"To be Budgeted" amount of the previous month changes after adding transactions

So in January, I gave every dollar a job and set To be Budgeted to 0. 

Today, I first set To be Budgeted to 0 by allocating money for February.

I then added all the transactions from January and sure enough, I overspent in a bunch of categories. This led to my To be Budgeted go to -500 for February. 

I reallocated the budget for February to reach 0 again. 

When I switched back to January, I saw that the "To be Budgeted" changed to +500

Couldn't get my head around this. Was money that I reallocated in February's budget automatically transferred to January's "To be Budgeted"?

I then reallocated January to reach 0. However according to this article, I shouldn't rearrange January's budget?

Keep things Current! As a general rule of thumb, we don't recommend going back in time to make changes to your budget, even if it's for as noble a cause as covering overspending! Instead, keep all changes in the current and future months.

What's the correct approach here?

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  • I occasionally find that a transaction actually happened in the previous month, or one that was entered for the previous month actually happened in this month. I make the adjustments to get TBB to zero, because I'm a little bit OCD. You don't have to if you don't want to.

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  • Maybe YNAB got confused? If there's 500 overspending in January, then 500 is deducted from February's TBB 0 budget - making it TBB -500. If you then free up 500 in February (making February's TBB 0) January's TBB should also be 0 not 500? Tried reloading the budget?

    If you don't cover the overspending in January when it happens, any credit card spending will stop moving funds to the credit card payment category, leading to even more overspending and possibly more credit debt. Seems like bad advice if you ask me?

    I switched my credit cards to checking accounts to avoid all the hassle involved with the 'credit card' account type. Then I could carry on without any ill effects like the credit cards causing overspending - which is what YNAB's recommended way will lead to for most people. I guess it doesn't matter in the end, I just don't like seeing old overspending deducting my TBB, or any color besides green or gray.

    I understand the focus on the present instead of the past and all that, but as the month rolls over this is bound to happen to most people that more expenses for last month pops up.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
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      Moohouse 

      Moohouse said:
      If there's 500 overspending in January, then 500 is deducted from February's TBB 0 budget - making it TBB -500. If you then free up 500 in February (making February's TBB 0) January's TBB should also be 0 not 500?

       No, This would make January's TBB 500, as long as there was enough income in January (or earlier) available to cover the overspending. You would then use the 500 to cover the overspending in January. The overspending would no longer carry over to February's TBB.

      Like 3
      • Moohouse
      • Software developer
      • Moohouse
      • 1 mth ago
      • Reported - view

      nolesrule Ah, yes. When you budget them in January you basically moved February money back to January, increasing January's budget.

      If possible I'd rather move around money in January's budget to cover the overspending, not move money from February back in time.

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    • Moohouse To head off any confusion by others (because I have seen it before), it's still money earned in January. It's just that it's no longer being pushed into February.

      But I agree and highly prefer to reallocate within the same month's area.

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    • Moohouse I guess the problem is that I do all the transactions and budgeting once a month and that's usually in the proceeding month. Maybe it will help to do it twice a month, so I can cover any overspending within that month itself. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
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      Sky Blue Device 

      Sky Blue Device said:
      I guess the problem is that I do all the transactions and budgeting once a month

       That's your problem. You should be adding transactions as they happen so you can use your category balances to make spending decisions.

       

      Sounds like you are using YNAB as a transaction tracker and not using the YNAB method, particularly Rule 3.

      Like 4
  • Either ignore the past or fix the past. Doing neither will result in confusion.

    Like 3
    • dakinemaui Can you elaborate?

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    • Sky Blue Device The issue is you have overspending in last month's area which reduces TBB in the current month. You can either

      a) ignore last month and budget Feb to $0 (leaving Jan overspent) or

      b) fix the overspending in Jan, which makes the two TBB values match (until New income arrives in Feb, of course).

      Currently, you are not fixing Jan, AND you are not ignoring Jan. You therefore perceive a problem.

      The point of YNAB is to plan your spending. It is terribly expensive if you're only going to use it as an after-the-fact expense tracker.

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  • Why did you wait to add January transactions until today??

    Like 1
      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 1 mth ago
      • Reported - view

      satcook My thoughts exactly. Also trying to figure out how multiple replies got posted without anyone asking this question! 

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    • satcook I do my YNAB budgeting once a month. Usually at the end of the month or early proceeding month. Why is this a problem?

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      • jenmas
      • jenmas
      • 1 mth ago
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      Sky Blue Device if you buy something on the the 15th of this month but don't enter the transaction until the 1st of the next month, how can you use your category balances for guidance on the 20th of this month?

      Like 4
  • Sky Blue Device said:
    I then added all the transactions from January and sure enough, I overspent in a bunch of categories. This led to my To be Budgeted go to -500 for February. 

     This is the core problem. YNAB just isn’t built for this kind of “look at what I did” budgeting. You’re meant to prevent overspending by reallocating before it happens, and, failing that, reallocate after. 
     

    Yes, we can all tell you about all the ways overspending works and what it does and how its dealt with, but it will all work much better if you begin by using the software as it’s meant to be used. You’ll find it much less perplexing and far fewer things will go wrong. 

    Like 4
  • I didn't quite get what are you trying to convey. Maybe try again with a non passive-aggressive undertone?

    I did reallocate my funds after. I just was confused why there was an influx of money into January's TBB when I made changes to February's TBB.

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      • satcook
      • satcook
      • 1 mth ago
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      Sky Blue Device YNAB needs to be interacted with daily.  You can't use your category balances to guide you if you wait a month to enter transactions.

      You had an influx of money because February TBB was subtracting the overspending from January.  Once you covered the overspending then you had more money to budget.
       

      Like 2
      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 1 mth ago
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      Sky Blue Device 

      YNAB is a digital envelope budget. In an envelope budget, you fill your envelopes, then, when you go to spend money, you consult the envelope to determine how much you can spend (A) and then immediately put the change back in the envelope (B) so that the next time you need it, you will again know exactly how much you have to spend. It's not the kind of budget where you go, "I hope to spend $400 dining out this month" and then go back at the end of the month and say "Yay, I spent $350!" or "Oopsie, bad me, I spent $450." If it were a real envelope, you'd never be able to spend the $450 without first deciding from which other envelope the $50 extra is coming from (C). 

      In YNAB, that looks like: looking at the category balance before you spend money (A), entering the transaction as you make it or at least within a short window of time after (B), and moving money before you spend if you want to spend more than is in a category (C). 

      Because this is how the system is designed, the software does not work well when you enter a month's worth of transactions post hoc. As you see, you quickly end up with a massively confusing result if you've overspent categories. You can do it, obviously as you've seen, there's nothing stopping you, but I'd recommend trying the system as it's designed to be used. You'll not only find that it helps with all this TBB/overspending/where'd my money go confusion, you will also find that particularly steps A and C will automatically help with not overspending things in the first place. 

      Like 5
      • dakinemaui
      • dakinemaui
      • 1 mth ago
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      The additional benefit of using it as designed is that it's far more effective at helping you achieve the things that are important to you (whatever that happens to be).

      Like 2
  • Many have given suggestion on how you should use the software properly to avoid this and to get the most value out of YNAB.  Regardless, what you did left me with questions.  I can be OC and I like to understand  how actions in YNAB affect the results I'm seeing.  I did a test myself....

    • Jan and Feb are both TBB zero
    • I added a fake transaction to my bank account on 1/31 for $500 dining out.  I had more than enough in the account to cover it. 
    • Observe: Dining Out category in Jan show available -$500 (expected)
    • Observe: Feb TBB is -$305 (not expected).  Not sure why it wouldn't be -$500 since it should have reduced the funds available for Feb
    • Observe: Funds for Feb did not go down, and overspent in Jan was -$305.95.  
    • Observe: One of my credit cards had a positive Available balance and now it is negative.  Why would a credit card amount change when one simple transaction was added to my checking account?
    • Like you, I adjust budget in Feb to get it zero, and then saw that Jan had money, etc. etc. same confusion as you
    • From searching other posts: Dining out category has transactions in both my credit card account and my bank account - so monthly rollover is handled differently.  Can't say I completely understand it yet.
    • Note that undoing all my test changes and re-categorizing the fake transaction in a category that has never had any credit card transaction seems to work more as you and I would expect.
    • Note that undoing all my test changes and putting the transaction into a credit card account (instead of checking) resulted in the TBB staying zero for both months.

    Do you have credit cards - that is probably what is messing things up (based on my limited experimentation).  Can't really explain why.  Might be best to just roll with it.  If you don't want to enter transactions more regularly, at least enter last months transactions first before budgeting for the next month so you are not ping-ponging back and forth getting everything to net out to zero.

    Like 1
  • Daily Impressions said:
    Observe: Feb TBB is -$305 (not expected

    I suspect you also have credit transactions in the Dining Out category. (Not quite the OP's scenario.) YNAB will convert as much of the cash overspending to credit as possible, which is why the Feb TBB wasn't the full -$500.

    Like 1
      • WordTenor
      • I'm the oldest and the wittiest.
      • WordTenor
      • 1 mth ago
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      Also why the credit card payment  category went negative. 

      Like 1
  • Daily Impressions said:
    at least enter last months transactions first before budgeting for the next month

     Great point. This is actually the answer to my question. But I've decided to budget more often anyway. Maybe once or twice a week. 

    And no, I don't use a credit card. 

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    • Sky Blue Device I'm glad to hear that you'll be checking in more often! YNAB works best when you're more hands on. 😉 This article has suggestions on creating a budget routine that you might find helpful!

      The longer you go without interacting with your budget, the harder it can be to get caught up and keep your spending in line with your priorities. With your budget you decide where to spend your money instead of looking back and wondering, “Gosh, what happened? Where did it all go?” If you haven't downloaded it yet, the mobile app can help you with checking your budget while out & about!

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