YNAB You Need A Budget

[pminister]

Could someone explain this concept to me... Is the "Accounts Balance" amount, supposed to balance according to the "Budget: Income Available This Month" on the budget screen ???

Reason I ask is based on the following scenario:
1.) Say I just opened a "Checking Account" with $1000 as my starting balance, at the same time I also add an account for my "Credit Card" with an amount owing -$500.

2.) Now "Accounts Balance" is at $500

3.)When I hop over to the "Budget" screen, it says that I have "$1000" Available to Budget...

5.)But clearly I don't have that extra $500, but before you say anything... Say right now I do a payment in the form of a "Transfer: Credit Card", where I would put an outflow of -$500 from my "Checking Account". Therefore showing and inflow, in my "Credit Card" account with a $0 balance.

6.)But even now it says I have $1000 in my "Budget screen" for me to Budget.....Where clearly I don't !!!


Any idea/solutions...........?

[ginger]

You need to put a category of "Income Available this Month" on the opening balance of your credit card.

When you setup a credit card account YNAB assumes that this is debt that you will pay off over time, so it does not categorize the opening balance for you. If it's a credit card you intend to pay off each month, you must edit the opening balance as I said above. Then you will have the correct amount left to budget for your remaining expenses.

If it's a credit card you are paying off each month, from here out you will put a category on each purchase you make at the time that you make the purchase (clothing, groceries, whatever).

When the bill shows up you do an uncategorized transfer from checking to the credit card account--you have already budgeted all the dollars spent on the card and are simply moving dollars from check to the CC.

[pminister]

I dont know why this is so confusing.....but here it goes.

Scenario 1

I have a $1000 in Checking, and a starting balance of -$100 in my CC account as "Income Available This Month"

I understood the part about applying "Income Available This Month" for Credit Card starting balance, and it shows that I have the right amount of $900 "Available To Budget" on the Budget Screen.

On the left the Total are as: Accounts $900 (chq: $1000 / cc: -$100)

When I add an entry of "Transfer to CC" from Checking for a -$100. The Checking balance changes to $900, and Credit Card balance changes to $0. On top of it my "Available to Budget" on the budget screen is $900 as well.

Which is great as an overall!!!


I don't understand the part where you mentioned that from here on, each purchase needs a category in my CC screen. This is what I did to fix it, not sure if it is correct or not. But for example using the scenario as above for dollar amount I did the following.

1. Entered $1000 as "income available this month" in checking
2. Entered -$100 as "category: groceries" in cc
3. On Budget screen it says I have overspent in groceries for -$100
4. If I budget $100 for groceries, it says i balance on the budget screen
But I still need to balance out my chq balance and my cc balance
5. Therefore I do a transfer: cc from CHQ for -$100 as a form of a payment.

Now my chq balance is $900 while my cc balance is $0.


Anythoughts........lol

[blarg]

Your credit card and checking accounts are both "on budget". This means that the amounts for both of those should affect the budget.

So, when you buy something on the credit card, you're spending the money. It's leaving your life. So when you enter the transaction into YNAB, you have to categorise it. Let's say you went out to dinner and charged $50 on the credit card. You'd enter a $50 outflow in the credit card account, categorising it as Recreation: Restaurants, or whatever your applicable category would be for dining out.

So you go on through the month, spending on the card and categorising all the transactions. The statement comes, and you owe $800. You'd enter a transfer from the checking account to the credit card for $800, and you'd leave the category blank. This is because you've already accounted for the spending in your budget. The fact that the money sat in your checking account for a month before you actually gave the money to the bank doesn't matter, you spent it when you put it on the credit card. The money that was sitting in your checking account wasn't yours, you'd already spent it. You just didn't have to cough it up for a month, giving you a nice opportunity to earn interest on it.

This transfer won't affect your budget in any way, because you're really just shuffling money between accounts so you don't get charged interest. The budget doesn't care where your money lives. You do because you want to avoid bank fees, but the budget doesn't.

Watch this video, it'll help: http://www.youneedabudget.com/2010/onof ... wednesday/
Also, it'd probably really help if you watched the videos under the heading "Handling Credit Cards" on this page: http://www.youneedabudget.com/support/tutorials/

And if you want a formula to reconcile your checking account balance to your budget balance, do a search for "Patzer's Formula".