Effective budgeting without 'micro-budgeting'

Hi fellow budgeters.

I have been using YNAB for about a year now and over this year I have found it very difficult to keep an exact record of all my transactions.

When I pay for something, I always try to keep the receipt and fill it into YNAB, but I always find that my bank balance is always less than what YNAB says it should be, i.e. I don't accurately capture all my expenses.

The result of this is that I often have to create a "Manual Balance Adjustment" payment so that my funds available on YNAB reflect my actual bank account. This then influences my budget since I then have under budgeted categories.

Long story short: Is there some more effective way of budgeting that is more robust to me not being able to exactly capture all my expenses? Something I coin 'micro-budgeting'.

Thank you in advance.

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  • Are you missing entire transactions or just you recorded $19.24 and it was actually $19.95? If you are missing whole transactions, why can't you just compare your YNAB register against your bank register and fill in the missing transactions.

    Unfortunately I don't have a better answer than to figure out what is necessary for you to adopt a new habit. How do you remember to brush your teeth or take a medication? For some people, having an assigned time each day that they update YNAB seems to work.

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  • Hi jenmas ,

    The problem is missing entire transactions. But usually small transactions like cash payments that I don't have a record for.

    I find it hard to believe that anyone can exactly record ALL of their transactions, for example using two quarters to pay at the laundromat. I am curious if there is a budgeting strategy that is more robust to sometimes not capturing such small transactions (that add up over the month).

    I agree that it might be adopting a new habit, but to be honest I try very hard to capture all transactions, but sometimes I miss out on a few.

    Perhaps a good strategy is to make a category where I budget for these 'missed transactions'

    Regards

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      • jenmas
      • jenmas
      • 2 yrs ago
      • 1
      • Reported - view

      Orange Admiral (41125915e9da) I don't use much cash - literally maybe once per week so I don't have to worry about it too much. And I always make an effort to record cash transactions immediately so I don't have worry about it (Ex: while you're waiting for the washer cycle to run, pull out your phone and add the $0.50 transaction). But because my utilization is so low for cash and I reconcile my wallet once per week, I've never been off by more than $0.03, but if there's only been one transaction that week, I know exactly where it goes - that can of stress Pringles from the corner store must have been $2.83, not $2.80 because that's the only cash I've spent in the past 10 days. I've been doing 100% manual entry since 2014 and haven't had issues. But it's like building any other habit - have you successfully added a workout routine to your life? Or maybe having to give your dog a daily dose of eye drops. How did you go about creating that habit? Can you translate that to YNAB? You almost need to create the muscle memory that as the wallet goes back into the pocket after paying, the mobile app comes out to record the transaction.

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      • kuk
      • kuk
      • 2 yrs ago
      • Reported - view

      Orange Admiral (41125915e9da)  I do have such a category. Everytime I start to beat myself about 2 dollars I take a deep breath and remind myself the budgeting makes my life better even if I have to make an adjustment now and then.

      It was harder at the beginning. These days we both have a habit to put the paper receipt in the wallet.  Then I record them whenever I have to wait a few minutes --- doctors appointment, bus, whatever. Mr.kuk dumps his on my desk.

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  • If my cash is off, I make an adjustment. Bank and credit card transactions are either entered from a receipt or from checking the financial institution website.

    If it's really just a matter of a few dollars a month in cash transactions, just make the adjustment and get over it. Maybe even have a budget category for it so you are prepared in advance.

    Another option with cash is just to mark it spent when you get it, but that may or may not work depending on how many different things you use cash for.

    But if it's a matter of missing larger transactions and it's causing issues with budget accuracy, then there's really no way around making the effort to do better. Striving for accuracy is the only way that your budget will be able to work for you.

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      • LarryinLA
      • Larryinla.1
      • 2 yrs ago
      • Reported - view

      nolesrule said:
      Another option with cash is just to mark it spent when you get it, but that may or may not work depending on how many different things you use cash for.
       

       This is what we do.  I allocate the cash when I take it out of the ATM split between the categories I expect to spend it on, usually mostly babysitting.  If a significant transaction happens that ends up spending differently, I adjust the original transaction.

       

      We use to track our wallets, rounding all transactions up to the nearest dollar.  So, we didn't track change.  It was too much of a pain.  So, we stopped.  That said, we don't spend cash very often.  Perhaps you could use your difficulties as an incentive to spend less cash and think, "This always ends up making a mess of my budget, why not just not spend money right now."  You could, as they say, "Age Your Cash."  (This may be the first time I have ever though of Age Your Money in a possibly useful way.)

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  • nolesrule said:
    Another option with cash is just to mark it spent when you get it, but that may or may not work depending on how many different things you use cash for.

    This is exactly what I do - I rarely use cash, and when I do, I generally try to "spend" it right away in YNAB so I can record its intended category immediately and not have to keep track of where that cash goes later.

    Laundry quarters are my most common need for cash, so if I withdraw $20 from an ATM or get $20 cash back when I'm buying groceries, I record that in YNAB as a $20 "purchase" in my laundry category right away. Then I put the $20 bill in the bucket with my laundry supplies, to convert to quarters next time I'm at the laundromat. This way I don't have to record EACH time I do laundry, just each time I "transfer" $20 to my off-budget laundry quarter bucket ;)

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  • I use both a cash category and a cash account. I have a cash account for me but not for my husband. So when my cash account diverges from reality I simply enter a cash adjustment categorised to my cash category.

    Also, for bank accounts, my husband doesn't enter anything in YNAB so I have to get all his transactions (and some of mine) from the bank. Fortunately, we mostly spend on weekends so for us, it's enough if I connect once or twice a week: Mondays and Wednesdays usually. Then I use the file import feature of YNAB (export your bank register to QIF or whatever other formats, drag and drop on the YNAB screen and off you go). When I do that, most of the time the cleared balance in YNAB matches the cleared balance at my bank. This means I only have to clean up the payees and the categories where needed. I don't have to track missing or double transactions. 

    If you are living closer to the edge than we are, you may need/want to connect more often to keep your category balances more current.

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