Someone please explain (simply) TBB and available funds in YNAB?
Or more simply, how do I read the budget page to see how much money I really do have to work with...between "Funds For XXX month" not really being a useful number despite its promising name, left over funds being added from the month before, future funds being subtracted out for the months ahead, etc. I feel like I'm caught in an overly complicated mess. And with some solutions offered such as to use "Patzer's Formula' and a calculate on the side what's really going on, I'm wondering how may YNABers struggle with this aspect of YNAB. Or is it just me ????
I'm a long time user and admittedly I fall off the bandwagon here and there because of my weak grasp for this (important!) aspect of YNAB.
I found it much easier with the old YNAB, and I know this topic has been beaten to death many times over--I have read all related discussions, but still remain scratching my head asking myself how much money my YNAB budget screen says I have, versus how much money I really do have. So I remain doing a good job playing whack-a-mole and tracking how much I am spending per category, but remain at a loss when my budget is tight and I'm really not sure how to look at the budget screen and easily tell how much I have to work with.
So I'd appreciate anyone who can help out and explain a simple solution for reading the budget screen when building a month's budget, and knowing how much money I really do have available/remaining to work with.
And if it's just me, then using small words and typing slowly might be necessary here too! 🥴
TIA (Orchid Panther)
I struggled with this as well. I admit I did not stick with YNAB4 because I couldn't quite grasp some of the concepts, especially income for next month. Things have clicked with nYNAB so I am quite excited.
First, the funds in TBB are the pool of money that you have that you have not given a job to yet. Imagine it as a stack of cash on the table in front of you.
Now, out of that money, you put some in an envelope marked Gifts. Imagine that there is a grid on the front of the envelope showing the same three columns, with a running total, similar to YNAB.
Budgeted (how much I put in there) minus Transactions (how much I spent) equals Available (how much is left in the envelope that I can use).
You keep doing that for all of the envelopes until your stack of cash is gone. Not one penny left on the table (or nickel in Canada since we no longer have pennies! ;) )
Now, when you go to spend money, you check your envelope (available column in YNAB) to see how much you can spend. If there is not enough, then you take from other envelopes (categories). Make sure you record the changes on the front of the envelope so you know how much is in it. Now, in YNAB, it does not show the math when you do the moves. It will only show you the result at the end. It sounds like you have been doing this with the Whack-A-Mole (WAM).
So, that is why they say look at your categories to determine how much you have available to spend. If you have $50 left in gifts, but you want to buy $75 worth of gifts, you have to make a decision.
1. Don't buy $75 worth of gifts, only spend $50 (or less depending on the reason for the gifts - maybe they were unexpected gifts and you really cannot afford them.)
2. Move money from another category to pay for the extra $25 worth of gifts. The recommendation is to take it from a less important category. (This would apply for unexpected gifts that you might have forgotten in your original plan or that you feel strongly should be purchased)
That is why it is so important to know how much is allocated to each category. That tells you where your priorities lie FOR YOU. If you don't like the priorities, then you can change them. No one else can tell you what you need/want to spend your money on. The categories become your guide to living your life according to your priorities.
Hopefully that helps!
Just to offer another point of view (or set of words) in case it helps:
TBB = the total of your on-budget accounts that has not been given jobs/placed in a category. It should ideally be 0 nearly all of the time.
Category Availables are like an overlay of all your money. The number you're looking at in a category available is how much you have saved for that purpose.
Here is how they are calculated:
Positive Available from last month
Budgeted column (Changes you make to the category when you're planning on the budget screen. Putting money in or taking money out by typing, using quick budget buttons, or using the move money tool can leave this cell either positive or negative, and that's just fine)
Activity (Changes you make through transactions categorized to the category in question. It's usually negative but can be positive)
You never want the available column to be negative (unless you're intentionally financing something with debt).
Keep asking questions. You'll get it!
You need to figure out your budget template. There are YNAB resources for doing this, but since I don't use goals, every so often what I do is move to the next month (or the furthest month ahead which has no budgeted figures in it) and budget what you think (or want) a "typical" month to look like (including sinking funds, savings, etc.). If your resulting negative TBB can be covered by your monthly income then you know your budget is on track. If you have extra available funds then you should decide where to put those - debt payoff, Income for Next Month (to get a month ahead), etc.
So I've read all the responses above, thanks for all the suggestions. Unfortunately, things are still about as clear as Louisiana Swamp Water; There's something that my brain is still not getting...
Let me ask a question about FRESH STARTS, as I am doing one now to see if it helps clarify/simplify things for me...
I just did the FRESH START (March 1st), which starts me off with actual cash in my cash accounts (checking, savings). Makes sense to me that the FUNDS FOR MAY = MONEY IN CASH ACCOUNTS (account balances over on the left side). So in my brain I am starting the month with what available funds I know I have, and as I budget away, my TBB will drop accordingly.
Now as paychecks start coming in, this will likely mess up my understanding by adding these funds to and changing my FUNDS FOR MAY and TBB values for this month. Here is where I'll need to wrap my brain around how to handle this new income so that it doesn't (1.) mess up my grasp of this month's budget numbers, and (2.) that I'll see the difference between funds already obligated for this month versus these new paychecks being which I'd like to be earmarked for next month. (More Swamp Water)
I guess there really is no different than what happens every month without doing a Fresh Start, but it seems to have simplified the displayed numbers so that I could see and wrap my brain around what is going on. Not sure if I'll just keep doing Fresh Starts every month, or if once I get the hand of things after a couple more months, I stop doing Fresh Starts.
Any problems I need to be mindful of when doing these FRESH STARTS? any chance I'm tricking myself with how much money I actually have?
Oh, since many of us use the Toolkit with Chrome, there is a printing extension tool which will allow you to capture and print the entire (scrolled) window, not just the part shown on screen; I find it useful to print out the Budget screen and have it actually capture the entire budget:
at the Chrome Extension store, search for:
GoFullPage - Full Page Screen Capture
I’ll give it a shot.
As you saw when you did a fresh start, all of your budget accounts make up the funds available to you to budget. It all there in TBB. Now it’s time to follow Rule #1, Give every dollar a job. You now fill your categories with your TBB funds. All of them. You are giving every dollar a job. The first month is always different than subsequent months. The first month is all of your funds. For future months, TBB is comprised of your income each month. So that first month you shouold be able to fund some of your Rule #2 categories or true expenses. These are categories you want to fill up over time like Vacations and Holidays.
Available funds are the funds in the Available column in your budget for each category. As you spend in your various categories, those funds will be subtracted from your Available funds for each category that you spend from. Make sure to check your Available funds in a category before spending in that category. If you don’t have enough, either don’t buy it or you have to move the funds from another lower priority category. This is 0 based budgeting. The Available category tells you exactly how much you have available to spend in each category.
You said you don’t want new income to affect the current month. In that case, you’ll need to put it into a holding category. Many of us call it Income for Next Month or IFNM for short. Whenever you get paid, move your paycheck funds from TBB to IFNM. Now you’re back to a TBB of 0. At the end of the month, now you can move those funds back out of IFNM and back into TBB and budget the entire next month.
The reason you don’t want to fresh start every month is because it’s like starting over every month. You’ll never be able to accumulate funds for Christmas for example. If I put in $100 into my Christmas category every month starting in January, by December I’ll have $1200 assuming I didn’t spend any of it along the way. This is how you build up for vacations and other longer term spending.
Keep asking questions and keep trying. Eventually it will click. And you will ask how you ever managed without YNAB. I hope this helped and good luck!
May I weigh in here with a bit of a pet peeve? Not with you, of course. With us: I think we make the "Funds for [month]" number a little too visible. It's almost never useful in budgeting decisions.
The numbers in the budget header (Funds for [month], Overspent in [month], etc) show one way of calculating To be Budgeted. But they're not the best way to think about it. Here's the true meaning of the amount you see in To be Budgeted:
Money in your bank accounts - Money in your budget categories (in current or future months) = To be Budgeted
The other number you may be interested in is Total Inflows. That's an easy way of seeing how much income you've recorded in the month you're looking at, and it appears in the inspector on the right side. It's not the same as Funds for [month].
Now, I'm going to take a guess as to why you're digging into these numbers: Many people who are new to YNAB are concerned that it won't be clear to them if they're budgeting more than their income, and mindlessly eating up their savings when they give every dollar a job.
I think that's a reasonable worry, but in practice, I've never seen it happen. It is totally normal to start YNAB and realize that money you thought of as "savings" or an emergency fund is actually money needed for True Expenses. That's not a fun thing to learn, but it's very useful.
However, you don't need to keep an eye on anything other than your budget categories themselves to know whether you're outspending your income—it will be obvious, because categories that should be accumulating money will be shrinking instead of growing.
Superbone and Matthew, thanks for your thoughts on what's critical to watch and why the other numbers that are confusing me can mainly be ignored (at least at my level of understanding).
Superbone: Thanks for clarifying about not automatically doing a Fresh Start each month and why -- hopefully this one Fresh Start and some answered questions will help me remain confident in my YBAN budget when the next months roll over. And yes, I expect it will click with a bit more thinking and working on it; time also for me to go back to YNAB University!
Matthew: yep you are correct in that I'm not clear on whether I'm using up my savings, when in reality I'm just frustrating myself by not thinking about "savings" and "True Expenses" (periodic expenses, not truly savings funds). Thinking of these categories as expenses instead of savings does probably help out -- seeing those funds as savings but watching them get chewed up monthly anyway as True Expenses is frustrating and contributing to my misperceptions with what my money is doing.
Something I found very helpful when I first started using YNAB was to create a temporary budget and follow along with the getting started videos and did the exact same things they did along the way (starting and stopping the video as needed) to see how adding accounts, creating categories, setting up goals, getting new income, paying expenses, etc., all played out in the software.
Then when I was feeling more confident with my understanding I set up my actual budget, and referred back to those videos when I got confused. I also searched/read through this forum everyday!
The videos available now are different from the ones that I remember using, but here's the playlist on YouTube: https://www.youtube.com/watch?v=8sCBVnMlEbg&list=PLq0_N-XTl2yC-fKHM_RqpdrS3Hp8BAeWm
One thing I really wish I could find is the previous recorded videos of YNAB's live workshops courses. They used to be on YouTube, but I'm not finding them. The workshops are awesome, so I recommend signing up if you haven't tried those already.
in practice, I've never seen it happen
Hey, Matthew! It happened to me when I started.
I had money in a savings account, and I inadvertently used it to fund normal categories (feeling that I was in a better place than I had thought!).
About 3 months in, I realized that my "savings" wasn't represented in my budget and had to do the heart-wrenching process of squeezing money from other categories to fund what is now my "Income Replacement" category.
Orchid Panther ,
in order to avoid this, I recommend making savings categories and funding them first (maybe even do it in February's budget screen so you can have a clean month in March).
It may help to think of categories in the following groups:
You hope to never touch - Loss of Income
Contingency - you don't know when or how much, but Medical, Veterinary, Auto Maintenance, Home Maintenance, Technology Replacement, etc. could give you peace of mind knowing that you've got something to deal with the eventuality. There are ways to ballpark these figures, but they can take some time to build.
Known True Expenses - 6 month insurance premiums, gifts, annual subscriptions, vacation, large purchase goals, etc. You know the amount and the date you need the money.
After you've sequestered away your savings in those savings categories, then you can fill out a regular monthly budget.
I'll break that into another reply to help you anchor/organize the advice. 🙂
One more thought: since you mentioned the extension to let you print the whole, scrolled screen...
For my first... 8-10 months of using YNAB, I used pencil and paper to figure out what I was going to budget each month. I didn't know about INM, but that would have probably allowed me to feel confident making my monthly plan using YNAB's software. However, I like seeing everything on one page like I can with paper, but I can't with screens.
I would apply YNAB's 4 rules on my paper, so I would write out my income (with dates) at the top.
I would then list my categories and add everything up to make sure I was allocating to $0.
I would then mark which categories would get funded with which paycheck (last paycheck of the month funded my bills for next month and groceries/variables until the next paycheck) and check that those amounts totaled the proper paychecks.
This way, when my priorities outstripped my funds, I could fiddle with the plan without messing up YNAB.
Come payday, I would go quickly down the budget column and type the approved numbers. Rinse and repeat.
If you have to budget paycheck to paycheck, this is a good way to simulate being a month ahead for the "whole picture" kind of planning. It also saved us from excessive budget meetings every month, which was necessary.
Melissa , Thats a great suggestion about following along in a test budget wit the training videos -- this will definitely help me out a lot!
Matthew , thanks for the video links here!
Move Light Sound Life , awesome explanations and analogies; your future budgeting category ideas will help me out a lot, thanks!
I am looking forward to tweaking things with these suggestions, thanks everyone!