How to untangle budget/account mismatch mess?

Hi all. So, me and my wife have been using YNAB for a little over two months (just finished the trial). I was reading Help, FAQs, watched videos and contacted support about some bits, but the end result is a complete mess.

We dutifully classify all transactions, and setup budgets on the 1st of the month, and yet none of the credit card account balances match the YNAB view, and neither does checking account balance. We are constantly seeing negative To Be Budgeted and "you have overbudgeted" warnings and yet have ~10k on the checking at the end of the month (my paycheck comes at the last business day of the month).

(Honestly, considering how long YNAB has been around and how many people are using it, I am surprised it takes so much effort to ramp up and use it, especially outside of the app itself; lots of potential design improvements).

Anyway, we are tenacious and willing to work with YNAB for a bit more. I suspect that the main problem are credit card accounts and mismatches between their pay cycles, paycheck cycle and budgeting cycle (1st of the month), but that does not really explain the checking account mismatch as well.

Did anyone else have this problem? Is there a standard procedure to figure out and fix all the mismatches? I saw "manual reconciliation" but that does not seem like a proper/sustainable solution. And I do not want to start from scratch and lose the transaction and budget history...

I've read somewhere that one can re-characterize credit card accounts as "checking" (paid in full = our case), to disable YNAB money-moving magic for them, but I could not find how/where to do it - is it still a supported option?

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  • For the credit cards, when you started using YNAB, did you budget the amount of your outstanding balance to the credit card payments section?  So if your starting balance was $555, then you should have budgeted $555 to the credit card payments section to reserve that money to pay off the card. 

    Reply Like 3
    • satcook I am trying to fix this retroactively for one card to start with. I've calculated my starting balance for Apr1 based on the March statement + one March transaction post-statement = 160.78.

      I budgeted 160.78 on that credit card. However, I think the problem is that YNAB does not apply that budget towards the payment:

      • Starting balance Apr 1 (budgeted for): $160.78 = $109.54 March stmt + $51.24 March transaction post-statement.
      • April expenses on the card: –$342.82 (all budgeted for in other categories, no overspending in any)
      • April also has 2 positive transactions:
        • +109.54 payment for March statement. I coded it as transfer from Checking to Card account, so there is no category, and I think that trips up YNAB.
        • +5.97 cashback from transactions in April (since March stmt) - coded as "To be budgeted" per YNAB guidelines.

      So, now YNAB considers that $109.54 as a return of some sort and shows me Apr activity on the account as $233.28 = –$342.82+$109.54. It adds that to $160.78 "budgeted for" and shows me that I have $394.06 balance left on the account by the end of the month.

      This is why I am saying YNAB is confusing.

      What I really need is for YNAB to code +$109.54 payment as an expense, and apply it toward the budgeted amount $160.78 on the CC itself. That would leave the end of the month balance on the credit card account as $51.54 to cover transaction from March which will be paid in May (from April statement).

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 3 mths ago
      • 2
      • Reported - view

      alexandroid What you see in the budget is not a reflection of the money owed, but a reflection of how much of the budget is reserved for paying the card. By the time you pay your card, you’ll likely have spent additional budgeted funds. For most people, the category will never be zero. 

      Your procedure is exactly correct. Maybe take a credit card webinar so that you understand the mechanics and what number should match what. 

      Reply Like 2
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 3 mths ago
      • 4
      • Reported - view

      Also, don’t try to retroactively fix this. Just budget so that as of right now, in July, the card category and the working balance on the card are equal to the penny. You may need to move money from other categories to do this.

      Reply Like 4
    • WordTenor Is there a technical reason which should prevent me from fixing this retroactively?

      "As of right now" is a bit of a pain too since YNAB is 1-3 days behind on transactions, so I have to check every single card and account to subtract pending transactions which are not in YNAB yet.

      Reply Like
      • dakinemaui
      • dakinemaui
      • 3 mths ago
      • Reported - view

      alexandroid As of right now means look at the account balance in YNAB. Make the category match it, whatever it is (as a positive number).

      When transactions import, both the account balance and CC Payment will be updated in lock step, assuming those are budgeted purchases.

      Reply Like
      • dakinemaui
      • dakinemaui
      • 3 mths ago
      • 2
      • Reported - view
      alexandroid said:
      Is there a technical reason which should prevent me from fixing this retroactively

       Only if you consider expending effort for zero benefit a technical reason.

      Reply Like 2
      • satcook
      • satcook
      • 3 mths ago
      • Reported - view

      alexandroid manually enter those pending transactions so YNAB is up to date!!

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 3 mths ago
      • 2
      • Reported - view

      what dakinemaui said. Basicallt just that it’s a pain in the tuchis for the same result. Right this minute, your card payment category should match to the penny whatever your card’s working balance is. While you should manually enter pending transactions, it ultimately doesn’t matter; when they downlaod, the numbers will change accordingly, provided the purchases are budgeted. Flip to the register *right now,* note the current working balance, and then budget the card category in the budget so that it is the same amount. 

      Reply Like 2
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 3 mths ago
      • 2
      • Reported - view

      Also to be clear, for most folks while a transaction may take 1-3 days to *clear,* your cleared balance in YNAB vs the bank will usually be spot-on, or at most, will take 12 hours to equal out. You don’t use the working balance to reconcile; that balance includes those 1-3 days waiting transactions. 

      Reply Like 2
    • satcook Yes, it makes sense. This is another thing which YNAB app should warn about during new account linkage. They only say "don't worry, you can change it later". I am pretty sure I used "current balance" as shown on the 4/1 when I started the account tracking, without paying attention to transactions pending on the same day.

      Found a missing transaction (statement credit) in YNAB, after adding it retroactively the balance matched. This is 2nd or 3rd missing transaction I found in just 2 months of using YNAB =\

      Two accounts are done, three more to go!...

      Reply Like
  • If your paycheck doesn’t come until the end of the month, then you can’t budget that money until the end of the month. Once your TBB number is $0, you stop budgeting until you receive more money. 

    Reply Like 5
  • Hi alexandroid !

    If your accounts in YNAB aren’t matching the bank (account balance and transactions), then you can’t trust your budget. If you have $1,000 in your account, but YNAB thinks there's only $800 in that account, you can't budget all of the funds you have.

    YNAB only imports your balance once. From there, the balance is updated by the transactions you enter and import. This means if your balance in YNAB isn’t matching your bank, there is a transaction problem. 

    To get this fixed, use the reconcile feature in the web app (on your computer). You could open a separate browser window for the YNAB account and your online statement to more quickly check them back and forth.

    You have total control of the balance—look for the following in your register, fix any discrepancies, and you’ll be back on track:

    - Transactions that have cleared the bank but have a gray C next to them

    - Missing transactions that need to be entered or imported

    - Transactions you entered or imported that have the wrong amount (maybe inverted, 0.34 instead of 0.43, for example)

    - Duplicate transactions

    - An incorrect starting balance

    When you have a moment, take a look at our Ultimate Get Started Guide and consider taking one of our free, 20-minute workshops. :)

    If you still have questions, please let us know! We'd be more than happy to walk through setup with you!

    Reply Like
    • Faness Please see my reply above.

      Reply Like
  • YNAB is an envelope budgeting system. It is quite simple to understand once that fact is understood, but it takes a good number of people a moment to really understand what that means, especially if you make a good income and generally don’t run out of money. YNAB is going to show you scarcity that you aren’t necessarily feeling,

    Judging from your statement about cycles not lining up, I’m going to guess you probably are relying on some amount of credit card float. To get things in order, step one is to get your accounts accurate. I don’t recommend using the reconciliation feature, except to lock the final value. Don’t let it make an adjustment for you: if the balances don’t match, go through and match your transactions one by one with the bank until the cleared balances match. It’ll take a good minute, but understanding this aspect is vital.  

    Once the cleared balance for each account matches YNAB, you need to ensure that:

    1. You have no categories overspent

    2. TBB is not overbudgeted

    3. Your credit card payment categories match, to the penny, the working balance on the associated card.

    When those three things are satisfied, what is left in your budget is what you truly have available for spending. It’s going to be less than what you make, possibly a lot less. If there’s not enough left, come back and we can tell you how to get off the float.

    Reply Like 4
      • Tif_Ann
      • Tif_Ann
      • 3 mths ago
      • 2
      • Reported - view

      WordTenor It seems they might also be relying on "paycheck float" (new one to me) in that the paycheck they seem to be budgeting arrives on the last day of the month.

      The paycheck should be paying your expenses that come after the paycheck, not before. If you are budgeting July based on July 31st's paycheck, you are overbudgeting. If you are using credit cards to pay your expenses that you are budgeting with money that doesn't exist you are also using tomorrow's money for today's bills.

      Getting off the float is your first step. If you can't budget your entire credit card balance AND all expenses you need to pay until your next paycheck with money you have in hand today, you are on the float and living on debt. 

      Reply Like 2
    • Tif_Ann WordTenor Yes, it seems that we may have this float happening. My plan is to move some money from savings to checking to deal with it (I know I can do it via budget categories alone but it seems cleaner and easier to follow this way).

      Reply Like
  • So, my algorithm roughly turned out to be the following. I started using YNAB & tracking on April 1st:

    • Download the March statement for an account (which was issued somewhere in March)
      • Note the statement balance
    • Download the April statement for the same account
      • Sum up all March transactions which happened after March statement (including refunds which happened in March)
      • Add them to the March statement balance = card balance on April 1st - set that as "starting balance" in YNAB
    • If that did not fix the current balance, look for missing transactions
      • Especially around April 1st
      • Cashbacks transactions, refunds etc

    Based on this, my recommendation to YNAB is to facilitate this setup during onboarding. I.e. instead of asking the question "What is your current balance?" which will never be correct (due to pending transactions), ask the question "What was your last statement balance?" and ask for the date when it happened. Ideally then YNAB should suggest to use the "last statement + 1 day" as the starting date to import transactions in, to avoid manual work to calculate the balance "as of today".

    Reply Like
      • Ceeses
      • Ceeses
      • 2 mths ago
      • 3
      • Reported - view

      alexandroid Hi, I think you complicated things but it also depends on your bank. Personnally, my bank gives me a balance that does not include the pending transactions. So when I open an account, I simply have to enter this balance as a starting balance in YNAB. Then enter the pending transactions manually (or wait until they clear if I don't like manual entry) and as long as the spending for those transactions was budgeted for, it's all good.

      It would make a lot more work for me to start from a statement balance and then have to enter all the transactions between then and now (not in the US so no automatic import). And it seems most folks are given a balance by their bank that does not include the pending transactions, although it isn't always the most prominent one.

      Reply Like 3
    • Hi alexandroid !

      Were you trying to use just your bank statements to find your current balance? That seems a bit tricky and would take the steps you mentioned. However, if you have access to online banking or even telephone banking you can find your bank account's cleared balance as of today to enter into YNAB. The cleared balance shouldn't include pending transactions, as Ceeses mentioned, so it would allow you to start your budget without pending transaction issues. :)

      Reply Like
    • Faness "Shouldn't" is the key word here. Some banks do, some banks don't. I did it. I looked up balances on online banking on the day I was setting up YNAB accounts. And that resulted in a complete mess, because those balances were not accurate.

      What if I am signing up for YNAB at lunch time, when some transactions already happened and some will happen later in the day? Will YNAB be smart enough to pull transactions after lunch time only? Currently YNAB app does not instruct me about this at all.

      This is my entire point - I am trying to highlight a deficiency in the onboarding process to give YNAB team a chance to improve the app. I don't need to be told "you are not doing it right" instead. It's YNAB app's responsibility to provide enough information during onboarding of new users. It's the app's responsibility to guide me into fixing problems. If I am doing something wrong, it's because the UI is confusing. "Go watch all videos we made" is not a viable or customer-focused approach to resolve design flaws in the User Experience of the app.

      Please forward this feedback to the YNAB design team.

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 2 mths ago
      • 2
      • Reported - view

      alexandroid Just as a point of terminology, the cleared balance never includes pending transactions. The issue is that some banks now show the working balance more prominently. So a user might think they are looking at the cleared balance, but they are not. This is especially true in the post-CFPB USA, as they put in place rules which required banks to show the working balance in order to lessen predatory overdraft fees. 

      This is always going to be a problem for YNAB onboarding, because many people who are coming to YNAB are coming without any sense of there even being a difference between cleared and pending, much less the skills to determine which is which, yet each bank is going to show this information slightly differently so there's no way for YNAB to go "Here's what you need to look for." My checking account, for instance, doesn't even display pending transactions, while the biggest number on my credit card screen is a working balance and I have to look to the register to find the actual cleared balance. 

      I agree that the onboarding instructions ought to explain a bit more about what a cleared balance is and what it might look like on a bank screen. If you choose to link accounts, nearly all accounts will download the cleared balance as the starting balance. This sometimes confuses people because YNAB will download the cleared balance, and then they will flip back to their bank screen and see a very prominently displayed working balance and think YNAB has made a mistake, when it hasn't. 

      tl;dr, each user has to learn where the cleared balance is displayed for their individual bank. 

      Reply Like 2
    • alexandroid One other point regarding cleared vs pending. My bank doesn't even use that technology so it took me a little while to figure out what was going on. When I open the account, I get 2 balances that immediately show up: CURRENT BALANCE and AVAILABLE BALANCE. In WordTenor speak, the Current balance is my cleared balance and the Available Balance is my pending balance. When I first set up my accounts in YNAB I automatically assumed that I should be using the Available Balance as my starting point. That made perfect sense to me. When I couldn't get my account to reconcile, I contacted support (Privately, not on the forum) and they were quick to respond and work out what was going on. It can be quite confusing in the beginning, but there are lots of people here willing to work with you to explain and help. I do think the videos are helpful, but as you mentioned, they aren't the be all and end all. That's what support is for.

      Reply Like 2
    • WordTenor KnitPurlKnit You are holding the bar for YNAB's development team too low =) YNAB knows which bank I am linking, so it could, in theory, provide exact instructions for the user which number to lookup & enter for my specific bank.

      Better yet, YNAB could work with Plaid (account aggregator they use) to pull in the starting balance automatically without asking the user to do anything. There is an API just for that: https://plaid.com/products/balance/

      User does not have to learn anything, if the design is done right. Support forums should be for rare & complicated cases and not for onboarding or business-as-usual things.

      Reply Like
    • alexandroid I would think the user would still need to learn how to interpret their bank screen... Whether or not they use YNAB.  You're asking that YNAB teach people not just their budgeting method and tool for helpfully implementing said budget in your real-life money decisions, but also how to use other financial tools/applications? That's a tad unfair to YNAB. Why should they be responsible for making sure their users know how to use various bank interfaces, credit cards, and investing companies? What a liability! 

      I think we get the best of both worlds on the forum: a helpful philosophy and tool to implement it (with ideas for maximizing its use), as well as some peer financial education from other users. 

      Still, I imagine that most people would like to start budgeting the money they have when they start using YNAB, rather being told, "Please wait 8-24 hours while our import partner retrieves your balance."

      Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 2 mths ago
      • 1
      • Reported - view

      alexandroid YNAB does pull the cleared balance when you link a new account. 

      Expecting YNAB to have detailed instructions for each of thousands of banks is a bit much, don’t you think? I do agree they need to be clearer that different banks show the number differently and have different terms for them. But since the software does pull the right number, I think they’ve gone a long way toward making it easy for even someone who doesn’t understand the concepts well. 

      Reply Like 1
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