It shows I'm over budgeted, but my budget is far less than my income. Why?

My income was higher than my expenses. My expenses match my budget, so I'm not sure why there is a big red box at the top that says I'm over budgeted?  

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  • You have more money budgeted to your categories than you had dollars in your account. In short, you have monopoly money in your categories. To Be Budgeted should never be negative. YNAB does not stop you to get it negative, it's for you to move money out of categories to ensure you haven't created money out of thin air in your budget.

    Overspent = you spent more dollars than you had available in a category. The fact your expenses match your budget or not tells you if you are overspent or not. Your problem is not that, your problem is you have more money in your categories than you have in your accounts.

    Let's say I have $100 at the bank. I put $200 in several of my categories, so To Be Budgeted is $-100. If I go and spend $150, my categories available will be green but I will still have overdraft my account at the bank. No category, including To Be Budgeted, should be red or you can not trust your budget to guide your spending.

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  • YNAB is an electronic envelope budget. It bases its function on the fundamental question "What money do I have now, and what do I want that money to do?" 

    Even though you might expect income later this month, YNAB still wants you to only allocate the money you have. There are lots of reasons for this. Don't abandon the plan; you need it in order to decide what to do with the next money you receive. But right now, your budget needs to consist of only money that is already in your possession. This is the reason YNAB is so powerful, but it also is the key departure it makes from other systems.  

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