Am I doing this right? Question about multiple accounts as categories

I have a lot of different accounts linked. I have created a category group called "Savings+Available" where I have categories for all these accounts, populated with all the money from the TBB according to the amount in those accounts.

I transfer money from these categories to cover overspending whenever I import or manually log a transaction to a category, so that my overall TBB is $0.

Is this right? Is there a better way to handle all the money from lots of accounts in order to 'give every dollar a job'?

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  • Well, normally you actually give jobs to your money not just "wait until you're needed" but something like: these dollars will go for groceries, these for vacation, these for utility bills etc. 

    By putting amounts in your categories before spending, you can then use the category available to guide your spending. So if you want to buy something, you check the category available. If there is not enough you then decide if you can/want to take money out of another category with lower priority or not. If not, you decide either to forgo the expense or to use debt for it.

    In other words, with your method: how do you know if you have enough money to pay your bills and pay for the trip of your dream? Or if you have only enough money to pay for your bills and a photo of your dream destination? 

    For savings, it works the same. You need to ask yourself what you are saving for. It could be an income replacement fund, car replacement, trips, Christmas, computer, motorbike, boat, glider etc. and create a category for each of those. Else you may well double count your money.

     Finally, why do you have categories called: "Monthly Paycheck 1" and "Monthly Paycheck 2"? Your income should be categorised as To Be Budgeted directly.

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  • I am doing exactly what you are saying, except instead of budgeting from TBB to the categories like groceries, etc. , I am budgeting from TBB to the Spending categories for banks, and then moving that to the appropriate categories for budgeting. I'm doing this only to ensure that my TBB is 0. If not, I have a lot of money that I do not have any job to give.

    Eg. Say I have $20000 in my bank. I want to budget for this month and the next and each month, I need only $1000. So a total of $2000 will be budgeted, so my TBB will become $18000. I am putting all of this into the bank's category. What else can I do with this money? I don't want to budget for the months after the next right away. Is it okay to keep it in the TBB then, instead?

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    • Hi Purple Sound !

      When you have a moment, take a look at this Help Doc—Give Every Dollar A Job.

      If you're budgeting your funds towards account categories, you're not giving those dollars jobs but, instead, watching where they are. That's more of a tracking approach instead of budgeting for future expenses.

      You'll work only with the money you actually have on hand, because with scarcity comes clarity. It's key to why the YNAB Method is so powerful.

      For a fun look at Rule One, check out Rule One: Give Every Dollar a Job in our Starting Your YNAB Budget video course. Then stick around for Put Rule One in Action for a walk through on how this all works in the budget!

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  • Purple Sound said:
    What else can I do with this money?

     Well, I guess the answer is why do you keep all this money if you don't know what to do with it? 😉

    Do you have a very variable income so you won't have income coming in this month or next and need to be able to budget the month after next from this pot of money? In this case, the best is not to call the category "Account1" but "Smooth income" or something more relevant to the purpose.

    If you keep this money because you know you will need some for things like a new car, house repairs, etc. but you don't know when or how much you will need for those. The recommended way is still to define your priorities for those categories and to budget towards those. And if your goal for this money is to leave it as an inheritance to your kids, then it's fine, just call it "inheritance". 

    The problem with your current method is nothing is stopping you to dip into this undefined pot and you then don't know if when you dip in it you are hurting your other goals which might have higher priority for you. And if you say you are budgeting your high priority goals without issue, then this pot of money means you could actually reach those goals faster by distributing this money to those goals.

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  • Categories define what you want to buy/do with your money. Accounts track the location. At present, your categories are redundant with accounts and provide zero benefit.

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  • These videos might be beneficial

    YNAB for beginners
    https://youtu.be/xPVEB759gkU

    How to guide
    https://youtu.be/tATZ3PhooW0

    Set up
    https://youtu.be/sQeS5kTE6wU

    4Rules (There philosophy)
    https://youtu.be/jmbXBGzpCdk

    Managing Savings Accounts
    https://youtu.be/IMVYIgq_K8wL

    They have a channel
    https://www.youtube.com/user/YouNeedABudget

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