I feel like I have too many categories -- help!
I'm just entering my second month of using YNAB. I've watched a ton of videos from YNAB itself and fellow users, but I feel like I can't get a handle on my categories.
I have "daily spending" categories at the top, which is where I put clothing, beauty, etc. Then I have another category called "Planned Spending" where I save up for big purchases.
I have savings that go into my actual savings account, which is in a category called "Freedom Funds" (I got the name from someone on here :P).
I have fixed month below all that, which is where my rent and car payments go. Then I have a small "fixed occasional" for my bi-annual insurance, YNAB subscription, etc.
Lastly I have the CCs and loan principles I'm paying off, followed by the separate CC category YNAB created for the only CC I have added as an actual account (the rest are just "tracking" accounts because I don't use them).
Below all that is a Wish List of future things I want to save for. I can collapse this one.
I've reordered the categories accordingly so the things I look at the most are at the top, but I feel like it's so much scrolling! I want things neat and orderly. Any feedback from those who have gotten a handle on their budget items?
Its okay to have alot of categories. I have 114 categories. For me, it got better when I got 1 month ahead. Then on the first, it was a single step to fund everything. My groupings are:
- Monthly Bills: Bills every month
- Irregular Bills: Bills not every month
- Life: Splurge, Haircut, Entertainment, Groceries, Get together, Coffee/Liquor, Gas, etc
- Insurance Funds (General Savings): All Insurance Bills
- Sinking Funds (General Savings): Dated Sinking funds (Valentines, BDays, Holiday dinners, vacas, etc)
- Bucket Funds (General Savings): Non-Dated Sinking funds: Clothing, Maintenance, Fun Money, Technology, etc
Every couple months I will rebalance checking/savings to ensure checking has enough in it.
In theory, you should not need to scroll unless you are funding. When spending it should show you how much is in the category.
Not sure if that is of any help.
I've changed up my categories quite a bit. I've found that it's helped me to figure out what's going to be most helpful & practical for what goal I'm currently working on (or challenge that's tripping me up).
For example, just starting out I honestly had no clue about money I had, needed, or what I really was spending it on. So I needed to have lots more categories that were painfully specific: every current and future bill/expense I could possibly think of got its own category. I put the due date in the description and assigned goals to each to make sure I was saving up enough money.
I realized quickly that with this type of list it was easiest to have things sorted by when they were due--weekly, then monthly, then annually, then savings--with the due dates in chronological order. That worked because my highest priority was making sure I was funding every item in full and on time.
As I got more wiggle room financially and paying these items became automatic, the long list was too cumbersome. I didn't need to focus on each bill or due date anymore because I was always reliably funding them on time. So I combined them into their general categories (insurance, subscriptions, repairs).
I still struggled with how I was handling "fun" money, so I made that more specific. Instead of just "fun", I used about 5 different categories -- 3 to describe goals (entertainment, education, travel), 1 for impulse buys, and the other "upcoming events" so I could make sure I was saving up for plans I'd made in the future. This worked because my goal now was learning to prioritize my discretionary spending according to my personal interests/aspirations instead of spending purely on impulse, so categories helped me quantify those values and let me recognize when I was "robbing" myself.
Right now I'm trying to build up savings and reach more long-term goals, so I'm yet again shifting things around.
TL;DR: have as many or as little categories as you want if they help you reach your goals or develop the spending habits you want. Don't worry about whether they're "traditional" or not--just if they're effective. And don't be afraid to mix things up later as your priorities shift.
It's not about how many categories other people have, its about how many categories work best for you
I have 8 top level categories - 4 I interact with frequently, and 4 I don't
The four I interact with are:
Weekly Spends (e.g. groceries)
Monthly Spends (e.g. rent)
Yearly Spends & Savings Pots (e.g. Christmas)
The four I don't are:
Credit cards (I only have one CC left and it doesn't carry a balance, it's just for large/online purchases)
Wish List (when I start funding one, it moves to Savings Pots)
Old/Defunct Categories (some people use the "hide" function for these but I prefer it this way, when I make a new budget I'll delete them)
Weekly Spends has 10 categories
Monthly Spends has 10 categories (although one subscription is on its final month)
Dog has 4 categories
Yearly Spends & Savings Pots has 26 categories
Vacation has 1 category (I'll get round to expanding it once I'm a month ahead maybe)
Wish List has 6 categories
Credit Card technically has 2 categories, I closed one CC but cant get rid of or move that category? But its hidden down at the bottom so doesn't bother me unless I look at it
Old/Defunct Categories has 5 (soon, 6) categories
That's a total of 64 categories
And it could be 264 categories if I wanted it to, as long as I find it useful
Focus on what works for you, not what works for other people :)
Pineapple Gal said:
As far as what I put into the One Month Ahead category, do you only put in the amount needed to cover your monthly expenses? I ask because I have a lot of categories related to saving and paying down debt...
Every penny that comes in this month goes into the Income for Next Month category. At the end of the month, after your last income event has happened, or at the beginning of the next month, you move every penny from Income for Next Month into TBB and budget it out as far as it will go. All your monthly expenses, all your True Expenses/savings, all your debt payments... Everything, until TBB is down to $0.00. If you have filled all your categories and TBB still has money, then you celebrate by moving that into the category of your choice.
Now, continue the process of refilling the INM category for the current month, and at the end of (or beginning of next) month, you repeat the process. If you don't have quite enough money to cover all your expenses/savings/debt paydown/ etc. one month, then you make the call as to which one has least priority, and you short it, because you didn't make enough money last month to cover it.
Not a huge deal if you have a lot of categories. This is what we have been using for the last 7 years on YNAB and largely using for 20+ years prior to that in excel.
Food & Groceries
Car Maintenance & Oil Changes
Car Tire Replacements
House & Yard
Financial Advisor / Lawyer's Fees
Health Insurance OOP
Big Ticket Items
K-12 School Activities
Homeowner's, Boat & Umbrella
Electricity & Gas
Water & Sewer
Internet & TV
Principal & Interest
Real Estate Taxes
Car Replacement Savings
Pineapple Gal said:
Is it okay to send all my money straight into TBB and fund as far into the future as it gets me, or should I hold it in a category like that? Is the paycheck category key to truly being a month ahead and funding all at once?
Don't do that. Do no more than one month ahead, preferably passing through your next month income category, if necessary. Budgeting out too far will quickly lead you to have to make constant edits of sometimes merely pennies and greatly increases the chance you will find a Red TBB within a week (Stealing from the Future).