YNAB You Need A Budget

[souwalker]

Hi

I understand by default if I overspend in one category, the negative amount is deducted from the next month buffer. I too have the option to subtract the overspend amount from the next month category balance. YNAB starts the next month category with zero amount.

I know this gives us the option to start fresh with that overspent category but would it not be better to carry the negative amount over to the next month? My understanding is try no to vary from your budget as much as possible and budgets are not meant to be changed? Maybe coming from another budget package, I need to change my way of think

What would be the best route to take on overspent category/ies?

If the overspent amount is deducted from next month's buffer, does it make sense to budget that category with the same amount I normally buddget for the following month?

What happens to Rule 4 if there is no buffer?

Rgds
Pat

[J.Mann]

Budgets are ALWAYS meant to change. That is the key, this software is flexible.

I always make sure that I have no overspending in any category. That means budgeting more money to the categories that need it, and budgeting less to those will balances.

That is the easiest solution. Fix the overspending now, before it keeps building up and begins to tear into your buffer. And you may realize that it is a trend of the numbers going always over in that category.

I would also recommend storing your "ideal" budget in the next month. I do this using the quick-budget feature at the start of the month, before I make any changes... and then I make changes throughout the month...

Hi

I understand by default if I overspend in one category, the negative amount is deducted from the next month buffer. I too have the option to subtract the overspend amount from the next month category balance. YNAB starts the next month category with zero amount.

I know this gives us the option to start fresh with that overspent category but would it not be better to carry the negative amount over to the next month? My understanding is try no to vary from your budget as much as possible and budgets are not meant to be changed? Maybe coming from another budget package, I need to change my way of think

What would be the best route to take on overspent category/ies?

If the overspent amount is deducted from next month's buffer, does it make sense to budget that category with the same amount I normally buddget for the following month?

What happens to Rule 4 if there is no buffer?

Rgds
Pat

[souwalker]

I always make sure that I have no overspending in any category. That means budgeting more money to the categories that need it, and budgeting less to those will balances.

We make a concious effort never to overspend any category but sometimes the unplanned expense hits us like last Dec, I was hit with $1000 bill for car repair.

We also always budget more money to the categories than need except for categories we know will alwasy be the same i.e monthly insurance premium etc.

What does the 'quick budget' feature does? Does it carry forward the previous months category and the budgeted amount or just the categories?

Are over-budgeted amount carreid forward to next months related categories or added to the buffer?

Rgds
Pat

[macduncan]

As usual Joel is spot on!!!

Bill

[Nutmegan]

What does the 'quick budget' feature does? Does it carry forward the previous months category and the budgeted amount or just the categories?


The "quick budget" feature copies the current month's budget to next month. So if your budget doesn't vary much or you want to use that as your baseline, then you only have to tweak it as necessary.

The car repair (ideally) will come from a rainy day fund which accrues month to month and rolls over (grows) month to month until you need it. Insurance premiums, which you know the amount due in six months and can budget 1/6 per month. But, car repairs are unpredictable. You can average what you've spent over the last 12 months or something like that but you know it is inevitable that you will have a car repair at some point in time, so you need to set money aside for it each month.

[jjsouth]

I opt out of rule 4 in my YNAB budget. If I spend $20 too much on groceries one month, then I want to attempt to reduce the next month's spending by that $20, so I roll it over. If I find that I can't ever get out of the red by the end of the month (month after month), then I'll "whack a mole" and pull money from somewhere else to cover the negative, reconsider my budget amount, and keep moving forward.

Other categories are a bit different. I will sometimes have a larger negative balance that will get repaid slowly over time. Like my kid's upcoming braces. I'm currently saving $210 a month to the category. If all goes well, he'll get braces in June and I'll have to pay $2600 all at once. That will take my braces balance to around -$1600. I will leave this negative balance (I have enough in my emergency fund to cover the expense, so I'm not going to be having problems with overdraft) and "repay" it over the next several months until it is cleared. I could transfer the $1600 from my emergency fund to zero out the negative and then pay the $210 a month to the emergency fund, but I like seeing exactly how much I owe to that category when it's left as a negative. And, like my recent car repairs, when I see that negative balance staring at me, I'm more likely to focus in on repaying that. So I'll cut back on non-essential things when maybe I wouldn't if I had just transferred the money from my emergency fund. I could see myself thinking, "Well, it'll just take me longer to get to my FFEF goal." rather than "We'll just have to do without a few things this month until that car repair is paid off."

Joyce

[lautzu]

I don't always play whack-a-mole with all categories, wanting to leave some of that overspending there in big, red, ugly numbers as a visual reminder to myself. But except for reimbursements, I never disable Rule 4.