Excessive Granularity and Budgeting with a Spouse
My wife and I have somewhat different philosophies on money management, budgeting, and so forth, and I'm looking for some advice (possibly advice that it'll be hard for me to hear) on how to balance things out.
I'm a data guy —I want to be able to break things down and see exactly where everything goes, and I get a little too much enjoyment out of categorization and statistics. What this typically means is that when I'm in charge of building out the budget, it ends up having a lot of categories. (The same thing always used to happen with other tools as well; I have a problem.)
For the last year or so I've been trying to work around this in a way that doesn't feel very YNAB, but sort of works OK. Basically, I've identified a few main category groups (Food, Work, Auto, Wellness, etc. —stuff like that), and grouped all of my more granular categories under those. Each group also has its own TBB category ("Food TBB", for example), and that's where the budgeting starts. At the beginning of the month, we fill in each of those Sub-TBB categories with an amount based on priorities, average spending, etc. In theory, all she has to look at is the list of Sub-TBB categories to know how much money we have left for each. When I log our spending (it's just me that does that part), I categorize everything into the more specific categories (like "Dining Out", "Groceries", etc.) and move money from the Sub-TBB category into those to cover it as it happens.
The main advantage of this is that I can get the kind of reporting I want. For instance, if we're spending more than we want to on Food, we can look at the more detailed categories and see that Dining Out is very high relative to Groceries, and maybe discuss eating out a bit less.
There are disadvantages, of course. First off, it's complicated. Even I can feel that, and I'm the one who likes it this way. Second, it takes us out of the pure YNAB model, which doesn't seem to encourage using category groups in this way —I feel like "pure YNAB" uses category groups on more of a frequency model, like covering your monthlies first, then your less regular "true expenses," and so forth. I don't really have the option to do that and this.
It also makes me feel like I can't really sit down and talk through the budget in detail with her, because doing so invariably results in opening up YNAB and being embarrassed about my category spam, and also risking stressing her out with that level of detail. That's really the biggest problem, because the whole point of this is that we need to communicate and agree on spending priorities.
Does anyone have any similar experiences or suggestions?
Do you have enough data that you can budget averages in the sub categories? That would allow you to get rid of the group TBB categories.
Many people have rules about what categories can be wammed from for different purposes, so if your understanding is that you can only WAM from within a category group, so be it.
Now, you're right about the fact that the current reporting lacks the ability to report in functional groups while simultaneously displaying the budget in temporal (or otherwise optimal structures for planning). For example, I have food categories sprinkled around category groups (Homemaking -groceries/convenience meals, Relationships- dining out/dates/celebrations, Fun-treats, Giving-birthdays has sometimes counted for a meal out). I've put in a feature request to be able to select or regroup for the report screen so I can see food through a different lense if I want to. No luck so far.
However, YNAB is a budgeting app, it's purpose is to help plan and make decisions in the moment according to the plan (or change the plan a necessary), and it's reallya useful tool for communication with a spouse. Therefore, I set mine up to optimize the budget screen instead of reports. You can always export to Excel and have a hey-day playing with data in many more ways than are available in YNAB reports.
Play with temporal/functional for planning structures of the categories you have. (Make a fresh start and rename the archived back to the original, rename the new one to Sandbox to save typing). It took us several times of trying things out before we found the best option for us.
Luckily, if you keep the categories and just rearrange within groups, it's very easy. Also luckily, if you end up combining categories, YNAB has fixed the process for doing so!
When I first started YNAB, I primarily had temporal Master Categories (Everyday, Monthly, Quarterly, Annual) with some functional category groups (ex: Finances which contained IRA contributions, monthly investing, and other things I can't remember).
About 6 months in, I rearranged into functional category groupings such as The Home, Vehicle/Transpo, Finances, Medical, Giving & Celebrating, and some other stuff. Everyday still exists and it contains Groceries, Eating Out, Admin, and Reimbursables. I have about 70 categories under about 10 groups. I don't find it particularly complicated to work with because in reality, on a regular basis, I am spending out of Groceries, Eating Out, Clothing, and Personal Care on a day to day basis. Most things in The Home and Finances are handled by scheduled transactions that just need to be double checked. Stuff in my other categories are happening on an occasional basis. So yeah, my medical category group has a complicated structure, but since I only have 1-2 transactions per quarter, it doesn't particularly matter. OH ALSO - I budget the exact same amount to about 95% of my categories every month so that's simple too.
I budget alone though so I get to make things as complicated or as simple as I feel on any particular day.
"Pure YNAB" is just the four rules, and doesn't care about how you organize your categories. TPTB have found that starting people thinking about budgeting in terms of timeline helps - I suspect particularly with regard to saving up for true/periodic expenses.
The only part of your system that seems unnecessarily complicated to me is the category TBB. Is your wife mostly looking at the budget on the web or on a phone app?
I'm making some assumptions about your process here:
1) Your wife knows which sub categories belong to each category group.
2) You don't care what the spending within a category group looks like (e.g., you have $500 for food, but don't care if it all gets spent on eating out or all on groceries or a mix)
If 1 & 2 are true, and your wife is using the web app, you/she can collapse the category groups. You still get the information on how much is available to be spent when the items are collapsed, and it would remove the need for you to have the sub-TBB category.
If she mostly uses the app, you can't do the collapsing, and I don't think you can pin the category groups at the top, so I'm not sure I have an answer here.
I'm the more granular budgeter in my household, but I'm also the spender, so it works out. My husband just asks me how much we have to spend on "x" when it comes up, I look at the budget and tell him. Sometimes it's broader categories like "food" more often he's asking about a specific purchase.
Hi there, Forest Green Viper ! One compromise that occurs to me is that you could use some sort of tagging system in the memos of your transactions. This would allow you to search, and then use the Selected Total feature to get the data you are looking for while keeping the budget side of things a bit less overwhelming for your wife.
Either way, I applaud your efforts to find a way that works for you both!
Forest Green Viper I like your openness here. Something I've learnt (the hard way) is that my way of doing things is a preference, not the 'right' or 'wrong' way - this is a broader life lesson for me not a budgeting one. And even if I am 'right': people do think differently and if I want them to be engaged / involved / work with me, I have to find a compromise that works for them as well as me. It sounds like you've also learnt this at work, etc.
I'm single these days, so haven't tried YNAB with a partner. However, in reading some of the stuff on budgeting for couples in YNAB on the forums, the idea of my way being a preference is an important idea to hold onto. The ideal budget is a budget that both of you are willing and able to use and find useful not the 'perfect' one which you create.
So you have a few choices as I see it:
1/ simplify the budget and adopt one of the suggestions above (eg. export into excel or use tags) to get the data you want outside of main budget.
2/ take primary ownership of the budget and let your wife enter her purchases only. Then you can move at will and produce some reports for regular budget meetings.
The third option is to try to change and micromanage your wife to do it 'perfectly' which probably won't work. It may also lead to disagreements and behaviour on both your parts which is completely opposite to your goals.
We do something similar for our joint spending money but only for this category group. Our categories in this group are:
- Spending money
- Coffee beans
- Theatre tickets
- Event tickets
- Live sport tickets
- Ring fence for restaurants
The real categories have different names but that's essentially what they are.
We budget the same monthly amount into the spending money category each month and don't care what it is spent on as long as the total is fine. If it's not we will move money from personal spending money.
There are two reasons for these additional categories. The first is to ring fence money so that we don't, for example, spend all of the money on coffee shop brunches when we have an anniversary meal planned. All actual joint restaurant, eating out or takeout is recorded in spending money, the category purely helps us make sure the money is there when we need it.
The others are there for reporting purposes as well. We want to see in the graphs how much we are spending in these categories. The coffee beans category looks odd in this group. It is a new addition because one of the outcomes of COVID was that we invested in decent coffee making facilities at home whilst our local coffee shop was closed. We didn't want to absorb the extra cost in our groceries category and the alternative is to go to the coffee shop which goes into spending money so this is where it sits (for now). We need the extra category both to set outside the costs and to monitor the spend.
My start point each month is to put £250 into the spending money category and £nil in the rest so it is equivalent to your TBB category. We don't, however, care what gets spent in the individual categories as long as the total doesn't exceed that £250 (unless it is a specific decision and money is moved from elsewhere). Once the rest of the budget is set I go back to this category group and will move money into the other categories if I know something is coming up. Otherwise the movements are done as you've described. The decision on whether we can go to that play is based on the £ left in the spending money category but the tickets are recorded in the theatre tickets category and the money is moved from the spending money category to cover it.
It works very well for us in this group because it is entirely discretionary spending. We played with food out being in a food category but moved away from that in the end. There's no right answer on that one. My food spending could actually go into any of five categories spread across 4 groups so there is a little work if we want to identify all food spending. However, we consider 90% of our eating out/takeout to be discretionary so it fits better for us in our truly discretionary spending groups.
Great post Forest Green Viper .
We've gone back and forth with category area groups like (Food, Work, Auto, ect) and category type groups like (Monthlies, Variable, Fixed).
We are going back to category type groups. Here is the new plan:
Variable categories we use to limit ourselves, and only budget what we want to spend under for the month
- Household Goods
- Restaurants & Treats
Variable categories we grow and can use at any time throughout the year
Categories that are 1 time purchases or a periodic set amount (or close to the same)
- Phone Bill
Here are some advantages and disadvantages of both systems
Category Area Groups
+ Can do reporting for categories (like Car, Food, ect)
- Have to spend time and energy thinking about the groups
- Messy (lots of category groups to open and close)
Category Type Groups
+ Everything is grouped according to frequency of use
+ Can close the fixed category when out spending (reduces clutter and makes it easier to find things)
+ Don't have to spend time and energy thinking about groups
+ Reporting allows you to focus on how 3 main areas are changing over time (what can we do our monthly variable spending is going up?)
- Can't see category areas in your reporting
Anyways, hopefully this at least provides some ideas. We are in the same boat as you guys -- trying to figure out a good system that works. Best of luck.
dump the whole thing into excel where you can slice and dice it to your hearts content.
For daily basics, I think you are adding an extra step with the "sub" TBB. It sounds like you decide the overall umbrella category amount (FOOD) and then she breaks it into Groceries, Eating Out, etc. Since you are the one entering all the transactions and have set up category groups, she should be able to look at the available for the overall group.