Am I getting this right? Mental shift for newbie!

I am just getting started with YNAB, so this might be a really obvious question to other users! Sorry if so.

Have I got my head right here? I shouldn't really worry about what my actual bank balance is (other than to check that there aren’t any unexpected transactions) because it is made up of lots of little virtual pots of money that I have allocated it to in the YNAB app? And the YNAB app is where the magic happens?

 

So, if I have allocated say £50 this month to groceries that doesn’t get spent by the end of the month, the idea is that it just stays in my bank account ready for when I HAVE allocated it and actually spent it on whatever I decide to allocate it to in YNAB?

If so, I might actually hide my banking app on my phone so that I don’t go and try and manage my budget by looking at my bank account every day.

(I don’t have the option to integrate YANB with my bank as I am outside the US with a non-supported bank account if that makes a difference)

 

PS I LOVE that i have automatically been given a user name- Tomato Rain! Ha!

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  • Haha I am a little disappointed to find that I'm not the only Tomato Rain- but hello to all the other Tomatoes!

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  • Yes and no. Let's say you have 1 current account and 1 credit card and you pay your credit card statement balance in full every month. And the average that exits that current account is £3000/month (credit card bill, stuff paid by auto debit, etc). You probably want to make sure that you have £3000 plus a cushion (10%, 15%, 20% - whatever makes you comfortable) in your current account at the beginning of the month so you do have to keep an eye on the account balance and make sure that you are clearing transactions in YNAB and periodically reconciling (reconciling is an actual action involving pushing the reconcile button in your account register, not just looking through the numbers). 

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  • Thanks jenmas. I can't wait to get paid- normally this is so I can pay for bills but this time I am looking forward to allocating it to where it needs to go :)

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  • Tomato Rain said:
    Have I got my head right here? I shouldn't really worry about what my actual bank balance is (other than to check that there aren’t any unexpected transactions) because it is made up of lots of little virtual pots of money that I have allocated it to in the YNAB app?

    You don't look at your bank balance for making spending decisions but you do make sure that your working balance in YNAB matches your bank account online. The other time you need to worry about your balance is when you're making a payment out of that account as you need to make sure you have enough in the account to handle the payment. YNAB budget categories are not tied to particular budgeted accounts.

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