fambi wrote:For example, let's say I earn $2,000 per month. $1,500 gets used on monthly expenses and $500 is contributed to a number of non-monthly expenses which I expect to happen. $100 gets set aside for 10 months in preparation for my $1,000 vacation and 5 installments have been made. And $400 gets put aside in preparation for my $4,000 car replacement and 3 installments have been made.
How can I know, by a single glance, that although I have $3,700 in my bank account, $2,000 is for this month's budget, $500 is savings for my vacation and $1,200 is savings for my car replacement?
The easy answer: you look at your budget categories.
Assuming for the sake of this discussion that you use really simple categories, they would look like this (and I am going to correct something in your description, assuming that the 500 "non-monthly expenses" are the vacation and car replacement, and not other bills):
Monthly Expenses: 1500
Vacation: 600 (500 previously budgeted + 100 budgeted this month)
Car Replacement: 1600 (1200 previously + 400 budgeted this month)
So a single glance tells you that right now you have 600 saved for vacation, and 1600 saved for the new car, and 1500 devoted to paying this month's bills.
The tricky thing to grasp is that YNAB doesn't care where the money is physically at. You could have the 3700 in your checking account, or all in your savings account, or 1000 in checking and 2700 stuck in a coffee can in the kitchen. Which would look like this in YNAB, assuming all these accounts are on-budget:
Example one: Checking account: 3700, Savings account: 0, Coffee Can: 0
Example two: Checking account: 0, Savings account: 3700, Coffee Can: 0
Example three: Checking account: 1000, Savings account: 0, Coffee Can: 2700.
If, in example 3, you decide that a savings account is a safer place to keep your money than a coffee can, you take the money in the can to the bank, stick it in the savings account, and record a transaction in YNAB transferring the money from Coffee Can to Savings, with NO CATEGORY associated. You are just moving where the money is located, not what it is assigned to do. Before doing that, and after doing it, if you wanted to go buy a car, you would look at the Budget screen and know that you could spend up to $1600 on a car without it impacting your other financial decisions.
And just to be complete, as you spend money on this month's bills, you record those outflows against the category. Let's say that's two bills, one for rent for 1000, and one for food for 400 (yay! you managed to spend less than you had budgeted!).
At the end of the month, the category balances will look like this:
Monthly expenses: 100 (1500 - 1000 - 400)
Car Replacement: 1600
So the next month when you do the budget, assuming the same conditions, you will wind up with categories that look like this:
Monthly expenses: 1600 (100 + 1500)
Vacation: 700 (600 previously budgeted + 100 budgeted this month)
Car Replacement: 2000 (1600 previously + 400 budgeted this month)
Since you managed to not spend all of the monthly expenses last month, you could either budget less to them this month and put the extra 100 somewhere else. Or you could realize that last month was a fluke, and keep the extra in the category. At the start of the month, your account balances should be 4300, divvied up however you want in your accounts. But knowing what's available for what is all on the budget screen.
Hope this helps!