First Month YNAB Budget - How to reconcile prior month overspend?

Hi all - this January my wife and I created our first YNAB budget to track all inflows and outflows beginning February 2020.

Our issue is this: we had unexpected expenses that were not included in the February budget. These unexpected expenses (which were paid for pre YNAB budgeting dollars) now appear as overspending in 5 separate YNAB categories in February due to the timing of bank postings.

Today if I add the amount of overspending across those same 5 categories to January's budget as "available to budget in February" this offsets and removes the overspending in February's makes my YNAB Checking account balance higher than the reconciled balance. Because the monies spent were prior to February, we can not resolve the overspending by borrowing from other categories in February's budget nor can we carry them over to March.

We don't want to delete the overspent categories' activity for reporting purposes.

What is your solution?

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  • I am not following this.

    You make it sound like these expenses were not included in the starting balance, and that they posted to your account after the starting balance.

    If that is true, then you need to cover them with money already in your budget. Moving money around in your budget won't change the balance of your checking account.

    Like 1
  • Move money from one or more green categories to the red categories in January's area. 

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  • nolesrule dakinemaui This is confusing admittedly.

    The 5 overspent categories in February are the result of debits that posted in my checking account in February for things that were paid for with non-February budget funds. Make sense? So for me to reconcile my YNAB checking account with my actual checking account I have to include non-February budget related debits. if I move money to cover those 5 overspent categories again within the February budget I am essentially "paying twice" for overspending categories that was handled prior to our February budget.

    Make sense?

      • dakinemaui
      • dakinemaui
      • 7 mths ago
      • Reported - view

      Indebted_Dude Sorry, I don't follow. Is your starting balance transaction dated prior to these outflows? If so, then it wasn't pre-ynab money.

      I don't see how you consider this "paying twice". 

      Does your YNAB account balance agree with the real world? 

      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 2
      • Reported - view

      Indebted_Dude It doesn't matter that the transaction was from before you started YNAB if the transaction wasn't posted at the financial institution yet when you stated YNAB. You should have budgeted for these transactions and entered them in YNAB, because they did not hit your account until after you started YNAB.

      For example, if you start with $1000 in the bank, but also have an outstanding payment for $100 that hasn't hit the account yet, then you need to add in the $100 transaction in your account, which will then be a $100 expense against your budget, leaving you with $900 available for everything else.

      Like 2
  • Thanks for the responses! I was getting hung up on when transactions were happening vs when they were being recognized based on the way they looked in the YNAB reports. I've got the YNAB methodology down now. 

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  • 7 mths agoLast active
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