Reconcile early, reconcile often
Hey everybody,
I've been using YNAB since 2013 and my budgeting road to where I'm finally happy with my finances, my budget and my use of YNAB has been long and bumpy. Frequent reconciliation has been one of the keys for me to get there.
Do it. Sit down every few days, at least once a week, and reconcile all your accounts. The more often you do it the smaller the chance you've got to hunt for mistakes and the smaller the chance you took balances tainted by those mistakes as a state to base financial decisions on.
I enter my transactions manually because there's no import for me, and I do that every 1 - 2 days. I then proceed to reconcile the balance right away, so my accounts are reconciled multiple times a week. As a result I'm almost never in a situation where I need to fix some error, and if I am the error has to be in the last 5 transactions, which is a breeze to find and rectify. Bye bye automatic balance adjustments.
So if you're not in the habit yet to reconcile often give it a try, make it a habit and see how satisfying it is to just tell YNAB "Why yes, this indeed IS my current account balance. Thank you" in the smuggest way you can.
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I enter manually and use file-based import to speed up clearing of my high-traffic account. (Plus YNAB doesn't make matching mistakes.)
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dakinemaui What do you consider a matching mistake? I have been annoyed that auto import on my Capital One CC has only been working every 2 days, but this morning it "updated" without actually importing my cleared transactions. So I decided to give file import a try for the first time. I had four cleared transactions that hadn't come through, but set the file to go ahead and pull all of May, which was eleven transactions. YNAB pulled in all eleven transactions as new, and did not match any of them up to previous manual transactions. At that point I deleted all eleven (instead of trying to figure out which ones were wrong and which were my legitimate four, and because I was irritated), and decided to wait until Monday, since YNAB imports over the weekend seem to be shakier than during the week. I would have called that a matching mistake, but maybe I'm not thinking of it the way that you are, since it's my first time with a file import?
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dakinemaui I would have to write a script that prepares my account's data into a form YNAB liked and since I can't be bothered I'm remaining on manual input.
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Peter I'm surprised your bank doesn't support one of the standard formats. OFX, for example. European banks are usually very up to date.
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dakinemaui oh they support the format. With form I meant that I'm treating two sub accounts between which I frequently transfer funds as one in YNAB and I can't teach YNAB to import transactions of two accounts into one or teach my bank to export the transactions of two accounts as one
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Peter I don't think ynab would prevent you from downloading and importing a file from each account and dropping it in the single account in ynsb would it!
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Herman the main problem is that when I do it that way it contains all the transfers between the sub-accounts as inflows and outflows, which is a royal pain in the a** to clean up since concerning ynab these transactions are totally irrelevant and they clutter the overview. It's so much simpler for me to just enter none to five transactions per day manually (the ones that actually left and entered the overarching account)
In addition to that my bank uses preliminary exchange rates for purchases in foreign currencies that it later adjusts once the transaction went through, often lowering the final price according to the exchange rate at the time. In the bank's interface this is displayed as one transaction but these transactions show up as three separate items in an export. The original transaction and once it clears a refund for the original transaction followed by the final amount. Since I'm in Euro territory and I occasionally order or pay for online services in USD this happens fairly often. I really really do not want that to show up in YNAB
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Peter what do the sub-accounts give you that categories do not? It's a lot easier to transfer between categories as well.
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dakinemaui I use the sub-accounts for physically fencing off money. Once I moved it from sub-account A to sub-account B it's physically no longer available for the debit and credit cards connected to A as well as for direct debits (we pay a lot of things with direct debits in Europe). So when ever something goes wrong or a company with a direct debit mandate goes rogue, there's only so much money they'll be able to get. Also I can freely assign cards to sub-accounts so I can hand one of my cards over to my housemates or friends to pay for, say, groceries, medicine or other supplies, and limit the amount they can spend with the balance of the sub-account.
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Peter Makes sense given your debit card emphasis. I would just make an account in YNAB for each sub-account. You get separate balances and lists of transactions, right? If it looks like a duck... 🙂
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dakinemaui I've been thinking about the way to approach this a lot. I've decided against treating them as separate in YNAB because I would lose the quick and clean overview over my checking transactions. When I enter transactions manually or recurring transactions I'd always have to think about which card this was and which sub account that comes out of.
The mental load required for separate accounts in YNAB seems much higher for me than just entering and clearing a couple of transactions by hand regularly in one account.
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Peter thanks for the elaboration.
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Peppr2 said:
What do you consider a matching mistake?For example, when *I* clear a transaction I manually entered as 23.31, but the actual transaction on the bank's website was 23.13. YNAB doesn't make those type of mistakes.
There are issues between Direct and File-based imports. Importing will only match a manually entered transaction, so if it's already been matched via Direct Import (or something was entered by DI), the FB import won't match it. Design flaw, IMHO. You can mitigate this with a suitable choice of download window, but it's probably best to stick to one or the other long-term.
Edit: it's OK to run the File-Based import twice (e.g., pull in all of May now, and then pull all of May next week). A re-import will ignore something previously imported.
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dakinemaui ok, so the issues arise when there's a mix of direct import and manual entries, I guess. I can easily enter these four transactions, but I wanted to see how file import worked. I definitely do not like that YNAB shows zero transactions from a successful connection, when there are cleared transactions waiting, but I kind of remember that it's happened on the weekend for me before and cleared up on the Monday, so we'll see. Thank you for answering my question, I appreciate it!
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I use manual entry and manual reconciliation all the time, it just seems better for me to stay actively involved. I feel that reconciling every day is the best option since you keep the number of transactions to a minimum and it is easier to find reconcillation errors. It only takes a few minutes each morning. I, however, do use a password manager to facilitate quick login to accounts.
Another advantage to actually logging into each account daily is I can review pending transactions and quickly spot fraud or mistakes.
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ynaber2613 well said 🙂. I do exactly the same for exactly the same reasons.
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ynaber2613 Magenta Foal Same here as well.
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I reconcile every morning. I generally look forward to it.
I also manually enter transactions and check my bank accounts by just having two desktop windows open. Since the latest import update, I have had a rough time with importing from Wells Fargo (US bank). I have to log in and then go through two mobile authentications and even then sometimes it doesn't work.
I prefer the accountability that manual entry brings. Also it reminds me why it is great to have less debt (and therefore fewer accounts to check each morning).
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In another thread, there's a $6000 reconciliation adjustment outflow that has to happen because of the lack of reconciliation. My heart goes out to that poor fellow.
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Peter this is all great stuff - thanks for the share?
Devilishly curious - if you have some downtime to reflect - what was the YNAB UI like back in '13?
Those were the days of me half-doggedly attempting Mint.com and getting nowhere...
Sometimes I like to be masochistic and get details on opportunities I missed out on :p-
Much the same, though less colorful:
Biggest difference to accounts was Scheduled transactions had their own window. The killer-feature was that future-dated transactions -- that impacted category balances -- could be in the "live" (top) register. It was much nicer to see the real amount available for Groceries when the Amazon Pantry order in 2 weeks was already taken out.
Some would maintain the interface was better back then. This on a $120 monitor. :-)
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dakinemaui Thanks for sharing these screen shots, brings back good memories.
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I've recently set myself a calender reminder to reconcile more often, as I have been slipping and falling behind. I live in the UK, so doing Manual Entry (File based import sounds like a faff and Manual Entry is working for me)
My bank shows me pending transactions as balances (much like at the top of the YNAB bank account screen) so if there are still transactions pending I do what I like to call "reconcile in spirit" where I basically make sure the account balance, pending transactions, and cleared balance match, and write the date in the notes for the bank account - but I don't hit reconcile so as not to mess with the pending/uncleared transactions.
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Mx Emmin I am wondering about two things in your post:
File based import sounds like a faff
Why? I use it all the time. Just download the files and drag and drop right from the browser download list to YNAB one after the other. I find it great as my husband doesn't use YNAB and it is much faster to pick up his transactions than comparing the 2 registers.
I don't hit reconcile so as not to mess with the pending/uncleared transactions.
Reconcile doesn't do anything with the uncleared transactions, so why do you think it would mess things up there? And how are you able to ever reconcile, as far as I go, I always have some transactions pending. If the reconciliation was messing anything with the pending/uncleared transactions then reconciliation would never be possible.
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Ceeses
Ceeses said:
And how are you able to ever reconcile, as far as I go, I always have some transactions pending.I just dont spend for a few days and let things clear
I alzo have two bank accounts, so if one bank account 1 hasnt reconciled in a while but I really need to spend I can move money to the bank account 2 (transfers between accounts clear near instantly) and spend from account 2 instead
Ceeses said:
Reconcile doesn't do anything with the uncleared transactions, so why do you think it would mess things up there?The prompt when you hover over/hit the reconcile button just gave me the impression it did. I've posted this method on a couple of YNAB communities (Facebook, Reddit) and no one's corrected me before...
Ceeses said:
Why? I use it all the time. Just download the files and drag and drop right from the browser download list to YNAB one after the other. I find it great as my husband doesn't use YNAB and it is much faster to pick up his transactions than comparing the 2 registers.It's just extra steps when Manual Input already works
Admittedly I'm a single person household though
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Mx Emmin File-based import works well in combination with manual entry. I use it to help speed up clearing (and missed transaction entry) in my higher-traffic accounts when life interferes with my normal weekly reconciliation schedule. If there are more than about 8-10 transactions, it's simply quicker for me to download & import.
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Ceeses not going to lie, the discovery that I can reconcile whilst transactions are still pending is a massive time saver. I can reconcile daily! I always wondered how people did that.
Anyway, thanks for correcting. Odd that no one else did when I mentioned doing things this way on other threads.
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Mx Emmin said:
if one bank account 1 hasnt reconciled in a while but I really need to spend I can move money to the bank account 2 (transfers between accounts clear near instantly) and spend from account 2 insteadEither way account 1 has less money. I don't see how this extra step buys anything over just giving it to the vendor directly.
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dakinemaui it doesnt change anything it terms of giving it to the vendor, it just allows my bank time to let pending transactions clear so I can hit reconcile
Because I was under the impression that hitting the reconcile button messed with pending transactions
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Mx Emmin Ahh, now I see. Thanks for the elaboration.
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