Balancing what’s in the budget with what’s in the account
Hi - so I’ve been struggling with YNAB for a while. I THINK that if I add up all the “green” in the budget, it should match what’s in my bank account, right? I gave every dollar a job but there’s still a $500+ difference between what’s in the account and what’s in the budget (it looks like there’s more in the budget). What’s up?
You actually have to include red categories as well, as they indicate that money is missing from green categories (which is why you're supposed to fix that ASAP, ideally reallocating even before the purchase).
If you have other accounts on-budget, any cash-based ones need to be included in the "account" total. (A positive credit card account is considered cash as well since it doesn't need to be paid back.)
YNAB ensures the money in the budget matches the cash on hand at all times. The easiest way to prove this to yourself is to scroll to the future-most month that you can. In that month and assuming To Be Budgeted is $0 (Rule 1, right!), then Total Available (shown on the right) will equal the combined cash in all budget accounts.
I'm running into this issue now, how timely. To dakinemaui point these are my answers:
- Yes, I've just reconciled them this week.
- 6 accounts
- 3 accounts are Credit cards
- 0 credit cards have a positive account balance
- TBB, to be budgeted, is zero for the future, however I do have $600 in next month for mortgage.
Forest Green Mermaid said:
I find YNAB to be pretty unintuitive in general.
Once it clicks, you'll wonder how you were ever confused. Imagine you have all your money withdrawn from all your accounts sitting in a pile in the center of a table. You also have various paper envelopes sitting elsewhere on the table. One is labeled Groceries, one is labeled Gas, one is labeled Rent, etc. Now you know your Rent is $1500, so you take $1500 out of the center pile and put it into the Rent envelope. You expect to spend $300 in Groceries before being paid again, so you take $300 out of the center pile and put it in the Grocery envelope. Etc.
Your grandparents (great-grandparents?) may have done this exact process before computers were invented. YNAB is simply the electronic equivalent. That center section of the table is the "To Be Budgeted" pile. The envelopes have turned into "categories". Everything else is the same.
Even Credit Cards work the same way. One of the envelopes is labeled Credit Card Payment. When you buy $100 groceries on a card, you incur debt but also still have the cash in the Grocery envelope. Planning ahead, you would therefore take $100 out of the Grocery envelope and put it into the Credit Card Payment envelope. When you get that CC bill, it's no big deal -- you would just give them the cash in that envelope.
No amounts are in August.
Not sure what you mean. If you have mortgage funds budgeted in July's area, you should be able to scroll one more month forward to August. All money that's currently available carries forward and will be part of the Total Available in the August's budget area.
August TBB + August Total Available = sum of positive account balances
had more money in the category than on the balance, due to refunds this month on the card.
Refunds should be categorized back to the same category as the outflow. Categorizing as TBB will definitely throw things off. Unfortunately, a refund that takes the account positive will also throw things off, even when correctly categorized to that same spending category, requiring you to adjust the Payment category.