gooded When you let a category go negative, you're still taking money from another category (because the money has to come from somewhere); you're just not being transparent or intentional about which one. Explicitly moving money will lead to better outcomes than the approach you describe, because (a) it forces you to confront your spending priorities, and (b) lets you capitalize on the feeling of scarcity. Taking money out of the other categories feels bad, doesn't it? That's a good thing! It means you really have to stop and think, not just let a category go red and say, "I'll deal with it later."

You probably don't need a reminder to refill the category you borrowed from. You will be looking at your budget regularly, and if a category is underfunded, you'll probably just know. This is real budgeting. For those where it's not so obvious (such as annual premiums), use a reminder in the category name, note field, or a separate to-do list app.

Finally: Your question gets asked a lot. Both YNAB itself and the community have really thought through the pros and cons of being able to leave categories overspent. And the cons vastly outweigh the pros. 

gooded You're thinking about things in a forecast budget way, not an allocation budget way.

You spent a bunch on Vacation this month. Fine! You had the money to cover it from other categories. Next month you're going to get your paycheck and sit down and look at your categories and your TBB balance. Maybe some of your categories are lower than you'd like because of your vacation spending in March. Great, prioritize them. Now you probably have less to allocate to Vacation.

There's little to gain from thinking in terms, "I need to fund this category less in the future because I spent more on it today." That's arbitrary. It has nothing to do with your goals and responsibilities, unless one of your goals is "Budget less money for vacation," which is probably no one's goal. Depending on how things go over the rest of the year, you might end up budgeting less for vacation, or not. As long as you're working within your means and your priorities, it's fine.

Or, put another way, if you want to deemphasize vacation, what is it you want to prioritize instead? Is it categories you moved money from to cover the most recent vacation? Is it debt repayment? Retirement savings? Think in terms of what you want/need to prioritize, not what to deemphasize.

gooded one of the key points to keep in mind about YNAB is that it is an allocation budget. It is designed to build a budget based on the money you have now, and that means (as someone said elsewhere in the forum), "the money's gotta come from somewhere".

If you intend to spend 8400 a year on vacations, but spend 3000 when you had only saved up 1400, the other 1600 had to come from either somewhere else in your budget or it was a new debt (possibly a balance on a credit card). Either way, it's better to make your budget reflect reality than to have your money counted against two categories.

gooded Try making a goal in your emergency fund of a certain amount to hit that $1600 overspend! You can still put in your $700 a month, but try to add a little more for the next few months to reach it.

gooded if you use a monthly goal you can adjust that for each category. I would remove any goal I had on Vacation and change EF to be target (current balance + 3 months funding) by 3 months from now.

Renaming categories is not difficult, but if I were doing it in YNAB instead of as a way to explain I might have done something like

🛑 Vacation (0/mth A&M,500 J, 700)

⚠️EF (1000/mth A&M, 500 J, 300)

if I needed to make the adjustments in April & May. I could probably make it even simpler if I wanted.

  gooded There was a way to handle this perfectly in the prior version of the software, which I still use.  So what you are saying/thinking makes total sense.  However, I will say that the advice given here is good and should be considered.    But I just wanted to say "I totally get what you were asking; it's sad the current version of the software can't work with you."

gooded you can also have a goal to budget 333.33 a month if that is the average monthly amount to reach your goal. I find that works best when I will be spending out of the category

gooded That's a good idea except my income is highly variable. For instance, this past month I put $1,500 in the vacation category but in April, I'll only be able to able to cover my basic living expenses. 

The monthly option doesn't really take that into account unfortunately. So if I don't find it on month it won't make not of that the following month. Or if I over fund it one month it won't tell me I need to budget less. 

I suppose I could go in and adjust the goal every month but that seems cumbersome.

Captain Taniele Spreadsheets are good for this, as you pointed out. I keep one for my participation in the Savings Challenge, with all my budget categories and how much I want to save per month so if I forget I can just refer to the SS. And when my priorities change, it's easy for me to adjust and see how I want to change future months to still achieve my goals. For example, this month, almost a quarter into the year, I decided to scrap all my plans I'd laid out in the Savings Challenge and throw everything at my income replacement fund. Now that it's minimally funded, I can shift focus to my home repair categories (my myriad, myriad home repair categories! 😂) and I've got my spreadsheet to tinker with how I want to start building those back up again.

For me, changing goals in YNAB as needed doesn't feel cumbersome to me, but then I actually love playing with my budget. For everyone else, there's an easier workaround of just using a spreadsheet.

bevocat I think I'll always have my spreadsheets. I rather enjoy them. 😁

This thread has given me a better idea of how to manage my spreadsheets, which really is forecasting, by using the allocation formula that YNAB teaches. 

I still think you need to have both. Maybe this will change later but for now this is how I see it. 

For example, I want to max out both my 401k and my IRA this year. Rolling with the punches means one month I may decide to fund another category instead of these. I still want to be able to go back later and know I need to make up or prioritize those accounts down the line if I want to be on track. 

Similarly with my vacation example, I only want to spend $4k this year. If I decide to book a cheap weekend trip somewhere that I wasn't planning on, I could say oh well, my priorities changed and just keep funding that account. Or I could say ok I spent that extra money there so now I have less to spend on other trips down the road. 

Certainly priorities do change but I think it's important to hold ourselves accountable. It could be very easy to use the idea of changing priorities to use money in ways we didn't intend to. While sometimes that is necessary, there will be other times when it is not and we're just going on impluse. 

To that end my solution for my vacation fund example is this. As adriana01 and gooded suggested, I'll get rid of the total goal. Instead I'll do a monthly funding goal. So if it's $4,000 as a whole and I've already saved $1,500, my new monthly goal for the next 9 months will be $277.78 per month. 

If I'm able to add more or less than that next month I'll adjust the monthly funding goal so I never fund over $4,000. I added a note to the details page with the total I want to add to that category for the year. Once I spend money from the category I'll also not the total spent here. I'll use that as my reference. 

I think this will help me to keep my overall priorities straight while only allocating the funds that I have on hand.

Captain Taniele Would creating a separate category for each vacation you want to take solve the problem. Once you've taken one of the vacations, you could move any remaining money that specific budget line item somewhere else and then hide that specific vacation category from your budget. It's more categories to deal with but each trip becomes it's own savings fund/goal.

gooded

Paying back an overspent category is a null concept in YNAB.  It's just not part of the system.

If you want to regard that $1600 as "on loan" from other categories until it's paid back, that's all on you to devise a workaround that meets this need.  YNAB won't help you with anything automatic.

To be fair, I do things like this.  Extended example:  I have an HSA that is off budget.  HSA contributions are a budgeted expense.  Through March, I spent all of the medical category on my HSA contributions.  Then I decided to open an HSA with a different custodian for a better deal.  I can transfer the accounts, but there is a noticeable time lag and a period of frozen access.  Meanwhile, I need to occasionally use the HSA to pay for medical expenses.

So what did I do? I moved $1000 from my Unexpected Expenses category to Medical, and used that to fund the newly opened HSA.  Once I had my debit card for the new HSA, I started the transfer process and I'm no longer concerned with the time lag.  $1000 will cover any out of pocket medical expenses I have before the funds transfer.

Meanwhile, in the budget, my Unexpected Expenses category is below its target level.  Building it back to its target level becomes a priority.  I also need to budget $1000 less to Medical over the rest of the year, because I cannot contribute more than the legal maximum to the HSA.  So I write myself category notes for Medical detailing the numbers, and I just know I need to build Unexpected Expenses back up to the target level.  More formally, it would be possible to do my initial budget each month, then move money from Medical to Unexpected Expenses until the latter is where it belongs; but in reality, I am likely to find extra money to throw at Unexpected Expenses.  That extra money makes the "pay back" mode less useful.

Patzer said:
Paying back an overspent category is a null concept in YNAB.  It's just not part of the system.

That may be the key right there. You don't pay back the overspent category.

If you want to ensure that you don't exceed spending in the category on an annual basis, use reports to check your spending. 

gooded the "built into YNAB" method is to either cover the overspending with existing money or create new debt, and then adjust your priorities as needed. How you track what your priorities are is up to you, but in YNAB you can use the category title, goals of some sort, or category notes. I find category title & goals most useful. Sometimes, though, I just acknowledge that my priority changed & move on rather than make grand schemes to "make up for" an overspent category.

gooded In the summer of 2017 I bought a house on a whim. I mean not exactly, but close enough - I very quickly moved from conceiving the idea of buying rental property in April to making an offer in June (I bought a rental property that was priced right and already had a tenant). But I needed to raid some categories to get the cash for my down payment. I don't use goals. However, I could tell at a glance that my Hawaii Dream Vacation and my Income Replacement categories (amount 3 others) needed to be repaid so I just kept sticking dollars into them until they reached the number that I knew it should be. It's a little bit different in my situation because at the time I did it, all of the categories that I raided were fully funded and I wasn't adding to them anymore before the cash raid.

That's an extreme example. But say I get a call tomorrow that my cousin from out west is going to be in town this weekend and do I want to go to dinner with her and my other cousin. It's the end of the month so there isn't tons of money in my dining out category. So I have to take some money out of my Clothing & Accessories category. I'm not going to pay that back. I'm going to trust that I made an honest assessment of my priorities and decided that seeing my cousin was more important than getting a new pair of shoes and there is nothing actually to "correct" in my budget. I mean, I'll eventually get those shoes but it will have to wait until there is enough in the category. I budget the same amount to Clothing (and to Dining Out for that matter) every month, so eventually I will get there.

gooded yup - generally if I need more in a discretionary category, it has to come from another discretionary category (going over in Groceries? Has to come from Dining Out since both are food expenditures). But this is just my rule for myself.

gooded  Now you're getting into the true heart of YNAB - saving for purpose. Instead of "stealing" from the emergency fund for things like vehicle repairs, you should setup a vehicle repair category and either add funds every month or initially move money from your bulk "emergency fund" for it. Instead of a bulk $10,000 sitting in an "emergency fund" you may find that you have $2000 in vehicle repair, $2500 in medical deductible, $1000 in a random emergency fund, and $4500 in your income replacement fund (what most people think of emergency fund - the oh no I lost my job what will i do fund). Or whatever reasons you want to save money or may need to use those savings for.

At some point, you fill up all those funds and then maybe consider investing.