Categories Hacking

So, I am running YNAB with roughly 60 Categories, and felt at the beginning that I was quite clever with the groups and the categories.... but now I have to say, I am wondering about a better way. How do you group your categories? Is approx 60 is the norm, or the exception?

 

Looking for better ways! :)    

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  • The right amount is the right amount.

    You should have categories for different things either for awareness or control purposes. Control is a little more obvious (I only want to spend X amount dining out), but awareness is moreso a judgement call. You could just as easily lump all your subscriptions into a single category, but sometimes having them separated out can serve as a reminder that a specific expense is optional and may be impeding on your overall priorities.

    We have somewhere between 80 and 90 categories currently.

    Reply Like 5
    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 8 mths ago
    • 1
    • Reported - view

    I have about 40. I started with more, then started to look at the amount of time and reasons for the splits, and deleted some categories. The nice part is a choice to automatically recatorgize all the transactions into another cat. 

    Reply Like 1
  • Have however many categories helps YOU. 

    Lumping together subscriptions, for example, makes my brain freak out, so there has to be a separate category for each one. For other people's brains, having one category per subscription would make them freak out, so they have one category for all of them. Don't try to hit an arbitrary number. If the categories you haven't don't work for you, try something else out. 

    Reply Like 1
  • It just depends what works for you.  Why do  you think there might be a better way? 

    I find it helps to have quite detailed categories if it tends to be a tricky spending area that I want to monitor and control closely.   

    For example I divide the month into five weeks for spending in three areas: groceries, social and fun money.  Those three things appear five times each in the budget (Week 1 Category Group has the categories Week 1 Groceries, Week 1 Social, Week 1 Fun Money and similarly for Weeks 2, 3, 4 and 5). 

    Other of my categories are quite sweeping because I can't be bothered to separate them out and I don't feel any need to.  

    This works for me, and something completely different will work for someone else. 

    Is there something you don't like about the way you're categorising things now?

    Reply Like 1
    • Pikayo Well, the reason why I think there is a better way is simply because it is my first attempt at YNAB... and well most of the thing I do in my life are never great at the first try! :)  I guess I want to have the right strategy, and I think it is easy to use a Less than Optimal method. At the moment, my challenge is to remember the priorities of categories to pay as the month evolve.... which makes your proposition of Week 1 to 5 quite interesting ....  But I do agree that what works for you may be different for me an others. Again, its a learning exercise for me. :)

      readinggurl101 & nolesrule -> Yup I did follow both of you on the advice on subscription (bundle) as it makes it easier. I do not want necessary too many categories but I want the flexibility and the view in the reporting. But I get it; it is not about getting a specific number, but the right number of my needs. And well, they "work" now, but I do feel they control me more than I control them.... (yup, it is weird I know). 

      Reply Like 2
  • If you not a month ahead, most people will use temporal groups: Immediate Obligations, True Expenses, Etc. Some even use Week 1, Week2, etc. to help them budget since they can't fund the month at once.

    If you're a month ahead -- and therefore budgeting with month-sized chunks -- it may be useful to switch to functional groups: Housing, Transportation, Living, etc. Transportation, for example, might have a monthly loan payment, but also true expense categories for new tires, repairs, and auto insurance.

    You can certainly do functional groups when budgeting piecemeal with each check, but it's harder to easily identify which categories go with which check.

    Reply Like 3
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • Reported - view

      dakinemaui I'm going to try the week 1, week 2 idea for car gas, groceries, laundry and pet supplies. It seems like extra administration, but I'll give it a go knowing I can also delete the categories later. 

      Reply Like
  • When the topic of category count has come up in the past, my recollection is that 60 is below the average. Really, though, use however many you need in order to a) control spending as you see fit or b) ensure funds for <whatever> will be present when you need them (avoid accidental spending).

    Related to (b) is ease of budgeting. A category per bill is trivial to budget, and Goals can do the math for you. Combining True Expenses like Amazon Prime, Nat'l Parks Fee, Online Backup, Costco Membership, etc. into a single category will require some math to figure out how to fund that without coming up short (or tying up more money than necessary).

    There isn't a goal for the latter (combined category) case -- though I encourage you to request one with an email to YNAB. The example I've used in the past is a birthday category ($20 in Feb for Sally, $50 in June for Joe, $120 in July for Dave & Sue, $30 in Dec. for Ricardo, etc.)

    Reply Like 2
    • dakinemaui Thanks for the feedback. I did some bundling and fortunately for me I was using excel in the past and I have decided to keep the data accurate in it in parallel. So any changes in some of those fixed expenses are also updated in Excel, and I simply does a Sum of all the items. So that part is easy, but would love to get it in YNAB. I'll get that feature request done. I actually copy/past my subscription info in the Notes Section of the category so I have a clear view ...

      As for the number of 60, I can easily imagine. Obviously I will not aim for an higher number, but a better classification. I guess this is where I need to put my mind around this.

      Reply Like
      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 1
      • Reported - view
      Eric Poulin said:
      I simply does a Sum of all the items. So that part is easy

      While it is easy, it's also "wrong", at least in the sense it ties up too much money. (There's little difference between adding things up in Excel and having multiple, single-outflow categories in YNAB. They both tie up more money than necessary.)

      If you doubt this, just consider that in every month, at least N-1 categories will have money in the naive multi-category approach. In the optimal approach, there will be at least one month during the year in which the balance is $0.

      That's why YNAB needs to implement the optimal computation in a Goal. Unlike all the other goals, it's not something someone can work out in their head. Until then, at least 99.9% of users will use the equivalent of separate categories -- which absolutely will ensure sufficient funds are present -- but will also ensure there is less money in the rest of the budget.

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 8 mths ago
      • Reported - view

      dakinemaui 

      dakinemaui said:
      That's why YNAB needs to implement the optimal computation in a Goal. Unlike all the other goals, it's not something someone can work out in their head. Until then, at least 99.9% of users will use the equivalent of separate categories -- which absolutely will ensure sufficient funds are present -- but will also ensure there is less money in the rest of the budget.

       This is true, but there may or may not need to be a need to optimize. It really depends on the floor difference and the needs of the individual budgeter.

      Personally, I've never bothered with the optimization approach, because the optimized amounts are small relative to the overall budget, and I prefer the individual category awareness. But that's just me.

      Reply Like
  • I have around 60 - I too have been trying to minimise the number of categories I have. I'm not liking it though - I am slowly adding more and more. I am going to ditto what everyone else has said - whatever works for you. 

    dakinemaui said:
    There isn't a goal for the latter (combined category) case -- though I encourage you to request one with an email to YNAB. The example I've used in the past is a birthday category ($20 in Feb for Sally, $50 in June for Joe, $120 in July for Dave & Sue, $30 in Dec. for Ricardo, etc.)

     I completely agree! This NEEDS to be a thing!

    Reply Like 3
    • Justin I hope you have done a Feature Request! :) I just did!

      Reply Like 1
      • Justin
      • JDthebushwalker
      • 8 mths ago
      • Reported - view

      Eric Poulin I did! within the first 48 hours of signing up to nYNAB in fact!

      Reply Like
  • dakinemaui said:
    Related to (b) is ease of budgeting. A category per bill is trivial to budget, and Goals can do the math for you. Combining True Expenses like Amazon Prime, Nat'l Parks Fee, Online Backup, Costco Membership, etc. into a single category will require some math to figure out how to fund that without coming up short (or tying up more money than necessary).

     Which is why I have more than double the number of categories Eric Poulin has. Each subscription gets its own category under the master category Subscriptions. I don't want to pay for AAA only to find that now I don't have enough saved up for Plan To Eat, for example.

    Reply Like 1
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • 1
      • Reported - view

      bevocat we used to have AAA, but on renewing one of the operators told us the could activate benefits in 15 mins, so they said you could cancel the membership, and only reactivate a years worth when you needed it. Just an idea.

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 8 mths ago
      • 1
      • Reported - view

      Ben K. Keep in mind that AAA states that they may charge a fee when providing roadside assistance in conjunction with activating a membership. They do not specify the fee amount anywhere, so it may or may not be worth it. And for benefits above the initial tier there is a 7-day waiting period, so long-distance towing would be out.

      Reply Like 1
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • Reported - view

      nolesrule ok, I guess things changed.  Maybe to operator told too many people. Thanks. 

      Reply Like
    • bevocat I did that at first to have a Category per Subscription.... and I felt overwhelmed with this, but then again I did this in my first week using YNAB. I guess I am still in my learning phase at the moment, and trying to figure out what is the most efficient way. Oddly enough, some have suggested having Week 1 to 5 above, and I could see that assigning these subscription in the weeks they are supposed to be charged could work well. Food for thoughts !

      Reply Like
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 8 mths ago
      • Reported - view

      Ben K. Yeah, I live in Texas and long-distance towing is a must. Can't be waiting 7 days for the Plus benefits to kick in! Also you probably lose any longevity discounts and I've been a member for almost 25 years.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 8 mths ago
      • Reported - view

      bevocat I have you beat at 27 years. My parents put me on their AAA account when I got my drivers license, and when I got married opened my own and added my wife. Some years I don't use it at all. Other years we need roadside assistance or use some of the other benefits. And there are still a lot of business that offer discounts at the register or with reservations. The AAA hotel rate is often the best available rate, and you can still accumulate loyalty points by booking directly with the chain. And my one collectors weakness, Hard Rock Cafe (I've been to 58 since joining the pin collectors club), still offers 10% discount on all purchases.

      Reply Like
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • Reported - view

      bevocat ok. Makes sense. 

      Reply Like
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 8 mths ago
      • Reported - view

      nolesrule Oh noez! I thought you were older than me! Just better off, I guess. 😄

      Reply Like
  • I would say that your number of categories will change over time. As you get away from living paycheck-to-paycheck you will find some of the distinctions are really not necessary any more. Best  example would be your utilities. In the early days I had separate categories for electricity, water, sewer and trash, gas, internet, etc. I also had separate categories for each charity I gave to regularly and also separate categories for Netflix and Hulu

    You might need this when you are living paycheck-to-paycheck because you have to time which paycheck goes to fund each based on when it has to be paid. But when you get to budgeting this month on last month's income those distinctions are not important and lead to more work. 

    So those examples I mentioned are now just lumped into categories for Utilities, Charity, and Entertainment.

    Reply Like 3
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 8 mths ago
      • 3
      • Reported - view

      dalewking But you don't need to feel compelled to combine them if you don't want to. I've been technically buffered from day 1 because I get paid monthly. I never had to time funding my categories because I have been living off last month's income for 20+ years. I love the granularity so it's easier to see at a glance if I want to cut back somewhere temporarily, where and how much.

      I totally get why some people want to collapse them though.

      Reply Like 3
      • dalewking
      • dalewking
      • 8 mths ago
      • 2
      • Reported - view

      @bevocat  You don't have to feel compelled. It basically comes down to whether the cost of the extra work to budget multiple categories is out weighed by the benefits of having them split. When living paycheck to paycheck it can be due to having to time them. After a bit of monthly budgeting there may not be and you are just causing yourself extra work.

      For the record I have 38 categories, although some are for some one-time expenses and a few will go away in a few months.

      Reply Like 2
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 8 mths ago
      • Reported - view

      dalewking I like that idea, all one color socks (if you've seen my sock post)!

      Reply Like
  • Pikayo said:
    For example I divide the month into five weeks for spending in three areas: groceries, social and fun money.  Those three things appear five times each in the budget (Week 1 Category Group has the categories Week 1 Groceries, Week 1 Social, Week 1 Fun Money and similarly for Weeks 2, 3, 4 and 5). 

     That doesn't seem very workable to me. Are you saying that you have multiple grocery categories based on week? Then you have to associate an expense with the right one? Then if you don't use it all in week 1 it isn't available in week 2?

    I also am not comfortable with budgeting categories like groceries, eating out, gasoline, and school lunches on a monthly basis. I hated those times where you run out of money before the end of the month and you got paid but that money wasn't available until next month started. Also putting the full amount in at the beginning of the month led to it being spent faster.

    So what I do is that I fund those categories with each paycheck and not monthly. I get paid every 2 weeks and when I enter my paycheck it is a split transaction with so much going to each of those categories and the rest going to TBB. I have it as a recurring transaction and just adjust the amount going to TBB if the paycheck amount varies. So I don't actually use the budget screen to fund those categories (except when I have to cover overspending).

    Reply Like 1
    • dalewking  Thanks for the feedback. I'm also paid every other week so I have to plan accordingly. Most of my confusing which caused me to create that post is around prioritizing where the income should go first. That "annoyance" will disappear the day I have 30 days in "age of money",  but I am not there yet. Well, I would be there if I could put in YNAB my RRSPs (I believe the US equivalent would be 401k), but I use YNAB for regular transactions. 

      On my side, when a paycheck come in, it goes into TBB, and I simply budget each categories based on the monthly goals. If I understand you correctly, when you receive a paycheck, you split in in many categories at once?

      Reply Like
      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 7
      • Reported - view
      Eric Poulin said:
      That "annoyance" will disappear the day I have 30 days in "age of money"

      No, that annoyance will disappear when you can push all income into next month's area. AoM can easily be less than 30 days at that point, but it could be well more than 30 days.

      When you structure your budget to allow you to budget everything in next month's area, you obviously don't need it in this month's area. That means you can just queue up your checks in a holding category (to get them out of your way) until you've received them all. Then release those funds back to TBB. Bam -- a single, month-sized, "effective" paycheck. The fact your income actually arrived piecemeal is immaterial to the budgeting workflow.

      Reply Like 7
    • dakinemaui Fantastic feedback. Make a lot of sense now I have to say! Much thinking to do, but it does make a tons of sense.

       

      Thanks again!   

      Reply Like 2
  • Hi Eric Poulin !

    Great question! You'll find a lot of ideas here. 😀

    We recommend that you take the time to customize your categories in YNAB to represent your priorities. They should be specific enough to guide your spending, but not so specific that your budget becomes complicated. Ask yourself:

    What will I do with the information I gain from adding this category? Will it help me change something?

    In our YNAB Help Docs, you can learn how to add and customize your categories. If you need additional inspiration, there is an older thread here with more suggestions!

    Reply Like 2
    • Vibrant
    • No more counting dollars, we'll be counting stars
    • vibrant
    • 8 mths ago
    • 1
    • Reported - view

    I love this Whiteboard Wednesday from a few years back: https://youtu.be/3Rvp_wr9Flo

    I currently have ~ 60 categories as well, but my list is probably vastly different than yours. 🤷

    Reply Like 1
    • Vibrant Thanks for the video!!! I like the the idea of only measure what you want to change/control... and be careful about the noise! Great Stuff!

      Reply Like
  • dalewking said:
     That doesn't seem very workable to me. Are you saying that you have multiple grocery categories based on week? Then you have to associate an expense with the right one? Then if you don't use it all in week 1 it isn't available in week 2?

    It works for me!  If I don't use it in Week 1 I can move it to Week 2 or anywhere.  The idea is to guide me to not use the whole month's grocery budget too quickly.  It helps me be frugal and creative every week, as I go along.  I'm paid only once each calendar month.

    Like I said, something different will work for someone else.  It's just an example to show that detailed categories are useful if you want to keep a very close eye on things.  Fewer, more general categories are fine if that works for those areas.

    Reply Like 4
      • dalewking
      • dalewking
      • 8 mths ago
      • Reported - view

      Pikayo I may still be misinterpreting you, but I would tell you how I would handle it.

      I would have a Grocery spending category. That is the category that trips to the store are recorded against. In addition I would create one or more Grocery Fund holding tank categories. When you get paid you budget into these holding tanks and probably directly into groceries for that week. Then at the appropriate times of the month you transfer the balance from the correct holding tank into the Grocery spending category.

      Personally, I would find by weeks a pain in the butt since they don't line up well with month boundaries. I would probably base such a system on roughly 10 day cycles. If I were paid every month on the last day of the month and say I wanted to put $600 a month in groceries, I would have a Grocery spending fund and Grocery Holding (10th) and Grocery Holding (20th). When I got paid I would put $200 in each. Then on the 10th and 20th I would transfer from the appropriate holding category to the spending category. But if you want to figure out how to that on a weekly basis, that is on you.

      Reply Like
      • Pikayo
      • Pikayo
      • 8 mths ago
      • Reported - view

      Hi dalewking  I've been doing weeks for a long time and I really like it.  I think it's horses for courses, as with all YNAB categorisation.  It depends on each individual, their lifestyle, their priorities, their concerns and what works for them. 

      I'm not trying to persuade anyone else to use the categories I do.  Just want to illustrate that you can have detailed ones for areas where you personally find it helpful.  😊

      Reply Like
      • dalewking
      • dalewking
      • 8 mths ago
      • 1
      • Reported - view

      Pikayo And I am not trying to talk you out of weeks. The important thing I was trying to convey is that you have a single Grocery category that transactions are recorded against which is separate from the holding place to prevent you from spending it all too quickly. The way I interpreted what you said was that you have multiple categories that groceries are spent from and when you enter a grocery transaction you had to choose from whether it was a week one grocery transaction or a week two transaction. You should just be able to say it is spent in groceries and the holding place is separate from the spending category.

      Reply Like 1
      • Pikayo
      • Pikayo
      • 8 mths ago
      • Reported - view

      dalewking yes, your interpretation is right.  I allocate spending to either Week 1 Groceries, for example, or Week 2 Groceries.   This doesn't matter to me, I don't think I need holding categories. That would actually take away some of the structure. I like having weeks sorted out at the start of the month.

      It's just the way my mind works.  I'm not naturally disciplined or organised.  If I must plan, I find it better to plan for small bundles of time.  It's easier for me to find motivation to keep to a plan for seven days (or less) at a time. 

      I find it easier to visualise it in weeks, then I can be more realistic and prioritise better.   

      I find it too abstract to keep to a single number for the whole month when I'll be making several different grocery trips (whole other topic: don't drive, shops a few minutes' walk from my house, like to buy fresh food = multiple grocery trips and that works for me too) . 

      A single number for the month doesn't give me any idea how much to spend each time I go grocery shopping unless I'm constantly breaking it down in my head - and I don't want to keep thinking about it so I break it down in the budget and it's sorted.

      If I start going off track with pacing myself for a whole month, I'll see that straightaway because I've divided it into weeks.

      The structure and the bite-sized pieces just make it more manageable for me.

      Reply Like
      • dalewking
      • dalewking
      • 8 mths ago
      • 2
      • Reported - view

      Pikayo 

      Pikayo said:
      I find it too abstract to keep to a single number for the whole month

       I wasn't talking about budgeting the whole month at a time. I was just splitting out the category you spend out of from the categories to hold the money until you want it available in groceries. I really don't think you are understanding the tweak I am telling you.

      So you have these categories:

      - Groceries Week 1

      - Groceries Week 2

      - Groceries Week 3

      - Groceries Week 4 (and possibly a Week 5)

      And when you go to the grocery store you have to decide am I recording this as week 1 or week 2. Problems with that: First it's a pain in the butt at the time you enter transactions and you want entering transactions to be as pain-free as possible or you won't do it. Secondly, if I don't spend all of week 1 in week 1 that unspent amount is not available in week 2, 3, or 4

      What I am saying is that you add one category to that which is just called Groceries. When you go to the grocery store that is what you record the transaction against. You never record spending transactions against the Week categories. You still budget into the Week 1-4 categories as you did before except that when you get to week 2 you move the balance of Groceries Week 2 into Groceries. Advantages, easier to enter transactions and if you don't spend all of week 1 it is available to be spent in Week 2, 3, or 4.

      You would probably find that you don't actually need the Week 1 category as you would probably be moving it to Groceries immediately after budgeting to it, but I am not sure how you handle the mismatch between weeks and month boundaries.

      Reply Like 2
      • dakinemaui
      • dakinemaui
      • 8 mths ago
      • 1
      • Reported - view
      Pikayo said:
      I find it too abstract to keep to a single number for the whole month

      dalewking  is pitching a single category that is always for the "current" week. Every week you just add to that single category. You always check the same category when you go to the store. Automatic re-use of any remaining funds. Automatic coverage for small overspends in any week except the last one. (It's covered by the infusion of the next week's funding.) Only one category shows up in reports/averages. Same category for recording transactions (e.g., always Groceries), so mobile entry is simplified.

      I did this approach for a while for groceries years ago, and I like it much better than duplicate categories under different week groups. Fewer categories as well. I even had mine set up to automatically add the additional funding each week.

      EDIT: I see by one of your later posts that you seem to be tiring of the topic. Sorry to have jumped in without reading that far.

      Reply Like 1
    • Vibrant
    • No more counting dollars, we'll be counting stars
    • vibrant
    • 8 mths ago
    • Reported - view

    BTW if you want pure data, the YNAB forum on Reddit (reddit.com/r/YNAB) has a pinned thread where people share their category configurations. It's refreshed every couple weeks so you'd have to search a bit to find the older ones.

    Reply Like
  • Eric Poulin said:
    dalewking  Thanks for the feedback. I'm also paid every other week so I have to plan accordingly. Most of my confusing which caused me to create that post is around prioritizing where the income should go first. That "annoyance" will disappear the day I have 30 days in "age of money",  but I am not there yet

     The important thing when getting paid twice a month is to think in half months and get to the point where you are what I call half buffered. You basically get paid 2 times a month and half buffered is when the check you get in the first half of the month funds the second half of the month expenses and the check you get in the second half funds the first half of next month. That will make budgeting easier.

    When at that point I used a separate monthly spreadsheet to plan my budget. I had the categories listed in one column and then how much I need for each for a month in the next column. Then I had a column for each paycheck, the 2nd one from the previous month and the 1st one for the given month. You then allocate the money between the two paychecks to fund the monthly needs. My 2nd paycheck column was set up to just be the monthly amount minus the 1st half values. Then for the paycheck column there was a remainder at the bottom. You have to allocate so the remainders are not negative. You start with your once a month expenses. They have dates within the month they are paid so they dictate which half funds them. For many categories you would ideally just divide it in half.

    As you start doing this you likely will find that the two halves are way out of balance, which leads to your budget being a roller coaster ride. It is best to try to balance them. Usually it is 1st half heavy cause that is when the mortgage is due. There are things you can do to balance them. First off categories whet you are saving for a longer term expense can be moved to the half with more leftover. I had some monthly expenses where I was simply able to get the due date changed. I had a loan payment that was due in first half and I scraped together an extra payment and made a payment in each half of this month then in all following months I made the payment in the second half of the month.

    The nice thing is eventually you will get to a month with 3 paychecks and suddenly you can fund all of next month on last month's pay and you can list the spreadsheet. I just sort of arrived there this month since my first half paycheck was on the 1st.

    Let me know if that was not clear.

    Reply Like 1
  • I have some categories that some might find unique. 

    I have asset categories. I have a category for each car that I own...Lets say "2002 BMW" This allows me to do a report that shows how much money I have spent on...how much I have in it. When I sell the car I can very easily know how much it cost me to own it over a certain period of time. The "2002 BMW" category would have initially been funded by a generic "New Car" category that I was using to save for the car. I don't put money into the "2002 BMW" category on a regular basis, I fund a more generic "Car Maintenance" category. The funds from this category get dispersed to the "2002 BMW" category (or other vehicle categories) as necessary.

    Other asset categories would be something of significant value...ie, Grand Piano or Boat. I'm sure this is a bit silly but I love being able to at any one time know how much money I have ultimately invested in something.  

    Reply Like 2
  • dalewking said:
    And when you go to the grocery store you have to decide am I recording this as week 1 or week 2. Problems with that: First it's a pain in the butt at the time you enter transactions and you want entering transactions to be as pain-free as possible or you won't do it. Secondly, if I don't spend all of week 1 in week 1 that unspent amount is not available in week 2, 3, or 4

     I don't find either of things.  Recording it as a Week 1 or Week 2 transaction gives me no pain at all.  And if I don't spend all of Week 1 the amount can be available in another week if I want it to be, I can just move it there.  Or I can choose to do something else with it.

    I'm not having any problems with dividing into weeks, I really like it.  Maybe your suggestion will work for someone else though.  Which comes back to the main point.  Everyone doing what suits them, so any way of setting up categories is OK.  Let's leave it on that happy YNAB note.  😄

    Reply Like 2
  • As everyone has been saying, use as few as you can, so your budget and categories give you the most valuable information, for you.

    I know all that, and it's great advice.  The problem is I have 170 categories. That's way too many.  And every time I go through my budget, I have a good reason for every one of them.  The only thing I can say, in my own defense is that I only have 14 category groups, and run a business.  They are all included in my budget template, so I don't have to think about each one every month though it is nice to know I have money in most of them, if I need it.  Even having a problem limiting them.  I keep coming up with great ideas for new ones. 😱

    Life, and budgeting, is much easier with fewer categories and category groups.  Wishing you the perfect amount for yourself, and that it isn't too many.  

    Reply Like 1
    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 8 mths ago
    • Reported - view

    I was explaining YNAB to my long time co-worker, now like almost 10 yrs and two different companies. He doesn't budget at all, just checks the bank balance, pays things when he can, and I don't ask too many questions. He asked what the min. categories could be. I said, you could start with the non-negotiable (rent, water, electric, gas, auto ins, trash, etc.) and toss everything else into one large category! He liked the idea. (I probably just lost all my new YNABer friends right there). I said, that's not a bad way to start, like at less than 10 categories, and then add when he wants to track something separate (house project, vacation, etc).  If he starts there, I'm sure he'll build up to more categories over time. 

    Reply Like
  • It really depends on you.  What is your WHY?! Why are you budgeting, What are you working for?  then categorize towards that.  My wife loves to have a lot of categories for her fun money Group. Me on the other hand, I only care about how much I have left so I only have 1 category for fun money.  Overall we have 41 categories and that has been the lowest since starting YNAB in '12.  Over time, we have found that some things aren't going to change like life insurance, car insurance, umbrella insurance, and home insurance so we put them all in one category, total the yearly spending and divide by 12.

    Good luck!  Stick with it too because it works!

    Reply Like 1
  • Hi dakinemaui , no that's OK and thank you for taking the time.  I'm just not sure I'm being understood, especially that I don't feel any negatives with what I'm currently doing.  

    dakinemaui said:
     Automatic coverage for small overspends in any week except the last one.

    This is what I'm trying to avoid.  I'm a chronic overspender.  I need a structure that gives me the least possible risk of that.   I don't want anything not-yet defined or not-yet budgeted. 

    I also don't want to have to keep parcelling out the funds through the month.  I like dividing it all up at the beginning then knowing exactly where I am for the next 28 to 31 days.  No muss, no fuss.

    I think I must have a very different mindset.  Moving remaining money from the week and having 5 x the categories are non-issues for me.   The issue for me is my woeful lack of self-discipline and motivation to keep to a plan.  😵  The weekly split gives me a clear, clean way to spread the spending out over the month.

    Splitting the grocery budget categories into weeks was actually a suggestion from a YNAB workshop that I did, and I found it worked so well for me I started doing it with the other two categories as well.  

    I'm very happy with how I'm doing things now, really.

    I'm also a bit worried about taking the thread off topic.  Hopefully it's not.  I think dalewking 's suggestions and your further explanation will be very useful to some people when they're thinking about how to categorise.  

    Reply Like 3
      • 73driver
      • 73driver
      • 8 mths ago
      • Reported - view

      Pikayo Set up YNAB exactly how it best works for you. I guarantee you that I have more categories now simply because my life is more complicated now with a bunch of kids at home. I have a long list of hidden categories that I used at one point or another but are not applicable to my budget today. Find what works for you and enjoy the results.

      Also...My wife and I each have a spending money category that gets funded every month. My wife tends to leave her money in YNAB use it for starbucks or little things here and there. I tend to take the cash out and put it in my pocket and use cash for the little things here and there.

      Reply Like
      • Elle Jay
      • Ellejay
      • 7 mths ago
      • Reported - view

      Pikayo I think this comment could have been written by me!! I split my grocery budget too but I do it outside of YNAB (Monzo pots). Maybe I should start bringing it back in to track my spending dips and lows over the months. Do you notice a difference of spending more/less at certain periods?

      Reply Like
  • 34 Categories but I've been doing this for many years.
    The categories changes over time based on my current needs.  Others have already mentioned this but I'll share my experiences just for fun.

    There's no "one twue way" of budgeting and when you find someone who claims they found it, politely walk away.

    Here's some examples of how I do it:
    Car:  I have one car and use that as a primary with subs for insurance, gas, maintenance, other (which can be car wash, fuzzy dice, etc).  This let's me budget explicitly for insurance, averages for gas, monthly contributions for maintenance, and target amount for other.  Meanwhile, I know how much my car costs me.
    Later on, I will very likely move all things Car into one category because it's just a car and I understand the expenses well enough not to care anymore.  But it's a newer car and it has very different expenses than my last one.  I'll roll it under something like Routine expenses.

    House: Similar to car.  Primary category with a few subs for taxes, HSA, Repairs, Utilities, and subscriptions for services that feed the house (internet, netflix, spotify).  Here Utilites is averaged, Repairs is a target total, and the rest are fixed monthly rates.

    Memberships: I have one category for everything that's a membership outside of House.  They don't change much and are highly predictable (usually monthly).  If I want to break it out, I can look at the monthly expense details - it's far too boring to create categories.

    Phone: I have a variable monthly bill with enough money tucked away to buy the next big phone when it comes out.  I simply add my monthly average +/- a little bit to keep it at/near a targeted value (cost of one new phone).

    Dog: All things dog are in one category with a target to cover most vet bills and I add the monthly average+/- towards a target value.  I don't care to break it down into subs because I don't care.

    Reply Like 2
  • Cadet Blue Nomad said:
    Car:  I have one car and use that as a primary with subs for insurance, gas, maintenance, other (which can be car wash, fuzzy dice, etc).

     I have mentioned it before in other threads but I do not use the category groups to indicate things like car, house, etc. I instead group them by how they are spent or budgeted. It makes budgeting easier. So I have groups like this:

    • Variable Spending: these are things that are going to be spent many times and that I budget for every 2 weeks (each paycheck) rather than monthly. This includes things like Dining Out, Groceries, Gasoline, School Lunches
    • Irregular Spending: these are things that may not get spent in a given month, Entertainment, Home Maintenance, Home Furnishings, Auto Maintenance, Fun Money, Haircuts, Gifts
    • Monthly: Things spent pretty much like clockwork every month, Mortgage, Utilities, Insurance Payments, Monthly charitable donations.
    • Multiple Months: things that you build up over months to pay in a lump sum on a given date, License plates, AAA, Book Rental, Summer Camp, YNAB subscription
    • Savings: Things you build up for some unknown date in the future, Vacation, Car Replacement, College, Retirement, etc. The last 2 categories are where I put money before transferring to 529 or IRA, but I will have 2 in college this fall so college also tries to build up.

    The pain point is that you have to mentally filter out the group when looking at transactions in the register. It would be nice if YNAB supported an extra field that you could assign categories to group them by on the budget.

    Reply Like 1
    • dalewking I have both.
      Categories for specific things that I want to know how much they cost: car, house...
      And the rest is kind of aligned like you: regular, irregular, montly....
      There's no one type of category that sticks with me.  I just use both and probably others as well.

      Reply Like
  • 73driver said:
    I have asset categories. I have a category for each car that I own...Lets say "2002 BMW" This allows me to do a report that shows how much money I have spent on...how much I have in it.

     Usually in YNAB you would do those as Tracking accounts to reflect how much worth you have so that they get reflected in your net worth. E.g I have a tracking account for the value of my home. My cars are not really worth that much and the value is too variable for doing that for me.

    Reply Like
      • 73driver
      • 73driver
      • 8 mths ago
      • Reported - view

      dalewking again the great thing about YNAB is the ability to do it how I like it. The cars are a depreciating asset and I like to keep track what it actually costs me to own it and then when I sell it what overall the car cost me over the period that I owned it...just me.

      Reply Like
    • dalewking This is way too much work and way too subjective.
      You don't really know the value of your house until you sell it.

      For this level I have a spreadsheet for the major assets and just use one number for YNAB for my spreadsheet.  But this is something I do so rarely it hardly merits attention in YNAB.

      Reply Like
  • Cadet Blue Nomad said:
    This is way too much work and way too subjective. You don't really know the value of your house until you sell it.

     Not sure how it is so much work. I basically created a tracking account with one transaction to reflect the approximate value. Done. I am not really trying to track the value over time, just to have the approximate value to offset the mortgage in net worth graphs.

    In my case it wasn't even that subjective. A couple years ago I was shopping for a HELOC and ended up with 2 appraisals for the same amount. At the very least you have what you paid as a starting point. Or you could use Zillow to get a grossly inaccurate figure.

    I also did it with some property I inherited. There I had the value it was appraised for in the estate. As parts have been sold off the proceeds from those sales are recorded as transfers from the tracking account to my bank account.

    And as I said I wouldn't bother with auto value. Half the cars we own are technically totalled in that there are repairs that could be done that cost more than the car is worth, but they run so we drive them. I might try to put some kind of estimate on them if I had loans on any of them. There you have things like Kelly Blue Book (full disclaimer, I work for a company that is a subsidiary of Cox Auto which owns KBB).

    Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 mths ago
      • 1
      • Reported - view

      dalewking I bought my current house a couple years ago so I just use my purchase price and don't mess with any adjustments to value in its tracking account. I never put my cars as assets before but I recently bought an expensive car for cash and really didn't want to take the ding in my net worth all at once so I added it as a tracking account. I've had it for about a year and a half. After a year, I adjusted the value to the KBB value at that time. It's kind of cool to see the depreciation over time.

      Reply Like 1
    • Superbone I understand the idea behind it but I have some reasons not to do this.
      When you give every dollar a job, that implies that every dollar can be spent (liquidity) fairly soon.
      Having assets tied up in a car isn't very liquid or very accurate.  You have a KBB value that is a guesstimate of the value but is hardly something you can budget on.

      This is similar to having stocks as part of your budget.  It's not really money until you sell the stocks and every month you have to deal with the ups/downs of the Market.

      As for that hit against your net worth, I've been doing the following:  I take the new car fund and move it offline to a tracking account.  That way I can budget $xxx every month as a contribution and not worry about the "hit" when I buy a new car.

      Tracking assets is handy for a business because they can take out loans against the assets but that's not a common practice in the private sector with the exception of home equity loans.  I find it a lot of bothersome work when I don't really care what the value of the car is.  I can't write it off on my taxes or take a loan out against it, so the information has little functional value for me.

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • Reported - view

      Cadet Blue Nomad 

      Cadet Blue Nomad said:
      When you give every dollar a job, that implies that every dollar can be spent (liquidity) fairly soon. Having assets tied up in a car isn't very liquid or very accurate.  You have a KBB value that is a guesstimate of the value but is hardly something you can budget on. This is similar to having stocks as part of your budget.  It's not really money until you sell the stocks and every month you have to deal with the ups/downs of the Market.

       You would do this as a tracking account, not as a budget account.

      Personally, the only non-financial asset I have in YNAB is my house as a tracking account, still at the purchase price from 4.5 years ago. And it is offset by the mortgage. In fact, that value was funded by the transfer of a down payment out of the budget + a tranfer out of the mortgage account.... just like in real life.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 mths ago
      • Reported - view

      Cadet Blue Nomad Of course, it's a tracking account. It's not in my budget. It's sole purpose is for net worth. Just like my house. It's not liquid either but it is part of my net worth and offsets my mortgage.  Retirement accounts are also not liquid but part of my  net worth.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 mths ago
      • 2
      • Reported - view

      Cadet Blue Nomad BTW, I do have stocks from my taxable account in my budget. They are very liquid. I can sell them quickly and have the funds available in a few days. I've been budgeting in YNAB for 10 years so I know what I'm doing. To each their own.

      Reply Like 2
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 3
      • Reported - view

      Unlike Superbone I'm not comfortable having stocks in my budget. Instead, I have money in certain categories that I send out of the budget for investing, which currently includes my next car at $300/month (I have at least 7 years). I keep all of those categories in a single group so I know how much to transfer, and then just do a split transfer. Currently I could buy 2 of my present car in the 2019 model with the brokerage account and have money to spare, so I don't have a problem with it.

      I do debate with myself if I'm holding too much cash sometimes. I think about at what point an Income Replacement fund becomes redundant and a cash drag.

      Reply Like 3
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 mths ago
      • 3
      • Reported - view

      nolesrule I've only been doing it for about 4 months now but I'm liking it. To do it though, I think you need to have a large category balance that can easily take the full market swings. My category is called Freedom Fund. It gives me the freedom to do pretty much anything I want financially. I'm also sending money to my new car fund in the amount of $200 out of every paycheck fortnightly. (I just bought my current extravagant vehicle with cash 1.5 year ago.) Having this taxable brokerage account in my budget also makes it easier to deal with my Vanguard VMMXX which I started using instead of online bank accounts.

      Reply Like 3
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 mths ago
      • Reported - view
      Superbone said:
      makes it easier to deal with my Vanguard VMMXX which I started using instead of online bank accounts.

      I meant to add, thanks to you nolesrule ! It's  a better return than the best online banks that I've seen anyway.

      Reply Like
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