One last thing – I’d recommend keeping that emergency account and all these savings accounts on – budget , and just do the same thing for each – set up a matching category. Since a budget is a plan for your money , and savings is a part of your plan, it’s fine to do that.

Jennifer, I’d recommend setting up matching categories for each of these accounts. For example, if you have a car repair savings account, set up a category for it as well. If you move $100 from checking to the car repair account, that’s a transfer within the threshold …so you don’t need to categorize it. Then just make sure you budget $100 in the same category. The category balance will grow with the account balance. Hope that makes sense!

@Liz, as far as the overspending goes, you can still have your budget reconcile with your bank balance(s). You’d just need to look at the footer of YNAB 3 and take into account the overspending. (Which really is already taken into account with the category balances, you shouldn’t double-count it). Here’s a link.

Thanks for this – it reinforced what I had been thinking about the accounts and now I am going to set up some off-budget accounts I had been thinking of setting up.

I would like to see more about the theory behind the overspending settings. What happens to the different balances when you choose the recommended option (and how do you reconcile the balances in your budget to your bank accounts – I would like to make sure the money I have in my budget matches up to the money I have in my accounts – I’m still a newbie at this and like to have these small reassurances…) vs. pushing the overage to the next month’s version of the same category. (If you already have a training video on this, I must have missed it – can you point me to it again?)

Also how do suggest people guard against the danger of people looking at their Christmas budget and seeing say $500 available and going out writing a check for that much, not realizing majority of that money was physically in their savings account, not checking? To me it seems the fewer the accounts you have the better. One checking, one savings, one credit card (that doesn’t carry a balance).

Also, any strong opinions as to whether its more helpful one way or the other to have things like emergency fund within the budget box or as an off-budget account?

Thanks again. Very helpful.

1) Camp one wants to keep their Budgeted amounts rigid for the entire month so they can see what they originally thought they needed, and then what they actually used, in a specific category. They like to measure their budgeting accuracy I suppose.

2) The second camp just doesn’t like to see overages, so they’ll shuffle money between categories (as your example did) so everything balances (to the extent possible) and there are no overages. I’m in this camp. I don’t find it particularly rewarding to know that I can guess correctly (or not) at the beginning of a month nearly as much as getting rid of category overages :)

To each his own though!

@Lea, this is probably why you’ve gone back and forth for a while. The two options both have pretty evenly-weighted advantages/disadvantages.

Thanks for posting this video. I’m just getting into the habit of using YNAB 3.

This short little explanation was incredibly helpful!!!

I really hope you keep posting these.

I think it is great that Jesse publishes information like this on a regular basis. Be it videos, articles on how to save on groceries or budgeting problems. I think that all of the information coming from YNAB is great!

Thanks Jesse