EBT in or out of budget?

I'm going to start this post because someone might want to know the answer and doesn't want to ask. It was a good topic when I taught a budgeting class years ago (then this was called food stamps, the card was just being introduced). 

Electronic benefit transfer (EBT) is an electronic system that allows state welfare departments to issue benefits via a magnetically encoded payment card, used in the United States.

The was the system used to work its the card would be loaded with a balance based on family size at the start of the month.  Then anything not used at the end of the month is lost, no roll overs. 

Some in my class would eat lavishly at the start of the month and be eating all potatoes, every meal at the end of the month. The idea of budgeting out the balance weekly helped them. I also convinced most of them to use coupons with the EBT card. It makes the balance go father. 

Let's hear from the community on this, in or out of YNAB? 

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  • I know various types of benefits can go on EBT, but I think (a) the most common type is SNAP, and (b) SNAP benefits do roll over from month to month. Not positive, though. Can you confirm or deny?

    In any case, I would definitely track these in YNAB, even if the balance did expire.

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      • Ben Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 11 days ago
      • Reported - view

      mamster That could be allowed. I don't know how the card program works these days. Decades ago when I was on food stamps, after a request process, the food stamp office covered a large car repair bill. Back then it was a check written to the mechanic of their choice.  I don't know if they still do that or how it would be processed. 

      Overall here's what I found, but by state: 

      Maine: If you get food supplements (or SNAP), you can buy food with you EBT card. Food includes everything from breads to seeds and plants to grow food. You cannot use your foodsupplements to buy hot foods, alcohol, cigarettes, pet food, paper products, medicine, or household supplies.

      Mass.: Your SNAP benefits do not expire at the end of each month...will expire after 12 months.

      I'm not sure if every state allows the balance to roll, but that's a great benefit. Hopefully, it breaks some of the feast to famaime cycle and encourages savings with coupons, etc. I mean, if the children are at summer day camp (various colleges hold those for free in my area, and some charge for them) the food spending should be less, which can carry over to next month when sales aren't so good, or little Johnny left the fridge door open and spoiled the food, etc. 

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  • Pacing spending is obviously a good idea. Whether it should be in YNAB is a tougher call.

    You would have to be mindful that this money cannot be used for anything other than groceries, and there are limitations on the types of groceries it would cover, if I understand correctly. The need to synchronize a category and an account is usually a signal that should be an off-budget (tracking) account. However, it's also nice to have a consistent process for checking categories for spending guidance.

    Given those tradeoffs, I would probably put the EBT card on-budget and be mindful of the category/account agreement.

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  • Regarding the pacing of spending... the Toolkit Extension has a sweet Pacing feature that is invaluable for controlling spending in discretionary categories.

    However, if you don't use that (or want pacing in the mobile app), the approach I've used before is to have two categories, one for guidance and recording spending, and a Reserve category. Move money each week from EBT Reserve to Grocery-EBT, either manually in the budget or automatically with a recurring net $0 split transaction. (If using the latter, also use a net $0 split to put money in the Reserve category at the beginning of the month to keep reports accurate.)

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  • One possibility would be to have the EBT on budget. When you get the amount, put it in as income and use it to fund an EBT category. When you spend, make sure the portion of spending from the EBT comes out of the EBT category (this may require a split transaction. Since it goes to zero at the end of the month (use it or lose it), do a reconciliation adjustment to zero. You'll get a negative TBB, which should match the remaining balance in the EBT category. Remove the excess from the EBT category to eliminate the negative TBB.

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  •  The thing about putting any sort of limited use fund into YNAB is that as long as you plan to use all of the money, putting it into the budget allows that money to be used elsewhere in the budget.  So  it would be entirely possible to budget for groceries normally, and then use the EBT to buy them, and take the money that was being given an EBT and essentially repurpose it for some other purpose.  Obviously squaring this up at month end depending on what the specifics were of the type of assistance being received. 

     But this is why a lot of us keep gift cards on budget. My sister-in-law gave me $20 to Panera and Target, and I’m using it to pay for a coffee table  that I bought off of craigslist and will pay cash for.

    Reply Like 2
      • Ben Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 11 days ago
      • Reported - view

      WordTenor good point, my employer sends out gift cards at times, that's a good way to handle them. 

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  • My fiance uses SNAP benefits on an EBT card. It's absolutely on-budget and feeds the grocery categories. His balance does roll over, but I don't know how long it'll roll over for.  It's never been an issue. With the government shutdown and them sending out the benefits early, they damn well better let it roll over! Money he should have gotten today came 21 days early, so it needs to be stretched out!

    We are legally two households, but for administrative convenience, we use one budget.

    I basically take the monthly amount and multiply it by 3/13 and then use the EBT card to pay that amount each week. That way I know he won't run out of money and the pacing isn't off, so if I get hit by a bus he won't be too broke to buy basic groceries before the next time his card gets replenished.

    I mean, you should be able to set a goal in the grocery category that at least matches the EBT amount every month and you use your monthly EBT funds every month, you shouldn't have a problem of budgeting that money for something it can't be used for.

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