Author Topic: Help with YNAB...way too much money in my budget!  (Read 4477 times)

Sonos

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Help with YNAB...way too much money in my budget!
« on: November 18, 2016, 05:13:11 PM »
Hi, all.

I'm a smart person (I hope), but I've been struggling to set up YNAB. I think I've identified the problem (see below) that's tripping me up. Could I get an experienced YNABer to weigh in and let me know if I'm on the right track?

When I initially set YNAB up, I put in ALL my accounts and it seemed odd that ALL my cash was in my budget. My checking accounts and savings accounts were all in my YNAB budget. This made my available money to budget much more than I would spend in a given month.

Is the problem that I should ONLY have my checking account as my budget account? This way, when my paycheck is put into my checking account, I know I can only budget the money I've been paid. All money from my checking account then flows to other accounts (credit cards, savings, retirement, etc.).

Is this correct?

Thanks so much!

Travis

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Re: Help with YNAB...way too much money in my budget!
« Reply #1 on: November 18, 2016, 05:22:31 PM »
How much money you have, and how much you plan to spend are two completely different numbers.  Are you saying your emergency fund that you never plan to spend is now in your budget? If so, good. It's supposed to be there.  Just because you have money in a budget category doesn't mean you have to spend it right away.  Keep every checking, savings, and credit card account "on budget." Your excess funds should always be accounted for even if you don't plan on using them.  That way you know what you have when the day comes you have to tap into it.

If after filling up your spending categories you still have money left over to budget, create another category and funnel it there or add it to your emergency fund.  Are you using the previous month's income for your budgets?  In other words, did you fill up November's budget categories with your 1st of November paycheck or money you earned in October?  If it's last month's money, stick it in an emergency fund category until you know what to do with it.  If it's this month's money and you have money left over to budget, then start filling up December's categories with it.  The goal of YNAB is to save until you have enough to budget one month in advance.

robartsd

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Re: Help with YNAB...way too much money in my budget!
« Reply #2 on: November 18, 2016, 05:25:50 PM »
Only tried YNAB, not a regular user, but here's my take.

One of the YNAB principles is that "Every Dollar Has a Job". If you put all your accounts in YNAB, you have to tell YNAB the job you've assigned to every dollar (such as "emergency fund"). It is OK for a budgeted amount to carry from one month to the next. Just make whatever categories that money is assigned to, budget money into those categories and be done with it. Your first month's budget wont really be a monthly budget, but next month will be fine.

If you just want to budget your checking account, you can do that - money moved to other accounts would then be expenses in your YNAB budget. YNAB is a budgeting tool, not a net worth tool.

boognish

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Re: Help with YNAB...way too much money in my budget!
« Reply #3 on: November 18, 2016, 05:30:27 PM »
Give every dollar a job! Rather than having an amorphous blob of cash, you'll task every last dollar with a future expense. You're not obligated to spend every dollar you budget during the month - use your savings to pad future expenses like a new car or a vacation. After the first month, you'll only be budgeting income from the previous month, and it won't feel so weird.

Edit: derp, didn't see the previous responses

terran

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Re: Help with YNAB...way too much money in my budget!
« Reply #4 on: November 18, 2016, 07:07:28 PM »
The key with YNAB is that WHERE the money is does not dictate WHAT the money is for. Before YNAB we had a number of different accounts for different savings goals. Now we've gotten rid of them and just use categories to keep track of things.

catccc

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Re: Help with YNAB...way too much money in my budget!
« Reply #5 on: November 19, 2016, 04:47:19 PM »
The key with YNAB is that WHERE the money is does not dictate WHAT the money is for. Before YNAB we had a number of different accounts for different savings goals. Now we've gotten rid of them and just use categories to keep track of things.

Pretty much this.  Also, I keep most of my investment accounts outside of this, with the exception of the kids' 529s, for which there is an off budget account with the principle amount.  It an investment that I tend to sporadically put money into, and I like to account for this as a transfer to an off budget account.