Covering Overspending ...

So can I cover overspending by adding it to the "to be budgeted" category?

I understand this puts it in the red (-) and is frowned upon, but I dont get monies until later

I dont have available funds to transfer the overspending to any other categories!

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  • If it's red (cash overspending), then you already spent that money in the real world. Reduce some category to reflect the reality of that missing money.

    If it's yellow (credit overspending), you don't have to cover it, but it is an indication of new debt without a plan to pay it off. You want to minimize doing this, and hopefully cover it when you get more money.

  • Because the money in your YNAB budget is based on the money in your bank accounts, if you truly don't have any available funds to cover the overspent categories, that can only mean two things:

    1. You've done the overspending on credit and are adding to your debt. In that case, simply leave the categories overspent; don't try to cover it from To be Budgeted!

    2. One or more of your bank accounts is in overdraft. In this case, you still shouldn't cover the overspending from To be Budgeted, but if you have access to an overdraft line of credit, you'll want to add that money to your budget as a deposit. If you have an account that's allowed to simply live in overdraft, please let me know—I know there's a good thread on the forum about how to handle that situation, and I'll be happy to hunt it down and link to it.

    • Matthew love to learn more as I’m so confused between budget amounts and real world bank account balances!

    • Matthew also how do I handle lines of credit accounts?  I have an overdraft checking that deposits funds if I am short sometimes. Do I create a credit category for this? Or regular category

    • Turquoise Hail Bring the overdraft LOC advances in categorized as To Be Budgeted and budget where needed. Create a category for the repayment of that debt. No extra accounts needed, just the checking account. Keep it simple!

    • dakinemaui So dont create an off budget account with the negative amount to keep track?

      • dakinemaui
      • dakinemaui
      • 1 mth ago
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      Turquoise Hail I wouldn't. You have that information from the website.

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