card charge.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 wk ago
      • Reported - view

      farfromtheusual The reason the cash is prioritized is because once you spend the cash, you no longer have the money reserved in your cash account to make the credit card payment against the credit card spending.

      For example, simple scenario of $200 in the bank. $200 in a single category. Spend $150 on credit card. You have a $150 balance on the card but still have $200 in the bank. CC payment category shows $150 reserved for payment.  Now you spend $100 of the money in the bank in that category. The category is overspent by $50. You have a $150 card balance but only $100 in the bank. You can't pay the full amount. so YNAB reduces the amount that you can pay to the credit card buy the amount of the overspending, so you now only have $100 reserved for payment. This is how the CC payment categories work with a single spending category in isolation.

      Now, if it were 2 different categories, you'd have a different problem. Because the money would be gone due to the cash overspending. So you'd have to WAM that overspend from somewhere, and the optimal choice would be the CC payment category. You end up in the same place.... assuming you are following rule 3.

      On the larger scale of a full budget, it's the same idea, but people have the wiggle room to let the cash overspending roll over.

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  • The reason you have a green $300 under Visa is because at the time you made the Visa purchase, you had enough in checking to cover it. 

    But presumably because you overspent your checking account now, you should have a red or orange number somewhere else, whatever category you overspent in. If not, check your transactions to see if the new debit purchase is there. Then label it with a category. That category will probably now have an orange or red number in your budget.

    There's a green $300 under Visa because your budget is still assuming you plan to pay the $300 to your credit card. If you can't do that now, you will have to move some money from that green Visa category to cover wherever you overspent, and run a balance on your Visa card until you have enough money to pay it back again.

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