Another YNAB question
April 18, 2017 11:32 AM Subscribe
If you use You Need a Budget, a question: How do you account for buying things on the credit card that you have saved for in cash?
Just started YNAB. I give myself $20 cash per week for fun money--coffee, drinks with a friend, etc. Let's say I save my $20 for three weeks because I want to augment my clothing budget ($40 a month, which is already spent for April) and order a $60 blouse online, which, when I categorize the transaction, shows that I am $60 overspent in the clothing category for April. How do I pay myself back?
I realize I could deposit that $60 back in the bank and up my April clothing budget to $100, but that seems like a clumsy workaround. Any ideas?
Just started YNAB. I give myself $20 cash per week for fun money--coffee, drinks with a friend, etc. Let's say I save my $20 for three weeks because I want to augment my clothing budget ($40 a month, which is already spent for April) and order a $60 blouse online, which, when I categorize the transaction, shows that I am $60 overspent in the clothing category for April. How do I pay myself back?
I realize I could deposit that $60 back in the bank and up my April clothing budget to $100, but that seems like a clumsy workaround. Any ideas?
Where did the $20 come from? YNAB doesn't care about accounts when you budget.
I do something similar - I have a "Spending Money" budget category that gets money each month, but it's just a budget category, not any specific account. So when I buy $60 worth of clothes, the account might be cash, but the category will be "Spending Money".
posted by Nonsteroidal Anti-Inflammatory Drug at 11:36 AM on April 18, 2017
I do something similar - I have a "Spending Money" budget category that gets money each month, but it's just a budget category, not any specific account. So when I buy $60 worth of clothes, the account might be cash, but the category will be "Spending Money".
posted by Nonsteroidal Anti-Inflammatory Drug at 11:36 AM on April 18, 2017
Response by poster: I draw out a certain amount each week from the ATM but I transfer it to an account called "cash," which is an envelope in the kitchen drawer. From this account I pay my allowance, my kid's allowance, and various cash transactions (quarters for the laundry, babysitter, etc) and then categorize all the "withdrawals" from the envelope weekly. So I generally don't spend all my allowance and would sometimes like to buy myself a treat online, but I don't know how to pay myself back.
posted by pipti at 11:43 AM on April 18, 2017
posted by pipti at 11:43 AM on April 18, 2017
Ah, so "fun money" is a category that generally comes out of the "cash" account? In that case just categorize the blouse purchase as fun money/allowance. NSAID is right-- doesn't matter which account the transaction came from.
posted by supercres at 11:47 AM on April 18, 2017 [1 favorite]
posted by supercres at 11:47 AM on April 18, 2017 [1 favorite]
Response by poster: Sorry, "fun money" is my term for Metafilter. It's actually categorized as "Allowance." Allowance comes out of the cash account.
If I categorize the $60 blouse as "allowance," and I have only $40 left in my "allowance" category for April (because I budgeted $100 for April allowance; there are 5 Sundays in April and I get $20 every Sunday), then I will be over budget for allowance for April. I want to pay for the blouse with past allowances, if that makes sense.
I've now typed allowance so many times it looks like a gibberish word.
posted by pipti at 11:54 AM on April 18, 2017 [1 favorite]
If I categorize the $60 blouse as "allowance," and I have only $40 left in my "allowance" category for April (because I budgeted $100 for April allowance; there are 5 Sundays in April and I get $20 every Sunday), then I will be over budget for allowance for April. I want to pay for the blouse with past allowances, if that makes sense.
I've now typed allowance so many times it looks like a gibberish word.
posted by pipti at 11:54 AM on April 18, 2017 [1 favorite]
So if $40 is left in April, is the remaining $20 that you need left over from March? Is that the past allowance? Under spending from a given month should just flow right into the next month's balance.
(Sometimes YNAB surprises you with overspending that you didn't know was happening, especially when credit cards enter the mix. That could be something that's happening here as well.)
posted by Nonsteroidal Anti-Inflammatory Drug at 12:04 PM on April 18, 2017
(Sometimes YNAB surprises you with overspending that you didn't know was happening, especially when credit cards enter the mix. That could be something that's happening here as well.)
posted by Nonsteroidal Anti-Inflammatory Drug at 12:04 PM on April 18, 2017
Or wait, are you saying that if you spend $60 on clothes out of "Allowance", then you won't have $20/week left for the rest of the month?
posted by Nonsteroidal Anti-Inflammatory Drug at 12:10 PM on April 18, 2017
posted by Nonsteroidal Anti-Inflammatory Drug at 12:10 PM on April 18, 2017
Response by poster: Sorry for all the commenting, this will be the last one. I'm saying that I have been saving my cash allowance (from February and March) in my wallet and have a surplus and want to buy myself a treat. If I want to buy something in a store, I just pay cash and it's no problem, the transaction isn't even recorded. But if I want to buy something online, I have to figure out how to pay myself back, because even if I categorize it as "allowance," I will still be over budget for April--even though I have the money in my wallet.
I'm gathering that the best workaround for this one occasion is to deposit the money back in the bank and raise the category amount. And then going forward, it sounds like the best plan is simply not to take my allowance every Sunday if I don't need it for the week, but let it accrue, so I can spend it on clothing or other treats online if I want to. Yes?
posted by pipti at 12:16 PM on April 18, 2017
I'm gathering that the best workaround for this one occasion is to deposit the money back in the bank and raise the category amount. And then going forward, it sounds like the best plan is simply not to take my allowance every Sunday if I don't need it for the week, but let it accrue, so I can spend it on clothing or other treats online if I want to. Yes?
posted by pipti at 12:16 PM on April 18, 2017
Ok, I think I see. You're moving $20 from the envelope to your wallet every week, and that's the outflow transaction that you're categorizing as allowance?
I would put $60 cash back in the envelope (not the bank, assuming that's more annoying) and call that an inflow transaction to the "cash" account in YNAB, categorized as "allowance". Or "clothing"-- however you want to categorize the blouse credit card transaction. Or delete the three previous $20 allowance transactions (balance of allowance category will go up by $60) and then categorize the blouse as allowance.
posted by supercres at 12:25 PM on April 18, 2017 [3 favorites]
I would put $60 cash back in the envelope (not the bank, assuming that's more annoying) and call that an inflow transaction to the "cash" account in YNAB, categorized as "allowance". Or "clothing"-- however you want to categorize the blouse credit card transaction. Or delete the three previous $20 allowance transactions (balance of allowance category will go up by $60) and then categorize the blouse as allowance.
posted by supercres at 12:25 PM on April 18, 2017 [3 favorites]
(The fuzzy line here, like for me and my wife, is deciding when money has "left" the budget. We just recently changed our individual wallets to budget accounts so I wouldn't have to keep asking what each ATM withdrawal of hers was spent on. I just record it as a transfer to her wallet, and she can either record join transactions if she spends the cash on something we're jointly budgeting for, or I just categorize it as her personal spending later if she hasn't recorded anything for it. I'd go 100% cashless if I could ¯\_(ツ)_/¯)
posted by supercres at 12:29 PM on April 18, 2017
posted by supercres at 12:29 PM on April 18, 2017
The fuzzy line here, like for me and my wife, is deciding when money has "left" the budget.
Yep, that's what can make things tricky. I have "NSAID Wallet Cash" as an account, which means when I pull money out of an ATM, there's no budget transaction, it's just a transfer between the checking account and the cash account. Then when I spend money, that expense goes under the appropriate budget category coming out of the cash account.
In your case, if you're counting the ATM withdrawal as an expense, then you've effectively told YNAB that you don't have that money to spend any more (because it was "spent). As supercres says, you'll need to make an inflow make that money available again for budgeting in YNAB.
posted by Nonsteroidal Anti-Inflammatory Drug at 12:51 PM on April 18, 2017
Yep, that's what can make things tricky. I have "NSAID Wallet Cash" as an account, which means when I pull money out of an ATM, there's no budget transaction, it's just a transfer between the checking account and the cash account. Then when I spend money, that expense goes under the appropriate budget category coming out of the cash account.
In your case, if you're counting the ATM withdrawal as an expense, then you've effectively told YNAB that you don't have that money to spend any more (because it was "spent). As supercres says, you'll need to make an inflow make that money available again for budgeting in YNAB.
posted by Nonsteroidal Anti-Inflammatory Drug at 12:51 PM on April 18, 2017
Here's a YNAB help topic addressing this issue: http://docs.youneedabudget.com/article/185-handling-cash. I use the "cash account" method.
posted by Nonsteroidal Anti-Inflammatory Drug at 12:55 PM on April 18, 2017 [1 favorite]
posted by Nonsteroidal Anti-Inflammatory Drug at 12:55 PM on April 18, 2017 [1 favorite]
I think the crux of the issue here is that you never spent the allowance money but you have told YNAB it is spent. The fix would be to go back to February and March and bring YNAB up to speed on what you actually did and did not spend - for whatever weeks you did not spend your allowance, adjust the entries to reflect the surplus that you actually have.
posted by namewithoutwords at 12:58 PM on April 18, 2017 [3 favorites]
posted by namewithoutwords at 12:58 PM on April 18, 2017 [3 favorites]
So you've got a physical envelope with three $20 bills in it, an item on Amazon that you want, and a desire to have the numbers budget come out even? Deposit the cash, label the transaction as "allowance" expense with value negative$60. Then swipe the card and label that transaction as "allowance", expense of $58.99. Net budget in "allowance" category is the near-zero you intend.
Or more accurately, that's -$40 from previous months, $60 expense, and net $20 expense corresponding to this month's allowance.
Agreed with namewithoutwords that to really do it right you'd have to go back and tweak the "allowance" expenditures in previous months to avoid creating $40.
posted by aimedwander at 1:45 PM on April 18, 2017 [2 favorites]
Or more accurately, that's -$40 from previous months, $60 expense, and net $20 expense corresponding to this month's allowance.
Agreed with namewithoutwords that to really do it right you'd have to go back and tweak the "allowance" expenditures in previous months to avoid creating $40.
posted by aimedwander at 1:45 PM on April 18, 2017 [2 favorites]
Yes, you need to create a budget category called "Allowance" and then you can roll it over from month to month if that's what you're doing. The confusion is happening because you're removing the money from your YNAB budget when it hasn't been spent yet.
posted by Kriesa at 6:45 PM on April 18, 2017
posted by Kriesa at 6:45 PM on April 18, 2017
For me, the question is how do you treat cash in YNAB proper (^ see Nonsteroidal Anti-Inflammatory Drug)?
If cash is a "category", you would budget a category (or multiple categories) called "Cash Expenditures" and when you withdraw from an ATM or bank or whatever, that transaction would create a negative outflow that you assign as 100% to your 'Cash Expenditures" category. And now, let's say you have that extra cash left over that you decide to spend somewhere else, you could then go back and find that transaction that created the negative outflow and split it, and then assign that $20 to the clothing budget. But, now! magically, your Cash Expenditures budget is now $20 lower, so you should be able to adjust your clothing budget to be $20 higher.
I guess the alternative way, is that you can just create a "fake" transaction for yourself of depositing the $20 but not actually deposit it, and then adjust your clothing budget up by $20 to be covered by your transaction of $20. Not physically depositing it into the bank account, but just adding in a transaction. You probably could finagle a way to do this using the "cash as an account" method.
I think the important part about YNAB is just to make sure you are keeping honest about inflows vs. outflows, and not worry too too much about mechanics that seem a little weird. I.e., I think both of the above methods will yield the same outcome and allow you to better honestly track.
(Side bar... I would actually try to categorize the cash expenditures into their own categories. For me if I have a ton of cash transactions, I still want to be able to be honest in understanding how much I REAAALLY spend on groceries or fun stuff, and not let it get masked in a big category. Over time, you'll find that the reports function can really help you analyze your spending -- e.g., if I only look at outflows on categories I KNOW I have to pay no matter what, then I can figure out my bare bones survival budget. That being said, you'll learn how you want to use YNAB over time, so wouldn't worry too too much.)
(PPS, I have found the reddit YNAB subreddit to also be super super useful, especially in dealing with credit card payments and transfers between bank accounts.)
posted by ellerhodes at 8:50 PM on April 18, 2017
If cash is a "category", you would budget a category (or multiple categories) called "Cash Expenditures" and when you withdraw from an ATM or bank or whatever, that transaction would create a negative outflow that you assign as 100% to your 'Cash Expenditures" category. And now, let's say you have that extra cash left over that you decide to spend somewhere else, you could then go back and find that transaction that created the negative outflow and split it, and then assign that $20 to the clothing budget. But, now! magically, your Cash Expenditures budget is now $20 lower, so you should be able to adjust your clothing budget to be $20 higher.
I guess the alternative way, is that you can just create a "fake" transaction for yourself of depositing the $20 but not actually deposit it, and then adjust your clothing budget up by $20 to be covered by your transaction of $20. Not physically depositing it into the bank account, but just adding in a transaction. You probably could finagle a way to do this using the "cash as an account" method.
I think the important part about YNAB is just to make sure you are keeping honest about inflows vs. outflows, and not worry too too much about mechanics that seem a little weird. I.e., I think both of the above methods will yield the same outcome and allow you to better honestly track.
(Side bar... I would actually try to categorize the cash expenditures into their own categories. For me if I have a ton of cash transactions, I still want to be able to be honest in understanding how much I REAAALLY spend on groceries or fun stuff, and not let it get masked in a big category. Over time, you'll find that the reports function can really help you analyze your spending -- e.g., if I only look at outflows on categories I KNOW I have to pay no matter what, then I can figure out my bare bones survival budget. That being said, you'll learn how you want to use YNAB over time, so wouldn't worry too too much.)
(PPS, I have found the reddit YNAB subreddit to also be super super useful, especially in dealing with credit card payments and transfers between bank accounts.)
posted by ellerhodes at 8:50 PM on April 18, 2017
In cases like this I generally do deposit the cash. It's actually less clumsy than any other workaround (IMO).
posted by rabbitrabbit at 5:00 AM on April 19, 2017
posted by rabbitrabbit at 5:00 AM on April 19, 2017
Hummm,
You charge the credit card under clothing (and this is good because it leaves you with a record that you used your card).
Then transfer the $$$ from "Cash" to the credit card account (i.e pay it on YNAB).
posted by The1andonly at 5:22 PM on April 19, 2017
You charge the credit card under clothing (and this is good because it leaves you with a record that you used your card).
Then transfer the $$$ from "Cash" to the credit card account (i.e pay it on YNAB).
posted by The1andonly at 5:22 PM on April 19, 2017
This thread is closed to new comments.
posted by supercres at 11:36 AM on April 18, 2017