New to YNAB - feel like I'm drowning in an ocean of info

I'm trying to figure out how to reconcile the way I have been balancing my checking account with the YNAB app, and I feel a bit lost...

Currently I have a spreadsheet with utilities and credit cards laid out. At the beginning of every month, I take a look at all of the bills due for the upcoming month and using the money in my checking account from the previous month's paychecks, I pay the upcoming bills and apply the rest to my CC debt. Then I take a snapshot of the current state of my CC and Loan debts and save it as a historical marker to see how we have been doing at paying down our outstanding debts. The results have been mixed - the last 10 months I have been tracking, I've only managed to pay down total debt by around 1,500 while CC debt has only gone up. I feel like I need to be tracking spending much better, but I'm completely lost as to how I do that using YNAB.

I linked all of the accounts I have been able to, but how to I input what I had done earlier today with what I should be budgeting for next month? Should I even bother or would it be easier to wait a week for everything to net and start fresh? I open up the app and look at the tables and just feel overwhelmed at all of the stuff, with no idea where to even start or how to make it gel with the info I already have...

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  • In the wise words of Elsa, "Let it go." 

    The great thing about what you've been doing is that you have a very clear picture of the upcoming bills. Super. You'll need that. 

    Now. Here's all YNAB is. 

    1. You get money

    2. You decide what to do with that money and break it up according to what you want to do. 

    3. You use that new break-up, your plan, your budget, to guide your spending. When you need to spend, you look at the plan to see if there's enough money left there. If there's not, you decide on something that is a lower priority and take money from there first. If there's not money, and there's not something lower priority, then you don't spend. 

    4. When you get new money, you go back to step 1. 

    EVERYTHING ELSE in YNAB is built in service of these three steps: Get money, budget money, spend according to the budget. Goals, scheduled transactions, importing--it's all there to support those three sequential steps.

    So you've linked accounts (and double-checked the balances which imported are correct, I hope! If not, go back and make sure), and presumably, now you have a TBB amount.  (Step 1, You get money) You need to start divvying that up by budgeting it to the various categories. "Budget" doesn't mean "spend": if you're a kinesthetic person, this is the equivalent of the age-old envelope budget. All you're doing is tucking money into an envelope. 

    In my neck of the woods, there are six hours left in 2020, so you may want to click forward to January and perform this action there. Normally, I would suggest not doing that, but you're probably at a point in the month (aka far enough along in the day!) where you're not likely to spend any money between now and next month. So click forward to January.  Use those bill amounts to decide how much to budget for bills, and do your best guess for your more flexible but necessary categories like groceries and fuel, and for your truly discretionary categories, like dining out. Don't set goals yet: put the money into the category according to how much you need for January spending. (Step 2, You decide what to do and break it up)

    You get to decide how high a priority your credit card is in your budgeting. Perhaps you want to throw a bunch of money at it first, and then decide how much to budget for dining out from what's left. Or maybe you are psychologically better motivated from knowing that for sure, you'll have $150 for dining out and are willing to make slower progress on the card debt--it's up to you. 

    Use your money to make a plan, stop working the plan when you're out of money (when TBB hits zero), then move on to step 3 and start using the plan to guide your spending. 
     

    Like 9
  • Green Piano said:
    I take a snapshot of the current state of my CC and Loan debts and save it as a historical marker to see how we have been doing at paying down our outstanding debts.

    Are you using your CC for purchases as well? If so, it should be a budget account. Assuming you don't overspend your categories (or at least reallocate funds to correct that after the fact), whatever you budget toward the CC Payment category will be net progress toward debt reduction.

    If you're not using the card, just treat it like any other bill with a category to plan for the payment in the budget.

    As for the other loans, you could make a tracking account for the combined outstanding total. (Exclude the CC if that's a budget account.) Just adjust the balance each month (right-click on the account area) and the Net Worth graph can be very motivating. Alternatively, you could make tracking accounts for each debt if that makes more sense to you.

    Like 1
  • Green Piano said:
    I've only managed to pay down total debt by around 1,500 while CC debt has only gone up.

    This sentence made me want to strongly suggest one thing that worked for me when I paid down CC debt: try to stop using your credit cards for a while until your CC debt is gone or at least until you have gotten into the swing with Ynab. Your budget won't become clear overnight. While you are setting up and reconciling your budget over the next couple weeks, unnecessary debt racked up on the credit card float may complicate things in your budget and put you behind.

    Some people follow the Dave Ramsey method and cut up their credit cards. I think that's a bit extreme, so I just tucked them away into a drawer for a while. This will force you to only see money that you currently have until Ynab is able to give you a clearer picture of what you actually have. It felt tight, but that's the reality if you are carrying consumer debt, and you may need to find creative spending solutions.

    As for your budget, you might find it best to start with a clean slate by just making sure your account balances are accurate today, even if you have to manually reconcile the balance and delete transactions from before today. Then after that, it's a good idea to start categorizing transactions coming in right away so that Ynab begins to learn what they mean to you. You can attend as many free workshops as you want, or see video courses to help you along:

    https://www.youneedabudget.com/free-workshops/

    https://www.youneedabudget.com/video-courses/

    Stay with it and the full picture of your budget will slowly come together!

    Like 1
      • RIP_MSMoney
      • FinTech Programmer
      • rip_ms_money
      • 3 mths ago
      • Reported - view

      The Artist Formerly Known As I always told people to freeze the CC in a cup of water if they didnt want to cut them up. For DR you have to truely try it out fully for it to prove itself that using CC causes you to spend more. Without an effective plan, the CC just gets away too easily. Even if you pay it off each month, you end up spending more. We saw spending drop 20% for us when we stopped using it.

      Once you have the budget philosophy down and have a good tracking mechanism in place that a CC can be safely reintroduced. Honestly ynabs approach to CC is the only way I can see it working. I was without CC for 10 yrs until we started Ynab. In 2019 we opened 1 up because ynab made tracking straight forward and less error prone.

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  • Green Piano said:
    feel like I'm drowning in an ocean of info

     This is the problem so many people have.  At its core, budgeting is very simple.  Money comes in, give it a job. Run out of money before all jobs done, must shift priorities or find way to increase income. Money left over after all jobs done then that remaining money needs to find a job - retirement, extra debt payments, donations, etc. 

    I find that people get into information overload with YNAB. They read the forums, they watch Nick True videos, etc. YNAB has FREE workshops on lots of topics including getting started.  The first and only thing that I think a new YNAB user should do is add all your accounts (I prefer almost all to be on budget which means I want to give that money a specific job because chances are it already has one in my mind). Once you add all your accounts (with the existing balance as of today as close as you know) now there is an amount in the To Be Budgeted which needs to get to zero.  Start sending that money to categories.  And if the categories (the grouping, the name, etc.) don't make sense, rename it or add a new one.  Everything is flexible so later if you learn more and want to change something it is not a problem.  That is it. You are done. 

    The things I find people struggle with the most are the following:

    - credit card handling in YNAB. It is awesome but it is different.  Make sure you understand it if you are using credit cards.  Tip - if you have a card with a balance that you want to pay off AND you are using credit cards to pay for purchases, get a credit card just for purchases and leave the balance on an unused card. Trust me, this will help.

    - the connection (or lack of) between accounts and budget categories.  There is none. Many people come to YNAB having used some sort of multiple account strategy to manage their money.  So Account A is my everyday account, and Account B is where my medical spending is saved, and Account C is where I keep my vacation fund.  Understand, there is NO connection.  In YNAB you could have a single account and things will work just fine. That said, most people have at least a chequing account for every day, a credit card, a high(er) interest savings account, and an investment account. In YNAB ALL your money is in one big pile.  It can then be sorted into accounts. Or sorted into categories.  

    - functionality in the mobile app is slightly different than in the web app.  When you are learning how to do something, make sure you are clear about whether you are using the mobile app or the web app.  The YNAB team is working on bringing more functionality to the mobile app but it will take a while because coding is hard (at least for me).  

    - you don't have to have linked bank accounts for YNAB to work.  Actually, it is better to manually enter all transactions even if you are linked. The link is to ensure you have up to date info on your bank.  Once you have used YNAB for a while, transactions will be remembered (like last time I was at Staples I categorized it to work and used my TD Visa card). So entering that Staples transaction becomes adding an amount and verifying the rest. Literally 3 clicks.  But this happens over time. Also, recurring transactions should be set up in YNAB. One click to enter them when they happen.  And goals and recurring transactions will make budgeting an almost one click event. 

    - don't use Fresh Start as a holy grail.  I have never done a Fresh Start.  I have made lots of changes to the way I manage things but nothing so catastrophic that I had to start over.  I recommend never doing one unless your life has completely changed (divorced, married, retired). There are articles about the benefits of a fresh start.  But don't make this your go to when things aren't "perfect".  Because life isn't perfect. And we also do things differently when we learn a new way of doing something.  

    - how awesome the support team is.  They have FREE LIVE workshops, videos, and the most helpful support staff ever.  Use them. Don't come onto to the forums to complain about something that you don't understand or argue with people that seem to have a contrary approach to yours.  We are a tight group, super friendly, and super nice. Many people have used YNAB for a decade or more.  Do we all think YNAB is perfect? No. Will you find something that annoys or irritates you in the software that you think should be different? Yes. So do we.  But don't try to lead a rally against YNAB.  

     

    All of that to say, keep it simple, start off slowly, get the fundamentals down, know that you can change things later so you don't need to be perfect now. 

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