Rolling over spending into the next month

I was just looking at my budget, and I can't figure out if there is a way to do this or not. I thought there was, but I'm not seeing it.

If I over spend in a category this month, but know that I'm going to get paid for something next month, I'd like that over spending to show up in my next month's budget. This would be spending on a credit card, so it's not going to put me over budget in cash flow. Is there a way to have that over spending roll over to next month?

 

Thanks!!

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  • Overspending does not stay within the category into the next month.

    Overspending in cash comes out of your TBB in the next month.

    Overspending on a credit card does not transfer the spending to your credit card payment available, implicitly increasing your credit card debt.

     

    The money's gotta come from somewhere. In real life, you can't pay for something with an IOU in a zero-sum system. You should correct for the overspending now and then make adjustments to next month's plan to correct for the changes you make now.

    Like
  • YNAB is not about "cash-flow", it's about reality of your financial state at THIS moment in time. I mean, cash-flow in a traditional sense is essentially stealing money that you intended to use on Expense A to pay Expense B and hoping you don't get caught with your shorts down. In your particular case, you simply have a temporary debt increase.

    Categorize the inflow back to the same category (so total spending = $0) and reallocate for debt reduction. (Move funds from that now higher category to the CC Payment category.)

    Like
  • Sounds like you need YNAB4.....

    Like 1
  • Hi farfromtheusual !

    Only positive amounts in your categories will roll over into the next month. Negative amounts will not. What happens to those overspending amounts depends on whether the overspending was with cash or credit.

    • If cash, that amount will be deducted from To be Budgeted in the new month.
    • If credit, the overspent amount will be represented as an increased balance on your credit card account.

    The option to carry that negative from month to month was allowed in YNAB 4 but we did away with that option because we wanted to keep your budget honest. When there are negatives in your budget, you can't trust the amounts you're seeing.

    Like
  • Faness Thanks for your reply.


    While I understand YNAB's stance on this, it makes it difficult when you KNOW there will be money coming in from somewhere, but it crosses over the month date marker, which is arbitrary anyway.
    This isn't a situation that I'm making a habit of, but it happens once in a while, and it would be far easier to track it if YNAB allowed for the option to roll the over spending across the month. Most credit cards aren't even due on the 1st anyway, so the date as a marker that doesn't coincide with anything.

    As it is, I feel like it's easier to "hide" the debt if you're over spending on a credit card by having the debt not roll into the next month. If it's credit card spending and you over spend in a category, then the category ends up at zero when the month changes, and that means you have to consciously go apply extra  funds to the credit card in order to not accrue additional debt on the card. It's way easier to ignore the debt on the card and add new funds the categories with the next income in the new month. It's essentially a free pass to start over with your categories, while the debt hides over on the accounts column.

    It would be helpful if this is a feature that could be turned on or off for specific categories.

    Hopefully Jesse Mecham  can work on some options to improve the system even more.

    Like 1
    • farfromtheusual Thank you for offering those details! :)

      When it comes to credit cards, I completely understand your point! We've been considering improvements here for how to make it more obvious when the amount Available for that credit card falls out of line with the actual account balance - so YNABers know they need to budget more to pay that card off in full. 

      We know the roll over is a big shift in thinking, but we appreciate you sticking with us! :)

      Like 2
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 2 yrs ago
      • 4
      • Reported - view

      farfromtheusual Unless you're intentionally increasing your debt, I actually disagree with you slightly. Yes, the month boundary is arbitrary, but that doesn't actually matter because if you're only budgeting money you have today, the time horizon shrinks to zero and it doesn't matter when the arbitrary roll-over is. If you have any overspending and it's possible to correct it now, do it that way so that your budget reflects reality, then adjust your budget to put the money back where you wanted it when you get the money back.

      The fact of the matter is, you absolutely do not KNOW there will be money coming in from somewhere until it's in your hands. Payroll screw-ups happen (and honestly, they seem to have spiked in the last quarter, both in people I know here and in real life). Government shutdowns happen. The guy that was going to pay you back getting hit by a bus happens. Civil unrest happens. Hurricanes happen.

      When I stopped pretending I had money that I almost have, my budget came into shape.  There's just no reason not to wait to budget that money until you actually have it.

      Like 4
    • bevocat I appreciate your thoughts. When it comes to reimbursements and spending for certain things in my business, the money comes in after the fact. At this point, that is how it works, and eventually I'll bring in enough money that it won't matter.

      It would help me in my situation tremendously if I could roll over some categories by choice into the next month.

      Sometimes credit card float is just how it works in order to keep things covered, especially with a small business. And you're totally right about the risk that poses. But you also have to do what you have to do.

      Being able to turn that feature on and off for specific situations would enable me to work with my budget in an even more flexible manner without having to remember totals from the previous month.

      Faness I hope that it makes sense as to why this should be added back in. I know I'm not the only person that has asked for it. I know it would benefit a number of people who would be able to use it responsibly. I'd prefer to have the choice to make my own responsible decision for myself than being told that some people can't use a feature responsibly so no one can use it.

      Like
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 2 yrs ago
      • Reported - view

      farfromtheusual I hear ya, and you may have noticed by now that you're FAR from the only one who has asked for it.

      I have zero ambition to have my own business (if possible, I have negative ambition!), so I won't even pretend to second-guess how you run yours. I sincerely wish you success and prosperity with it!

      Like
    • Faness This would be very useful. Do you know if this feature is planned in the product?

      Like
    • Hi Orange Song !

      We're looking into ways to better handle reimbursements, but we currently have no intentions of bringing the Red Arrow, or the ability to carry over negative Available amounts, to the online version of YNAB. 

      We'll continue to look into our options here. If you have any details you'd like to share with our Product Team, please don't hesitate to submit a Feature Request.

      Like
    • Orange Song Floating a reimbursement on a CC is pretty easy if you will be reimbursed before that purchase must be paid back.

      Categorize both the reimbursable outflow and inflow to the same category. If that category turns green, move the positive amount to the relevant CC Payment category.

      Like
  • This seems like a major oversight. I have regular business expenses that I'm responsible to cover and commonly have to wait 6 weeks or more to see that money come back through reimbursement. In the current system I have no way to track the balance of my work spending/reimbursements over time to check how much I am owed. Without this information it nearly impossible to make sense of how much I'm saving.

    Like
    • Violet Flute I don't know what your process is now, but if you categorize outflows and inflows to the same category, a simple search for that category in All Accounts will give you the pending amount owed.

      The fact you have to wait 6+ weeks before reimbursement is a separate issue. (I'm assuming you have a normal 4-week, interest-free grace period on your CC.) You have the following options:

      • Don't pay that debt off until you are reimbursed. You may incur interest.  Most people are not a fan of this, although riding the CC float will reduce that interest, possibly to $0. Riding the CC float uses the cash backing more recent, normal/budgeted purchases to pay off the reimbursable expense, then uses the reimbursement to pay off those normal purchases (possible since they were incurred later).
      • Submit expense reports more often so you will have been reimbursed before that purchase has to be paid off (thereby avoiding interest).
      • Obtain a 60 or 90-day grace period card. This will likely require your company to arrange it (even though you are still responsible for the payments). CCs are typically reluctant to give longer grace periods to individuals, but it's worth investigating.
      • Use your own money to pay off those purchases and avoid interest. That means you should carve off enough money from elsewhere in your budget for that purpose. (Budget it to the reimbursement category.) Pay the CC whenever it's due. The reimbursement then replaces the contents of the reimbursement category. This is the #1 officially recommended approach.
      Like 2
    • Violet Flute said:
      it nearly impossible to make sense of how much I'm saving.

      I must be missing something about your situation, because I find it pretty straightforward. I save by putting money in categories, and the cumulative total is in the Available column. Can you elaborate on what's not working for you?

      Like 1
  • I am in the same boat for work travel.  Although my reimbursements are quicker they can still fall into the next calendar month.  I log it as a debt when incurred and allow myself to be overspent that month, then allocate it to the debt when reimbursed.  It is not perfect, and I wish there was a better way.  

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    • Forest Green Koala You should be categorizing work expenses AND reimbursements to a Work category. Sure, let it go overspent, that just signifies new debt without the cash reserved to pay it off (which is hardly a surprise). If that Work category ever turns green, reallocate those funds back the the relevant CC Payment category.

      If the overspending indicator really bothers you, just reallocate from the CC Payment category to cancel the overspending warning in the Work category.

      You can avoid that manual reallocation step if you structure your plan (a.k.a., the budget) to reserve cash to pay off those reimbursable CC charges. For example, reallocate $X from an emergency fund (or other long-term category) into the Work category as a one-time setup. Use the cash now backing those work purchases to pay the CC bill, and the reimbursement just restores the Work category. No budget manipulation necessary. (Of course, you can always reallocate back in an emergency, but why not make your life easier in the meantime?)

      Obviously, that second approach requires that you have enough cash to simplify your process. If you can't devote enough to cover the typically sizeable work expenses, then go with the first approach. Manually reallocating funds is hardly a hardship.

      Like
  • This problem is frustrating to me. I have budgeted a specific amount in each category for each month, based on annual income. For example, $500/month for family vacation. I paid for a $2,000 (for example) vacation on the CC. I wish YNAB would just show this category as a negative $1,500 in the current month and carry that over so that in month 2 there is negative $1,000. That way, I can see exactly how I am doing against my planned spending. I have cash available to cover the whole thing now but if I do that, I have to keep track, month to month of how much I didn't spend of that yearly plan to get back to where I wanted to be. This is doable but it is not easy. Am I really missing the boat here and not understanding? I don't want to cover it now and have to manually keep track of how much I was over and then manually adjust every month until I catch up? Again, I have enough cash that I could allocate it to Vacation and cover it but then I'll have to figure out, every month where I stand on my original targeted annual spend rate.

    Further more, the current setup seems dangerously misleading. If I don't cover the budget this month it will show us negative $1500 and next month my budget will say I have $500 available again. This could mislead a lot of people because they may not remember that they overspent the previous month. I've seen lots of justification for this but I'm wondering if it has more to do with the way YNAB handles CC and a limitation in the software's ability to handle this. If I paid with an all cash account, this would work exactly the way I want it to correct? Please fix this or tell me what I'm doing wrong.

    Like
      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 2 wk ago
      • 7
      • Reported - view

      Slate Blue Hail YNAB is first and last a specific budget method. The goal of which is to have the money set aside before you spend it.

      When you have a negative category in your budget, it means you have less money in real life than makes up the sum of the money in your categories.  Cash overspending  will reduce your TBB in the next month if you don't fix the overspending. Credit card overspending will leave your credit card payment short of being able to pay back the balance. Both are obvious.

      As a prolific YNAB user who is no longer with us once said, "the money's gotta come from somewhere." YNAB forces you to acknowledge that reality.

      Like 7
    • nolesrule 

      I don't think the statement is accurate that if you have a negative category in a budget it means you have less money in real life than makes up the sum of money in your categories. I can have lots more money in "to be budgeted" than I have summed up in my categories. If I'm wanting to have a specific average spend rate in a category, like vacation (usually things that aren't purchased on a regular basis), the budget should be able to go negative and then go back up just like a cash overspending would. The cash is available in my to be budgeted category afterall.  I may have even allocated it to spending for the next 12 months if I have enough money. In that case, a credit card account is acting just like a cash account. The cash is there to pay it and I'm not going negative if I overspend though I might not have the money for my budget 12 months from now unless I catch up. Am I just dumb? This seems obvious??

      Like
      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 2 wk ago
      • 3
      • Reported - view

      Slate Blue Hail But it is true, because YNAB is a cash allocation system (aka envelope budget). Let's look at this scenario:.

      You have $200 in your accounts. You put $100 in groceries and $100 in vacation.

      Then you spend $150 from vacation so that your vacation category is overspent at -$50. Let's look at what remains....

      Your grocery category still has $100 in it, but your accounts only have $50. You can no longer use your categories for accurate spending guidance.

      While this may have been a simplified scenario, this truth scales to your entire budget. When you have a category with a negative balance, the sum of all your positive balance categories is greater than the money that you have.

      P.S. - To Be Budgeted should be zero at all times except for the extremely short period of time between when you've received the income and when you assign it to categories. YNAB Rule 1.

      Like 3
    • nolesrule I'm probably failing at YNAB rule 1. Here is where I was coming from. I previously did not have a budget. Excited to get into YNAB, I looked at the yearly income that I would like to spend and spread that out over a 12 months period and allocated it to my various categories. My income is higher than this yearly amount. I was wanting the additional income to just go into miscellaneous investments without seeing it even as part of my budget. Now that I'm set up for that, I want to put a fixed amount aside per month for those categories and to manage my spending to make sure that on the whole I don't exceed those category budgets. With that, until I build up a surplus in each category there will be times when I spend negative in some categories. I'd like to be able to look at the category the next month and say, "shoot, I'm negative on vacation, I better not spend any more there until I catch up".  As I understand it, this is exactly how this would work if I were only using cash accounts. The way it works now from a credit card, the Vacation category goes negative. If I don't cover it it will look like I have money the next month since the negative does not carry over. If I do cover it, the next month will also look like I have money unless I manually decrease the budget from the next month for that category. Since something like vacation might take several months to catch up, it's going to be annoying to keep track of how much I've kept that category under my target spend rate until I catch up.

      I realize that this might not be how YNAB was designed but it seems like a good system. I do have a complicated budget with my wife and I as the main spenders so this isn't even just me looking at this alone. I guess I could change everything to cash accounts but then I'd miss out on any benefits from reward points etc. Again, I'm not spending a minimum amount. I'm allocating a fixed budget for my family and saying we need to stay inside those numbers even though we actually have more income. I do also appreciate the active forum here and your feedback.

      Like
  • The GUI needs to really HIGHLIGHT in your CC payment that is it short BECAUSE you balances in the month prior are short.  This is not an obvious thing in the GUI and is not intuitive at all until you go digging into supports forums like this.

    Like 1
    • Silver Falcon I agree with this. This is the flaw that I see in the fact that it doesn't let you roll over the "red arrow" like it used to.
      It is NOT obvious to me that the payment I have set up might be less than my spending, or that I am carrying debt.

      Zeroing out categories can easily let me "hide" underneath the debt, which is only really apparent on the credit card account page.

      So I see both sides of it. If they're not willing to bring back the red arrow, then at least making it easier to understand the difference between what you owe and what you have on hand to pay for would help.

      Like
  • Slate Blue Hail said:
    I can have lots more money in "to be budgeted" than I have summed up in my categories.

     Not if you're following the YNAB rules...  Rule #1.  Give EVERY dollar a job.  To Be Budgeted is not a job.  You need to stick them into categories.  If you have extra, create some "savings" categories and stick the remainder in there.  True Expenses, like Car Repairs, biannual insurance payments, health care expenses, etc.  Those dollars should not be sitting in your TBB.  Give them a job.

    Like 4
  • Slate Blue Hail said:
    I realize that this might not be how YNAB was designed

     This is the answer. Can't really add much to this. YNAB is a specific budgeting system. It's not designed the way you are trying to use it.  So either you need to conform to how it works or you should use a different tool that works with what you want to do.

    Like 6
    • nolesrule   This is exactly what I was going to say...

        Slate Blue Hail while I understand your concept, you are attempting to squish a different philosophy into a system that wasn't designed to handle it. While I will agree with you (to a point) that it would be helpful to be able to leave categories over spent beyond the month marker, in your case, I disagree with your usage.

      The whole point of the concept of YNAB is that you have the money BEFORE you spend it. I appreciate your use of averages, I love that, and I use it all across my budget. The difference is that I set aside the average before it is needed, not after the fact.

      For example: Our power bill is highest in winter with the heating costs that we deal with. Once I had 1 year of power bill records in YNAB, I checked the average in the spring. We pay barely $100 in the spring and summer months for our power bill, but my average was $140. So in spring I started to set aside $140 regardless of what the bill was. Come winter, I haven't had to bat an eye at the bill when it's been close to $200 for the past few months. The money is there because I was functioning on the averages, but only AFTER I had built up enough to keep it funded.

      I appreciate your desire to average out your spending, but getting ahead enough in the category that you HAVE enough for spending is important to work with in order to prevent categories from going over spent (which is debt). That may mean that if you plan to take your vacations in the fall, and you're just starting out budgeting, you'll have to put double the "average" in the category so that you're funded up enough to cover it outright by fall. If you choose to only enter the average, then you'll be carrying debt for the next 6 months after your vacation, and likely adding interest to the cost of the vacation, to boot, which makes it all that much more expensive. And then you'd be repeating the cycle next year.

      There ARE certainly situations when you HAVE to spend money that you do not have budgeted, and are unwilling to fund from other categories (or just plain don't have the funds available to use from another category). It happens to all of us at some point, particularly in the beginning. And that's totally ok. My BF currently has a $388 bill sitting in the medical category that's over spent, but it's no a 0% interest payment plan, so I don't care that it's over spent because I'll be paying it back one month at a time.

      Like 2
    • farfromtheusual  Thanks for the reply, examples and understanding. I guess in my case, the problem is that I already have enough money for the spending but I was wanting to see a consistent draw against my funds on a monthly basis. If that meant I need to take the vacation in the spring and go negative while the funds accrue to catch up in the fall that's fine. If the budget would go negative it would give me an idea of how far I had caught up and help my pace my spending throughout the rest of the year. I could just budget the money this month and then reduce the budgets for the rest of the months but then I have to start figuring out how much to reduce them and which months to do it etc. I can make it work though I don't see it as ideal.

      And to the many people saying that YNAB just wasn't designed to work that way, I guess I get that but there is one point that I'm not understanding. From what I can tell, YNAB will reduce future months by the overage that I have in the current month if it is from a cash account. That function is exactly what I want to happen and it appears the only reason it doesn't work the way I want it to is because I am using a credit card. It also appears that in a previous version of YNAB even credit cards worked this way. I guess I'm wondering, was this really changed because it doesn't make sense or is it just a function of making the credit card stuff work? It seems like it would be nice to toggle the way each account is handled so that it could work either way. I know the programming gets complicated so maybe it isn't so easy or there is some other limitation.

      I just don't understand the theoretical difference between the cash accounts and credit accounts. In either case the budgeting works the same, with the difference being that on a cash account the cash is reduced when the purchase is made and on the credit account the cash is reduced when the card is paid. If you don't have funds to pay the card, that can be problematic but if you do, it's effectively the same thing. The liability of the credit card just grows until the payment happens, at which time the liability and the cash asset are both reduced at the same time. In either case, YNAB knows the sum of the assets (cash accounts) and the liabilities (credit card accounts) so YNAB should be able to show you how much money you have. The "to be budgeted" fund would be the cash - credit card liabilities - budgeted funds.

      Like
      • Bruce
      • Software Engineer
      • Bruce
      • 13 days ago
      • 1
      • Reported - view

      Slate Blue Hail cash accounts don't stay negative. When the new month rolls around (tomorrow) the negative from the cash account will be taken out of the TBB for April. 

      Like 1
      • MadDog
      • Navy_Blue_Pegasus.2
      • 13 days ago
      • 3
      • Reported - view

      Slate Blue Hail So, the YNAB philosophy is built on a cash basis. If you don't have the cash, it will take it away in the next month. 

      Also, I think part of the "magic" of YNAB is that it forces you to deal with your choices in the here and now. What is more important to you? Covering an expense with money from another category or letting the debt build up. When you keep rolling the debt over to the next month, you are saying "deal with it later". Later comes with a big mound of debt and no way to cover it anymore. Or, you are no farther ahead than you are now. Because many people don't have the discipline to do the internal payback. There is no external accountability until it is too late.

      It really is a new way to frame your approach. I thought I was good overall at money management. Not a huge amount of debt, both high-ish income earners, home, vehicles. Embracing the philosophy has really changed how I look at what we are spending and why. 

      Like 3
    • Slate Blue Hail I absolutely feel your pain, there are times when I would prefer to roll the debt into the next month. I think it is a valid argument (if you search the forums you'll find that the argument has been argued to death, and there are many that agree with you...)
      I'm still having some trouble wrapping my head around why you would want to "average" your spending for something like a vacation into the future, rather than the past. If you set aside money, and then use it, then you simply begin to set aside money again and build it up until the need to use it comes around again. Reporting will tell you how much you have averaged across a span of time, so there's no need to do the math on that either. I'm not sure I understand the usefulness of averaging out spending for something like vacation, which to me is pretty variable and depends on where you go/how far away it is, and what you choose to do while there.

      As for the difference between cash accounts vs credit card accounts - it's important. One will leave you in the red with major bank fees, etc, and the other will just cost you interest. YNAB is set up to focus on spending what you HAVE, not what you expect to receive later. As such it's going to alert you to over spending on the credit card as the same kind of problem as over spending cash accounts, but it does handle them a little differently because one is not nearly as disastrous as the other.

      I know that it's difficult to wrap your head around sometimes, and I've struggled with how to make various things work for me, too. The system is overall a good system, and figuring out how to use it to it's maximum effectiveness for you is really the name of the game.

      Like 1
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 13 days ago
      • 6
      • Reported - view

      Slate Blue Hail Dude, you basically just took on debt.  If you want to move forward paying $500 towards the $2k vacation you just bought on credit, then you assign $500 a month to the CC category for the card you used.  And then all you have available to pay the card will be less than the statement balance, unless you're riding the float and all that.  If you want to cover your CC balance in full, you gotta pull cash from some other category.  If you pay MORE to the CC than you have in the category, well now you just took on the cash overspending that you're looking for.

      Don't use YNAB to take on debt and then pretend you didn't.  It's not designed that way.  For most people, that's what got/gets them in trouble in the first place.  Just follow the very few rules and you'll be fine.  

      Like 6
  • farfromtheusual said:
    The difference is that I set aside the average before it is needed, not after the fact.

     That's exactly what I do.  When we had to cancel our Disney vacation last year, I continued saving my average Vacation amount each month, and by this Feb. we sure had a nice healthy balance where I could even afford some really nice extra souvenirs and meals.  Thankfully, nothing got overspent, but if it did (like in many years past :( ) , I cover it from a lower priority.  It's so simple.  I don't know why people start YNAB and then blow up their whole budget in nearly an instant.

    Like 2
    • Annieland Yes, that's the way it should work!

      Like 1
  • I will also add that in the olden days you COULD roll negative balances forward (the famous red arrow) and "pay yourself back."  I did it with everything from restaurants to the electric bill.  I considered myself very responsible and thought I was holding myself accountable to my overspending in the next month.  Shyeah, right.  Six months later, and half my categories were in the red, bleeding out my so-called buffer, until I was trying to catch up with myself every month and having no clue how much I actually had for the most important monthly priorities.  I don't consider myself an idiot who just didn't know what I was doing, but the system was inadvertently reinforcing some bad habits.  That's why YNAB it is the way it is now.  It took me maybe 3 months, 6 years ago, to adjust to a different way of doing things and my budget has never been healthier.

    Like 5
    • Annieland Agreed, and I can understand both sides of the coin. Depending on how each person thinks of their debt can have a bearing on what "works" to remain aware of the debt. I would argue that even if you weren't allowed to roll over the red arrow, you can just as conveniently ignore the over spending at the end of the month when everything that was over spent reverts to zero again.
      How do you stay present with over spending without falling into the habit of using the red arrow incorrectly, or ignoring the fact that you've over spent at all because your over spending just disappears at the end of the month?
      No real answer to that question...

      I do know that it was much easier to be present with debt when I was able to use 1 card for spending and pay it off every month and then have a separate account carrying the debt. That helped it to be much clearer when I was making progress, and also when I slipped up and over spent in my 'current spending'.

      If you don't have the capacity to separate the old debt vs current spending I think it's a lot harder.

      Like
  • Confession Time

    I started using YNAB4 back in 2014 and I wanted to use averages both in budgeting and controlling my spending. I had been budgeting for years, so I already had a very good sense on what I spent, on average, in most of my categories (or I thought I did), so I wanted to budget those average amounts, and I wanted to spend no more than those average amounts each month.

    I mean, I'm not stupid. I know how averages are calculated -- from adding highs and lows and then dividing by total of entries -- and how an average may have no bearing on today's actual numbers, so I'm not quite sure what my hang up on using averages in my budgeting and spending came down to.  I do know that letting go of that obsession took effort and a leap in faith I wasn't ready to initially concede. I was also not satisfied with my old financial methods and seeking something better, so I was willing to at least give another method an honest trial.

    I actually ran YNAB separately beside my other budgeting method for about three months, updating both daily. In YNAB, instead of trying to implement hacks to make it match what I was already doing, I put it through its honest paces using real-time numbers.  Initially, I updated my old system first then YNAB.  After about a month, I found myself updating YNAB first, then my old system. By the second month I was turning to YNAB for more accurate allocation and spending analysis because the actuals were more relevant to me in calculating how much was really left in the current month to invest, save for something special, or pay on debt.  By the end of the third month, I noticed that regardless of how much I actually budgeted and spent each month, the average of how much I spent/needed in each category was beginning to close in on what I'd been trying to budget from day 1, at least in most categories.  There were a few that were startlingly way off what I thought I spent and needed, and for the first time I could see why my previous budgeting method wasn't successful and why I was always borrowing from my future spending in those categories.

    My take-away:  averages are the end result that show up in reports; there is no such thing as an average month.

    Like 8
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 12 days ago
      • 3
      • Reported - view

      HappyDance I can't believe it's April 1st and I've yet to set up my Cash Flow spreadsheet for 2021.  I guess it wasn't really worth the effort in the end?  

      My confession is I pretty much use average calculations in my budget arbitrarily in certain categories.  What I mean is, for some I just do "average spent" each month, which is backwards looking.  It's kind of a challenge to myself to "get real" with what's actually going on, and try to spend less in the end.  It has the drawback of occasionally contributing to lifestyle creep.

      For forward looking averaging, I set large spending-by-date goals, for roughly 12 months, and then see if I can stay within that goal each month.  If I go over I WAM and then budget less the next month.  It's a wonky system, but works (and is kinda fun) for me.  And it keeps me on my toes :).

      Like 3
  • I may just have to increase the budget this month and then let the categories accrue as normal. I do like the system and it's the easiest I've found for managing categories like this and keeping track of everything. I still disagree with the statements about looking at categories differently if they are paid with a CC or a Cash account. The type of card the funds are paid with should be irrelevant. 100 dollars spent on groceries is the same whether I pay with cash or a credit card, in either case I've spent $100 dollars. The difference only appears if I've spent $100 that I don't have in which case it is a debt that I don't have money to pay back but if people are using YNAB correctly I think they will now if they are getting into that situation. Net worth, available assets are already reported separately. Regardless, I think it's important that there isn't one right way to do this and YNAB is certainly a good system that has helped a lot of people.  Also, I'm also shocked at how active this forum is.

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