Have I mis-handled refunds in YNAB 4?

We've been using YNAB 4 for about 4 years.  Whenever we received a refund from a vendor, or a friend paid us for their share of something, we'd enter that money into YNAB by crediting it directly to the category it was originally from (like "dining out") instead of "Income for April".

For example, if we returned a kitchen item to Amazon, since the purchase was originally classified in YNAB as "household goods" category, we'd enter the refunded dollars directly to "household goods".  The thinking was, the money was going back to the same category it came from.

I recently realized that the numbers in the Budget screen, such as "Income for (month)" and "Available to budget", never increase when I enter incoming refund money this way.  We've assigned the $ directly to categories, so those numbers should be correct, but the totals at top of Budget must be wrong.

So I think we may have a bunch more money available to us in Budget that is not displaying properly.  To see it, I think I should fix all of the mis-entered transactions - by going back and changing them to "Income for (month)", then assigning the money to categories.

Is that right?  I did mess this up, right?  And that's how to fix it?

thanks in advance for the help!

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  • You are doing it correctly. The money is s available to you in the household goods category but it is not new income. 

     

    Do you reconcile your accounts??  If so, then your budget is correct. 

    Like 2
      • Jordan
      • Green_Tape.6
      • 1 yr ago
      • Reported - view

      satcook  I do reconcile the accounts, and they reconcile properly.  But I don’t think that’s has a bearing on the numbers in the budget header.  Reconciling would work whether inflow was categorized as “Income for month” or as a deposit into “dining out”.  Bank statement doesn’t care what I call it

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 2
      • Reported - view

      Jordan Here's everything you need to know about YNAB4 and ensuring your accounts and Budget are in balance. I haven't pulled this graphic out in awhile.

      Like 2
  • Only money categorized to "Income for <month>" affect the headers. When you have an inflow categorized to a spending category, it just puts the money back in the category. It's not income, and it's not available to budget because it's in the category already.

    Like 3
      • Jordan
      • Green_Tape.6
      • 1 yr ago
      • Reported - view

      nolesrule that's an excellent summation of the core issue.  Thank you!  So, have I been making a mistake by categorizing these refund/reimbursement payments that way?  Should I go back and revise those transactions to be "Income for month"  first and then assign to categories?

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 1
      • Reported - view

      Jordan No, there's nothing wrong with doing it the way you have been, and it actually ensures your categories have accurate spending numbers. If you spend $50 and have a $25 refund, your spending is $25, not $50 and $25 of income.

      If you want to move the money out of the category that's a separate decision and you make changes in the Budgeted column.

      Like 1
  • When we add a reimbursement (that is an inflow in the account section), it is showing up as a negative active in the budget category when we do it the way you've suggested nolesrule.  Can you help diagnose what we're doing wrong?  Thanks, Katie

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Purple Hail screenshot?

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  • I typically add it as an inflow to that specific category as well. The issue is if you'd already budgeted to cover that category, your category is now over budgeted. 

    You'll then need to move money from the category with the excess to another category where it's need. 

    For instance I have a category for work reimbursements. I always fund that category with money from my income. Then when I receive the reimbursement I inflow it to that category. It then shows up in the available balance for that category. From there I can move it around as I see fit.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
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      Captain Taniele 

      Captain Taniele said:
      your category is now over budgeted.

       Overbudgeted means you've budgeted more money than you have.

      In the use case being described you are not overbudgeted, but rather you have more money than you need/want in the category, so it's best to move it where it will better accomplish your goals.

      Like 1
    • nolesrule that's what I meant by over budgeted. Apologies for not being clear. 

      For example, in my work reimbursement category I had $300 worth of work expenses. I covered those expenses with funds I had on hand. So now the available balance in that category is $0. 

      When I receive the $300 reimbursement from my job I inflow it to to the reimbursement category. The category now has $300 available and a total of $600 was budgeted. 

      So in this case I would move to extra $300 to another category to give those dollars a job.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
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      Captain Taniele I know that's what you meant. Just need to be careful with terminology around here. 😉

      Like 2
  • nolesrule said:
    categorized to "Income for <month>"

     That category doesn't exist in nYNAB.

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      • jenmas
      • jenmas
      • 1 yr ago
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      JoeDid But the question is specifically about YNAB 4.

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      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 1 yr ago
      • 1
      • Reported - view

      jenmas Oh, sorry! That's what I get for jumping into the middle of a discussion. Sorry, nolesrule

      Like 1
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