Manually scheduling transactions vs importing
Hi all, I'm new to using YNAB and so far I'm enjoying it, but I do have a question that I can't seem to find an appropriate answer for on the forums already. This question is twofold:
1. I started manually inputting recurring transactions into my accounts (mostly direct withdrawals i.e. next mortgage payment, etc). But since my account is linked, when the transactions actually appear on my account, will the fact that I manually inputted them cause any issues? Either doubling of the transaction or one transaction will be left dangling? Should I just not be manually inputting them? I do like this feature as I can see what's coming.
2. Right now my budget is showing in RED, which is no surprised because I've budgeted for my entire month, but I don't have all the funds in my account yet because I get paid throughout the month (2x a month for me and every 2 weeks for my spouse). I thought of doing recurring transactions like in the question above, but I have the same concerns as question 1, plus the fact that my pays fluctuate all the time (usually within 100$ or so, but still, that means that I can't really add a recurring transaction, at least I don't think so). I know the simple solution would just be to either wait until my transaction shows up, or simply add a rough number and modify it when the time comes, but I'm wondering if YNAB is "smart" enough to recognize that hey, my user inputted a pay under category x on this date and on the same date, a similar pay happened with a similar number, so I'll just put two and two together and associate them. Does that make sense? Is that something YNAB can do? If not, are there any other alternatives?
Thanks in advance!
1. No. Import will match on amount within a 10 (?) day window. If you fat-finger the amount (precluding a match), you can force a match.
Edit: If you have 2 transactions for the same amount, you might have issues with an import matching to the wrong transaction (still for the right amount). I don't know if Payee rules are used to "break ties". Faness ?
Right now my budget is showing in RED, which is no surprised because I've budgeted for my entire month, but I don't have all the funds in my account yet because I get paid throughout the month (2x a month for me and every 2 weeks for my spouse).
Let me stop you right here. Don't do that. The YNAB method is to only budget the funds that you have right now, not the funds you will have. If there is any red in your budget, the rest of your budget is inherently unreliable because you have introduced fake money into the equation. Rule 1 - give every dollar a job has the subtler meaning of don't give jobs to money that you don't have yet.
Part of any journey is knowing where you are at present. If you pretend to be 2-weeks further along with additional money, that's not a great idea. If you really have $100, but budget $200 to the Groceries category, you simply cannot base spending decisions on the category balance -- the entire point of YNAB.
Hopefully it's obvious that it makes no sense to put in a lifetime's income right now? Identical argument for next year's income, or even next week's.
Sure, with more categories you can implicitly steal from elsewhere and maybe not get caught, but you're missing out on some powerful psychological aspects. There's a reason traditional budgets (which use expected income) don't work very well.
I think as it seems odd that you have to make your budget for the entire month, but can't easily "preload" how much you'll be earning for the month, so it would technically always show you as being in the red until your last pay of the month (unless you keep excess money in your account, which again seems silly since any excess should be working for you in some kind of savings account vs just loitering in a chequing account).
You are misunderstanding how YNAB works. You are only supposed to budget for the whole month if you have the funds available right now. If you do not have all the money to cover all of your monthly budget, you budget to your highest priorities first (what does this money have to cover before the next time I get paid?) and you STOP budgeting as soon as your TBB gets to 0. Then when you get more money, you budget it to the categories that need it. Ideally you get a full month ahead - ie all income received in May is used to budget June. This allows you to budget June all at once.
Thanks both of you for your input. So I guess long story short, I'm not really using YNAB the way it's meant to be used, but I guess there's really nothing wrong with that. My situation isn't that I don't have the money, but rather that I just want to SEE where my money is going, ideally without putting much effort into it. As I mentioned earlier (in my comment that still hasn't shown up for some reason), I have a nice spreadsheet that I've been using for years to keep track of my budget and it works perfectly, except for the fact that I tend to get lazy and not keep it updated. For me, the beauty of YNAB is the linking of accounts which means that I'll get a good picture of where my money is going without having to put too much effort into it (obviously, I know that I'll have to put at least some level of effort into it).
I think I'll just keep going this way, ignoring being in the RED and see how the app works out. Again, I can absolutely see why the app is made the way it is since not everyone has the extra income to go over budget and not everyone has a steady income. But even for these people, it still seems strange that YNAB doesn't provide the ability to budget ahead. Using another example, if you know that your cell phone bill comes out every month on let's say the 20th, but your pay doesn't come in until the 15th, then you would have to leave the budgeted amount for the cell phone to 0$ until you get your pay on the 15th and then change it. But that bill is coming regardless, so it would be nice to be able to see it ahead of time.
I feel like the YNAB budget should have the option to set dates (like you would with transactions). So using the cell phone example above, you could input that the bill is due on the 20th and you input that you will get paid on the 15th, so YNAB will recognize that while you don't have the funds available now, you'll have them before the due date. If on the 15th something changes and you don't get paid (or get less than expected), YNAB could then check through your transactions (that you would configure manually I suppose) to see if you're expecting any other income before the due date. If you aren't, then at that point it could put you in the RED.
Actually, now that I write this out, I'm curious to give it a try. I'll input my 2 next pays into YNAB and see if the system will be smart and say: "hey, this guy doesn't have the cash right now, but he'll have enough by month's end, so I'll leave him alone". A man can hope right? lol. Otherwise, I'll just enjoy the magic of automatic transactions and wait until the end of the month for that red status to vanish!
Edit: I suppose I should also ask the question: Since I'm not really using YNAB as it's intended to, is there another app that would be more appropriate? Basically all I'm looking for is something that will link all my accounts (as best as possible since even YNAB has it's limit... cough cough Capital One) so that I don't have to constantly remember to update my spreadsheet?
I'm not really using YNAB the way it's meant to be used, but I guess there's really nothing wrong with that.
I guess that's true if you feel there's nothing wrong in making less progress toward your financial goals. Almost every YNAB user has experience with a budget that uses anticipated income. After understanding how YNAB is meant to be used, I don't know of ANY of them that would go back. They're simply far more effective now.
Again, there are more subtle, psychological effects that you miss out on by lying to yourself. I think anyone who's done it both ways knows there is a much better understanding of their own priorities; I know that's true for me. Without the luxury of saying, "ah, that overspend will just work out when I get paid again" -- or worse, if you've simply inflated the category balance in the first place -- you will find yourself reallocating from less important categories. If you can't find a less important category, then it makes it that much easier to not incur the overspending in the first place. In other words, you spend less on things that are not important, leaving more money for the things that are. That is just one reason why you'll make faster progress toward the goals you do have.
You've hinted at the fact you have enough money that you don't have to worry about the error introduced by budgeting money you don't have. If that's true, then it should also be true that you would have enough to arrange to use it as designed, including all those psychological benefits and accelerated progress.
All it takes is enough startup capital to cover expenses incurred between your first paycheck and the end of the month. That means you don't need any of your paychecks in the month you receive them and can budget all those newly received funds -- a month's worth of income -- to completely fill out next month's area.
Since I'm not really using YNAB as it's intended to, is there another app that would be more appropriate?
Mint. It's free. It links well (I think). You'll see your transactions as they happen. It's a forecasting, set it and forget it kind of app. With ads...
Quicken is not free, and I don't know if it links to accounts. It's a set it and forget it forecasting budget as well.
However, YNAB is far superior as a budgeting tool, IMO. I skimmed the above comments. I can come back later and add more thoughts, if you're interested.
I "used" mint for a few years. I wish I had used YNAB then. I can't imagine what kind of better financial position I would be in now. YNAB and its method made a humongous difference.
Yeah, if you're not going to follow the three rules, let alone Rule 1, then it's not worth it. Mint or Personal Capital would be your best bets. They have the best importing and allow you to see what you spent after the fact, beautifully. Just don't expect to get ahead or improve your financial standing.
You seem to have a solid handle on your needs, so perhaps 5 minutes each payday. Again, though, if you can push your income into next month, it's even easier.
Sure, there's some shuffle between categories when things get low, but that's a minute or two to fix that.
ensure that I keep enough in my account right off the bat to cover those expenses, but that extra money would be more worth putting in a savings account, rather than just sitting in my chequings account
Here's an important bit of information:
It is recommended to put your savings account on budget. That would allow you to budget the whole month at a time, which is really very handy.
Then, make savings categories for the rest of your savings account balance of today. Going forward, there's no need to try to synchronize account balances to categories.
Regarding interest, YNAB doesn't care where the money in your budget is located, so use the running balance in your YNAB check register (with as many scheduled transactions as possible) to maximize interest on your funds.
You've misunderstood the methodology of that's what you think YNAB is pitching. It's not a question of convenience, but of priority and information. You allocate based in the information available at the time. When "life happens" or new information arrives, you revise the plan as needed.
No different than changing plans to move a picnic inside when it rains. Insisting on continuing with the original plan -- ignoring the new information -- seems silly doesn't it?
Money SHOULD flow from low priority categories if higher priority categories need more money. That's just common sense. And it's a fact that priorities, scope, and timeline can change over time. Keep in mind the allications made sometimes weeks prior were estimates -- educated guess really -- and NO ONE guesses correctly 100% of the time. Reallocate with the benefit of hindsight (a.k.a., "recent information"), that's the essence of Rule 3.
I'm not looking for a full picture of my finances, but rather a full picture of my spending.
If you're not looking to plan your spending -- considering variable timelines -- then YNAB is not for you. There are far cheaper expense trackers that, in fact, do a better job.
unless you keep excess money in your account, which again seems silly since any excess should be working for you in some kind of savings account vs just loitering in a chequing account).
Some YNAB users disagree but most people who have been using YNAB for a long time and all the YNAB staff will tell you: put your savings accounts in your budget!
That will simplify your issues. Then from what you've written, it seems you'd have enough to budget for the full month at once. And you would get the additional benefit of categorising your savings and not counting them twice ($1 can't be used for vacations and a next car for example). And read this until you understand it: https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/
Obviously, you don't need all of this if you leave and go and use another product.