Keeping track of overspending in categories
It's my 4th day using YNAB and really want to make it work for me!
I have set up my Categories and started budgeting for some things. One thing I realised as I was doing this is that, while it's great that you give every penny a job, how can you keep ahead of overspending in one category over another. I'm sure you heard this a million times but here is an example:
I have a category for my daily dose of coffee, which I budgeted for the month. While I know it's ok to overspend and then move from a different category, what if I want to keep within my budget for this category?
One way I fist dealt with it, is by inputting daily the amount I spend on cafes in the 'To Be budgeted', having first set up a monthly goal. This, however, is a bit counter-intuitive for YNAB since it will mean that I wil tediously have to put that money in the 'To be Budgeted' on a daily basis.
Is there another way of doing this, more practical, more efficient? The same goes for most of my 'To be Budgeted' things, how do I keep track of what I'm doing month in month out...?
Screenshots would help here! But here's the typical way to do it (and what satcook is suggesting):
On the first of the month (or when you get paid), budget $50 to the Coffee category.
When going for coffee, check your category balance before spending. If it's getting closer to the end of the month and the category is running low, that tells you it's time to skip a day, buy drip instead of latte, make coffee at home...or, if coffee is a high priority, move money from another category.
Next month, repeat. That's it—and your other daily spending categories work the same way.
Thank you all for your replies.
I guess I'm missing something fundamental about YNAB here..!
I have attached 2 screenshots of what I've done exactly. I have created a 'Monthly Funding goal' for the remaining month, (started 4 days ago) of €43 by placing it in the 'Available' column. Then went to the 'To be budgeted' column and budgeted for that exact amount. But this, doesn't tell me how much I'm spending really.
Do you now see what I'm getting at? How do I know if the category is getting low Danielle M. ? Is there another way to set this particular Goal? Can you describe exactly in steps how you set it up so it shows you if you're running low?
Thanks again to everyone..
Here's what I THINK you're asking, but let me know if I'm way off base!
You have budgeted for your coffees, but aren't sure how to make sure you're staying within your budget.
The way you do that is to track your coffee expenditures. There are a couple of ways to do this, depending upon how you like to pay for your coffee. One simple way if you like to pay cash and don't like to track is to withdraw the 43 euros at the start of the month, categorize the withdrawal to the "coffee" category which will zero out that balance, and then spend from your wallet until it's gone and then stop.
If you use a card, you can either track your coffee purchase whenever you get one, or if you get it daily, you can set up a recurring transaction from your card account and that will automatically input it for you each day. But any time you spend money you DO have to tell YNAB that you've done so and what category it was for or you're exactly right, the software won't know how much you have left.
It may seem burdensome or overwhelming at first, but it's really not. I'm in the U.S. so I have the option of just direct importing my transactions but I log everything manually because it makes me feel in control. It takes less than 5 minutes a day...most days it takes less than 2 minutes. And in using YNAB for 35 days, I've literally increased my cash on hand from nothing to 400 dollars while dealing with an apartment flood, an unexpected vehicle repair, three fillings, and the YNAB annual fee. So figure I've spent 2 hours tracking and 2 hours budgeting and I've made 100 dollars an hour. It's definitely worth it.
So in essence, you need to create a Goal for each thing you're budgeting for, input the projected monthly amount you need, and then, do what I've said in my first message.: input each transaction separately in the Budgeted for column..?!
Correct me if I'm wrong, but I have found free apps that do that. While it's great at first to enter each transaction at a time, there will be a time where you just give up this tediousness..!!
As for the 'envelope' example, where you set the money aside, I will need about 40 envelopes...lol...!!!
Either I'm not explaining myself clearly, or I have maybe set some high standards for an 89 $ paid app.
How do you go about creating such goal? Can somebody give me a step by step example I will ask again please?
Is the way I explained earlier the wrong way of doing it?
Thanks again everyone..
input each transaction separately in the Budgeted for column..?!
Maybe there's a communication barrier? I mean this gently, because I may be the one misunderstanding. It sounds to me like you're not getting that there is the budget screen, where you make plans for your dollars/kroner/dinars/whatever, and the accounts, where you enter actual transactions.
Say I budget $43/mo for coffee in the budgeted column (with a goal set on the category or not). Then I go to 7-11, swipe my debit card and buy a $2 coffee. I need to click on the debit card account (on the left side of YNAB's window) and then in the main pane/register, I need to add a transaction. It'll have today's date, 7-11 as the payee, "coffee" for the category, and $2 in the outflow column. My debit card account's balance in YNAB is decreased by $2, as is my budget category. The "coffee" budget category's available column will now show $2 less available than it did before I bought the coffee.
If you think that's too much work to have to do to keep track of your money, then yes, your expectations are too high for an $89 paid app. In fact, nothing is going to get the job done without this level of engagement.
I mention Goals because that was one way I had found that it told you how much, (both in % and money), you were away from your target. I achieved that not by putting in the same target amount in the To be Budgeted with the one in the Goal, but by inputting the amount I'd spend in a day in my coffee for example. That would tell me in a way if I was 'overspending', (i.e ..'your're so much % of your monthly goal).
I'm afraid I'm still not understanding this. To Be Budgeted is only one number for your whole budget, and it's the amount of money you have available overall that has not been given any job.
Do you mean the "coffee" category's "budgeted" column?
As far as everyday expenditure, I will still set up 'monthly payment targets' and manually adding the amounts I spend in the 'to be budgeted' column. That is a way for me to keep track if I'm overspending, close to doing so, or within the budget/goal I initially set up.
Okay I think there is a big misunderstanding happening. Say I have allocated $43 dollars/month for coffee. In order to do this, I enter 43 in the left hand column of my coffee category on the budget page. On Monday when I go to the store to buy coffee for $4 in cash, I will then go to my Wallet account in YNAB and enter the transaction with the Payee being the name of the store, the category being Coffee and an outflow of $4. By doing this, the $4 will show up in the middle column of my Coffee category line on the budget page and the available amount in the category in the right column will now read $39. I will not make any changes in the left column on the budget page. It stays at $43 in the left column.
I recommend Nick True's YNAB videos on youtube. The first one is below, he has a slew of them. The credit card one is particularly useful. The middle of the month one can be useful if in fact you are getting things going mid month. I'm not affiliated with the guy, I just thought his videos were great.
If you're non-US based, there's some things YNAB is not set up to do properly, like bank accounts which allow you to overdraft up to a certain amount without penalty. YNAB is sadly US-centric. There are work arounds but there are other threads in which those are discussed. If you think that YNAB is not set up to reflect your reality, definitely do some searches or start a new thread.