Putting money directly into a budgeting category

Hello,

Last year, I started with YNAB. I used to take all my income and direct it to "To Be Budgeted" and then I put money in each of the spending categories. This year, I started splitting my income into spending categories directly from the deposits. I noticed that this skews my spending reports. Is this a bad way to distribute my income? Should I always use the "To Be Budgeted" bucket for distributing the income?

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  • Yes. The correct way to do it is assign income to To Be Budgeted, and then budget your income on the budget screen.

    It skews data because a categorized inflow is the equivalent of receiving a refund, and so decreases the amount spent. This will skew reporting, information in the category inspector and quick budget averages.

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  • So, should I got and correct all the previous deposits?

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      • BlueJhay
      • Bluejhay
      • 4 mths ago
      • Reported - view

      Turquoise Device  
      If you want more accurate reports, you can go back and change them. If it's too tedious, you can do a Fresh Start. It's up to you how you want to tackle it.

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  • I have been using YNAB since January 2017. I just started doing this direct deposit into the categories late last year. I went ahead and was able to correct previous deposits this month and part of last month. The amounts would show up in "to be budgeted" and then I move them to the right spending category. However, when I got to early February, the adjusted deposit no longer show the change in "to be budgeted" and then the spending category was just a negative amount. 

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  • So, I have stopped trying to adjust the deposited amounts from February 7 and earlier. It didn't work. I am assuming I should just try to do it the right way moving forward. I understand the reporting and averages are skewed. But, that shouldn't prevent my available amounts from being correct. And, my reporting day will improve with time as I do it right. Does that seem correct?

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      • mamster
      • mamster
      • 11 mths ago
      • 1
      • Reported - view

      Turquoise Device Yes. Trying to go back and fix it probably isn't worth the trouble.

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  • nolesrule  would this be handled in the same way if it is a cash back credit to your account from a credit card that is PIF each month?

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 11 mths ago
      • 4
      • Reported - view

      PatM That's how I would do it. Money is fungible and it is income, not a refund. Typically an inflow directly to a cateogry is reserved for the 3 Rs... refunds, rebates, reimbursements.

      Some people like to put it against a category as if it were a refund, but for accuracy that would require splitting it proportionally against all the categories that earned the reward, which is a waste of time.

      Like 4
  • nolesrule Thanks for the insight. 

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