How to deal with negative balances not being able to be rolled over

Hello, I've been searching on this for a few hours and although I have found a few answers that are close, I did not understand them well enough as I am new to YNAB. I am trying to get off of mvelopes.

Anyway - The issue I have is that I used to carry over negative balances pretty regularly as overall, my account has plenty of cash.  For example, child care expenses balance peaks early June and is about empty by Labor day.   I know what auto maintenance has averaged over the last 10 years, so I budget that.  Car breaks down twice in two months in January and February, making this category balance negative.  I'm not concerned as there is still money in the overall account and the Auto Maintenance will fill back up over time.

So, how is this dealt with typically?  I see people reference using a buffer and then reversing it the next month.  1) Are they creating a category called buffer?  and 2) how do you know what to reverse?  Meaning, can I go into the "buffer" category and see that $XX was moved to Auto Maintenance?

 

I'm fine with moving money around to make everything >= 0 for the month, but since I know really well what my expenses are over time, I want to make sure I keep the appropriate budgeting/funding for each category.  


TIA.  J

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  • Coral Screwdiver said:
    I'm fine with moving money around to make everything >= 0 for the month, but since I know really well what my expenses are over time, I want to make sure I keep the appropriate budgeting/funding for each category.  

     Consider that if your category has gone negative, it means you did not budget and accumulate an appropriate amount in that category prior to spending. There's nothing wrong with that. It just means you guessed wrong and sometimes you just have to change your priorities. Cover the overspending from other categories and move on.

    Like 3
  • Thanks for the reply.  How does a person take a longer looking view of budgeting in YNAB?  Meaning, using the budgeting example I listed above: I guessed wrong on the car and moved some money from Child Care over to Auto Maintenance. I now know that Child Care will certainly end up short that amount in September.  Is there some way to accommodate that other than me tracking it manually somewhere?

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 9 mths ago
      • 1
      • Reported - view

      Coral Screwdiver take the money from a lower priority category. Moving money around between high priority categories will just result in endless whackamole. 

      Like 1
      • SteveBaker
      • Pink_Tiger
      • 9 mths ago
      • 1
      • Reported - view

      Coral Screwdiver 

      As nolesrule said, best idea is to get your categories funded where you don't run out. If, as you say, there is plenty of money in your account, then you have something else over funded. 

      If what you do works for you and you want to keep doing it, which is perfectly fine, then I would suggest using the notes field on the Category. When, in your example, you moved money from Child Care to Auto Maintenance,  just add a note such as "borrowed $200 from Child Care" on your Auto Maintenance category. When you move the $200 back to Child Care, remove the note.

      Like 1
    • Hi Coral Screwdiver !

      If you know you need a certain amount in a category by a certain date (such as the full cost of Child Care in September), you can create a Goal for your Child Care category. With a goal in place, YNAB will prompt you to budget a certain amount so you reach that goal by the date selected. 

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  • I'm like you.  I build up a ton of money in various categories.  Gas I have a ton of money. Some months I don't spend much and other months I spend a ton on road trips.  House repairs too.  So if I spend a ton in unexpected house repairs and go negative I don't worry about it as that category will fill up over the coming months and i'll be out of the negative.  And there's plenty in my account to cover it as i'm not living paycheck to paycheck.  So I want negatives to pull from next months category like in YNAB4 rather than the to be budgeted.  That just creates way more work for me as I have to go through it every month and adjust these things. 

    Some things I do work to cover every month if I go over such as groceries.

    And a goal wouldn't apply as i'm not saving to a certain amount.  I'm happy to let my home improvements category(and others) build for all eternity as I know they'll be needed forever.

    I also hate how the new  YNAB handles credit cards and I have to enter them as checking accounts as I pay them off every month but that's another topic.  I miss seeing several months of budgets on one screen.  Now it's the current months budget and a bunch of numbers I don't care about, much less efficient. For me the new YNAB is a lot more work than YNAB4 and i'm looking for alternatives.  I just wish it offered more flexibility.  I want to love it so bad!  But...ugh, frustrating.

    Like 1
      • Agent99
      • Working to Get Smart at budgeting, finances and life
      • Agent99.1
      • 9 mths ago
      • Reported - view

      Green Wrench  I agree with your comment 1000000%!  That's why I am continuing to use YNAB4.  I don't want the extra work of nYNAB and my budget is working quite well.  Why upset the apple cart?

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      • mamster
      • mamster
      • 9 mths ago
      • 1
      • Reported - view

      Green Wrench Two issues here. I'm going to take them in reverse order.

      Green Wrench said:
      And a goal wouldn't apply as i'm not saving to a certain amount.  I'm happy to let my home improvements category(and others) build for all eternity as I know they'll be needed forever.

      I use a Monthly Funding Goal for categories like this. It doesn't have a deadline or maximum amount; it's for categories that you want to fund the same amount (or more) each month and accumulate indefinitely.

      Green Wrench said:
      o if I spend a ton in unexpected house repairs and go negative I don't worry about it as that category will fill up over the coming months and i'll be out of the negative.

      You're right—as long as you have plenty of money in your budget, nothing bad will happen if you do this, in the sense of overdraft. It's still not a good idea, and here's why.

      Because each dollar can only have one job, when you go red in a category, you are borrowing money from other categories. You can do this explicitly by moving money from another category to cover the overspending. Or you can do it implicitly by letting the red ink stick around. The problem with the second approach is that it makes it hard to see what tradeoffs you're making when you overspend the category.

      A budget without overspending is clear: You can cover all of these liabilities right now with the money you have. A budget with overspending is foggy: I know I can't cover all of these liabilities right now, but I'm not going to decide now which category I'm going to take the money from; I'll do it later, maybe months later. (And yes, you are taking money from other categories.)

      Why does this fogginess matter? It matters because you're ducking one of YNAB's best insights: that forcing you to see the opportunity cost of your spending decisions in real time leads you to make much better spending decisions. People who start using YNAB often report a few months later that they've never had so much money in their checking account. This is one of the key reasons why. Allowing overspending to stick around from month to month breaks this. Spending money now and figuring out how to cover it later is what a lot of us were doing pre-YNAB. Coercing YNAB into supporting this behavior is not going to make you happier or more financial secure months or years down the line.

      Having to move money from your emergency fund or other categories to cover home maintenance costs sucks. It also reflects reality in a way that helps you plan, save, and spend better. It helps because it sucks.

      Like 1
    • mamster 

      mamster said:
      I use a Monthly Funding Goal for categories like this. It doesn't have a deadline or maximum amount; it's for categories that you want to fund the same amount (or more) each month and accumulate indefinitely.

       How does this differ than just a standard category with a set amount going in every month?  I'm not sure I understand the need to treat this sort of thing as a goal?  Seems redundant?

      As far as the rest, i've never had so much money in my checking account! And by going red in categories it's always been clear to me what's what.  If I try to cover one category from another i'd have to track what I pulled from and the amount so I could put it back as the months roll by.  Either way i'm putting a set amount of money back in to some category and the result ends up being the same for me but with more work in the new YNAB.

      I've been quite happy and successful essentially taking loans from myself.  So i'd much rather go negative in a category and not take money from other categories to cover and leave it that way.  It will get paid back by what I have budgeted for that category every month and if that's negative for awhile i'm happy with that.  I've done it this way for 8+ years.  This is primarily for those unexpected expenses.  You've budgeted for them but they end up being larger than you could have anticipated.  It's ok, i'll get it paid back over the next few months. If I have to pull from other categories to cover it screws everything up.  I sometimes do that but I try hard not to.  I'd rather have one category off than many.

      I may go over in dining out one month. I want it to subtract from dining out for the next month.  That's the price I pay for eating out too much this month, less dining out the next.  This isn't something I allow often though.  If that overage comes out of to be budgeted for the next month it negatively impacts ALL categories and not just dining out.  Unless I adjust the dining out budget manually to account for this.  And that's what I would do and that's what takes more work in the new YNAB.

      I understand what you're saying but that just doesn't work for me.  It's more work on my part and it's harder for me to see what's going on.   I understand the developers philosophy but I wish they'd still give us the choice.  I can see how if you aren't disciplined how it could get out of control.  I've been incredibly successful doing it my way.  I haven't had any overdrafts nor have I paid any credit card interest in the past decade.  I've saved more than I ever have before and have had very few negative surprises in my budget.  This is the best way i've found to "roll with the punches".

      Like 1
      • mamster
      • mamster
      • 9 mths ago
      • Reported - view

      Green Wrench Using the monthly funding goal makes it easy to Quick Budget and also easy to see whether I moved money out of that category this month.

      I get where you're coming from now. I would still caution new users not to do it this way, because it's too easy to just mimic prior bad practices with this approach, but clearly that's not what you're doing.

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  • So, how would I handle this: let's say I bought something locally (something that he can't get where he lives) for my brother for $145 the end of this month.  I put that in an "Unallocated Temporary" category until I see him early next month and get the $145.  Instead of transferring things around from other categories, it makes more sense to me to allow me to carry that -$145 over one month if I chose to do it. 

    While I'm new to YNAB (still in the trial and an ex-Mvelope user), I've been using an envelope system since the early 1990s and this is one thing that I think may be missing here that I had in Mvelopes.   That's not to say that Mvelopes is better- version 5 is far worse!

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 9 mths ago
      • Reported - view

      Rick I'm certain it makes sense to a lot of people. But YNAB will not allow it.

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    • Rick You have to manually do it.  You can show a negative in there but when the new month starts it's going to cover that out of the to be budgeted.  So then you'd go back to that category and put in the negative value again.

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      • Rick
      • Mvelopes to YNAB Convert
      • ricka47
      • 9 mths ago
      • Reported - view

      Green Wrench OK - that's not that big of a deal, thanks!

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    • Green Wrench This is a great idea, I think it solves the issue for both types of people. I also need the ability to go negative as you have mentioned but I agree with the dangers. If you want to go negative you can but it makes you do the extra work.

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      • dakinemaui
      • dakinemaui
      • 1 mth ago
      • 1
      • Reported - view

      Sky Blue Deer The negative budget entry to restore the "score" is not seamless when you're also budgeting to the future. This will cause TBB in the prior month to increase (become nonzero). If you're looking at a past month later on, be mindful that you must leave that money in TBB.

      Realistically, if you have sufficient money, it seems easier to make the one time adjustment so that you fluctuate between $X and $0 rather than $Y and -$something.

      Like 1
  • Green Wrench , did you ever come to a resolution with this? I'm in the same boat as you - looking for a replacement for Mvelopes. And I want to be able to run a negative balance. These are my thoughts exactly. "I understand what you're saying but that just doesn't work for me.  It's more work on my part and it's harder for me to see what's going on."

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  • Turquoise Trombone said:
    It's more work on my part [to not run a negative balance]

    This statement suggests that you may not understand. To carry a negative balance in nYNAB requires you to manually reset the negative balance every month. To offset the category to stay positive requires a single budget entry. (I'm assuming spending is the same in each case.)

    I get that you want what you want, but you'll be continually fighting the tool. So your statement is exactly backwards -- it's actually less work to use the program as designed. And I am quite certain that YNAB will never change this. Your budget, your call, of course.

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  • Okay thank you. I'll look elsewhere for what we need. I'm sad, because YNAB has everything else I wanted.

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    • Turquoise Trombone We'd hate to see you go, but we understand if YNAB isn't what you're looking for at the moment.

      A fundamental element of the YNAB method is working only with the money you have right now - carrying negatives in your budget makes it easy to hide that those dollars were spent.

      If you have $100 in Groceries, but -$50 in Dining Out, you truly only have $50 Available to spend on Groceries, not the $100 that's shown. We want to make sure your budget always reflects reality, so YNAB is more honest in the information it provides, and is better aligned with the YNAB method.

      We know this is a transition, but we hope you'll give it a fair try! :)

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    • Faness That's the issue right there. We do have the money. It's all in a sinking fund, which encompasses several things. But sometimes we go over on one thing.

      Here's what happened last month. 

      We have a 'new (used 😉) car' fund. 
      We have a home improvement fund. 

      In November, we had about $2000 saved in the home improvement fund, but our project went over budget about $500 thanks to even more rotten joists that my husband had anticipated. Now I could move money from the car fund, but that money needs to stay allocated. We just want to delay our next home improvement project until the home improvement envelope builds back up. Incidentally, all the sinking funds are sub-categorized under a 'sinking fund' category, so we can always see how much money is in there total, so we know we're not overspending what is available.

      We also have an emergency fund, and we don't carry a cc balance, if that makes a difference.

      I really would like for YNAB to work for us. With the above scenario in mind - could we roll with it?
       

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    • Turquoise Trombone said:
      Now I could move money from the car fund, but that money needs to stay allocated

      And YNAB's position is that you MUST do so, because that money is GONE. Keeping the Car funded as you desire hides the reality that you can only spend a given dollar once. 

      Make no mistake about it -- this use case is exactly why YNAB has taken a hard stance on this. You cannot make fully informed decisions with Monopoly money in your categories, and YNAB will do its darnedest to correct that erroneous condition.

      (FWIW, I think they feel there may be some wiggle room with reimbursements, but they've not done anything on that front because of the bleedover into this use case.)

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    • Turquoise Trombone After covering the home improvement project, if you went that day to purchase a car, there'd be $500 less available than what was there before the project. While you can delay the next project and put those funds back, at that exact moment, those funds aren't there to be used. It's best to cover the overspending and then replace those funds when you're paid again. You could even cover the amount from the emergency fund if you'd like, but those extra dollars were spent from some category and your budget wants to know where you prefer to take them from (even if only temporarily until more income is received).

      Like 2
  • Thanks for all the comments and the help. It's not going to work for us for this ONE thing. Faness , there would be money, because that sinking fund really one quite large envelope, just with subcategories. It's not just those two things. 

    Anyhow...I'm bummed. Thank you again for all the help. 

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