Living in orange

So, I'm starting up YNAB again. Everything was great for the first week. All the money was allocated, humming along and "doing its job". A few times I shifted money from one category to another to prevent a situation from developing.

But then.. I got a good end-of-the-year deal and decided to purchase a one year gym membership up front.  It went onto a credit card. I'll get reimbursed for it via a program at work. and there is a paycheck and a few other large reimbursements coming my way in the next weeks and months, so there won't be a problem paying off the credit card before the statement closes.

But meanwhile, there is that big orange overbudget staring me in the face. Should I just revel in my  temporary delinquency? It seems like that's probably the best way to deal with it, since it is orange for a reason: to remind me that it needs to be covered when the funds come in, rather than pretending to shift savings over to cover the budget category. (Since I won't actually pay for it with my savings, so that seems like it defeats the purpose of the orange reminder to turn it green.) Well, actually I get paid in a few days so it will disappear soon, but this is more of a question about overall philosophy.

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  • I believe the overlying philosophy of the YNAB system "only budget money that you have" would dictate that you should not "cover" it  until those funds are in hand to deal with the expense.

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    • Violet Piranha Good point. I completely understand that. So maybe there is no good answer; by the YNAB philosophy, it would have been better not to spend the money until there were funds to cover it. 

  • The orange  (instead of red) is to tell you that you will incur new debt, if you don't cover that spending by month end. No reason you can't leave it orange for now, especially if you plan to cover it before the end of the month.

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  • Hey  Silver Boa , this is a great question. Since your scenario is that you'll be reimbursed for this credit overspending in the month, you should probably leave that overspent, so you know to expect the reimbursement. 

    Personally, I have a strange obsession with getting rid of all the red notifications on my phone's apps, so I have a specific buffer category and account for instances like this. I cover the immediate overspending with money from that category and then when I receive the reimbursement, I budget it back to my buffer. I'd only recommend it if you have a system for keeping up with reimbursable expenses (I use a combination of flags and category), but it works for me. And it gives me the weird joy of having zero notifications!!

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  • Thanks!

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