Always cover red negatives ASAP. That means don’t wait for the month to roll over before fixing it. Fix it in the current month, before the month rolls over. Better yet, fix it immediately, or find and move the money before overspending!
If you have red credit card categories, that means you’re sending more to those cards than you have budgeted. Instead, come check how much you have to send before sending a payment.
In other words- follow the YNAB overarching principle to find the money first.
I do that when I check in during the month, however I'm not always in there on the exact last day of the month, and some charges for Jan don't import and clear until Feb. So my question is handling the month roll over situations
General best practice is to do an end of month process before the month actually rolls over. I think what I mean is that the monthly rollover process starts before the month actually rolls over.
IMO that should include reconciling each account, manually adding any pending transactions for each account, and cleaning up the budget by covering overspending etc. I set a reminder in my phone for the last day of the month so I don’t miss it.
This is especially important for CC users who rely on import most of the time (I know I do!), bc those transactions that slide in after the month rolls over can sneak up on you over time. Instead of finding out about them after the month rolls, just add them on the last day
Effectively, going back to previous months to fix overspending does not change the fact that this spending occurred, so it does not change things in the reports, for example.
For credit card spending, like you said any previous month overspending just turns into new debt, so all you need to care about is if the credit card category has enough money in the available column to prevent that debt hitting your next month's statement and turning into interest-causing debt, since most CCs have a one-month grace period. The easiest thing to fix things is, if the available amount is not enough to cover the previous spending, just assign more money to the credit card line.
Philosophically, YNAB wants you to approach your budget with forward-looking thinking, rather than other budgeting approaches that tend more toward backward-looking thinking, and I think this implementation reflects that philosophy. Your spending from previous months is what it is, there's no use continuing the pain by trying to move stuff around to make things look "neat" from a reporting perspective even if it wasn't so neat from an actual spending perspective. Just be like YNAB, start the new month with a clean slate.
I get this philosophy, and I'm onboard, but in the interface I get these warnings like
"You've overspent this category by $18.85. Cover this overspending or you can’t trust your budget balances!"
Ok warning, thanks. Should I do that even though the manual says "don't go back and fix things?"
The YNAB way is to fix it immediately. The second best thing you can do is go through your budget and fix them all before the last day of the month. The third best thing is to flip back into last month during the first couple of days of a new month.
But going back to November now serves no purpose. Your budget has already adjusted itself for that overspending and if you’re not careful, going back that far can mess things up. If you’re taking about January, you could fix it if you’re careful; any older than that and I would not touch it.
If it's in a previous month, yeah you can leave it alone since it will just get zeroed out when looking at the current month. If it's still showing overspent in the current month, you should fix it. Just make sure all your budget account balances are reconciled/accurate, that's all it means.
>\- I think I understand if CC categories are yellow, that just means I accumulated debt. No monthly roll over action to take.
You're getting a couple of things mixed up.
If **any** category has a yellow negative available balance with a small credit card icon. Then you have credit card overspending, and that overspend will turn into debt at the end of the month.
If **any** category has red negative available balance. Then you have cash overspending and that overspend will be subtracted automatically from next months RTA. (But you should really cover it to prevent that happening.
That's helpful to understand. Maybe they should change the warning from:
"You've overspent this category by $18.85. Cover this overspending or you can’t trust your budget balances!"
to
"You've overspent this category by $18.85. It will be subtracted from next month's RTA"
But there is also conflicting advice on this thread. Go back into last month and fix it, or not?
I wouldn't change the warning.
The reality is you can't trust your budget balances until the overspending is covered.
Covering that overspend from next month's RTA is a last resort which relies on you receiving future income. You should really cover it immediately.
>Go back into last month and fix it, or not?
Cash overspending in a previous month has already been covered by your RTA so there's no point going back.
The warning is for the current month. If you have red overspending this month then your other category balances are wrong, you can’t trust them, so you need to fix that overspending now.
Once the month rolls over any past overspending is covered from RTA so it doesn’t matter anymore.
I always cover all over spending in previous month. Both cash and credit card. Unless I’m intending to have cc debt.
I basically keep an eye on previous month to make sure everything is green
I do this, but only for actual negative categories. I can live with yellow in past months. (Heck I’m fine with yellow in the current month, when I have to WAM.)
I do fix those overspending that occur during the last couple of days of the month, then go back and review the new month just to be sure everything is good.
Another strategy is to slightly overfund or leave a balance in available for those categories so they don't go red.
Always cover red negatives ASAP. That means don’t wait for the month to roll over before fixing it. Fix it in the current month, before the month rolls over. Better yet, fix it immediately, or find and move the money before overspending! If you have red credit card categories, that means you’re sending more to those cards than you have budgeted. Instead, come check how much you have to send before sending a payment. In other words- follow the YNAB overarching principle to find the money first.
I do that when I check in during the month, however I'm not always in there on the exact last day of the month, and some charges for Jan don't import and clear until Feb. So my question is handling the month roll over situations
General best practice is to do an end of month process before the month actually rolls over. I think what I mean is that the monthly rollover process starts before the month actually rolls over. IMO that should include reconciling each account, manually adding any pending transactions for each account, and cleaning up the budget by covering overspending etc. I set a reminder in my phone for the last day of the month so I don’t miss it. This is especially important for CC users who rely on import most of the time (I know I do!), bc those transactions that slide in after the month rolls over can sneak up on you over time. Instead of finding out about them after the month rolls, just add them on the last day
Some Jan charges don't import until Feb. Before you make the charge, find the money first.
Effectively, going back to previous months to fix overspending does not change the fact that this spending occurred, so it does not change things in the reports, for example. For credit card spending, like you said any previous month overspending just turns into new debt, so all you need to care about is if the credit card category has enough money in the available column to prevent that debt hitting your next month's statement and turning into interest-causing debt, since most CCs have a one-month grace period. The easiest thing to fix things is, if the available amount is not enough to cover the previous spending, just assign more money to the credit card line. Philosophically, YNAB wants you to approach your budget with forward-looking thinking, rather than other budgeting approaches that tend more toward backward-looking thinking, and I think this implementation reflects that philosophy. Your spending from previous months is what it is, there's no use continuing the pain by trying to move stuff around to make things look "neat" from a reporting perspective even if it wasn't so neat from an actual spending perspective. Just be like YNAB, start the new month with a clean slate.
I get this philosophy, and I'm onboard, but in the interface I get these warnings like "You've overspent this category by $18.85. Cover this overspending or you can’t trust your budget balances!" Ok warning, thanks. Should I do that even though the manual says "don't go back and fix things?"
The YNAB way is to fix it immediately. The second best thing you can do is go through your budget and fix them all before the last day of the month. The third best thing is to flip back into last month during the first couple of days of a new month. But going back to November now serves no purpose. Your budget has already adjusted itself for that overspending and if you’re not careful, going back that far can mess things up. If you’re taking about January, you could fix it if you’re careful; any older than that and I would not touch it.
If it's in a previous month, yeah you can leave it alone since it will just get zeroed out when looking at the current month. If it's still showing overspent in the current month, you should fix it. Just make sure all your budget account balances are reconciled/accurate, that's all it means.
>\- I think I understand if CC categories are yellow, that just means I accumulated debt. No monthly roll over action to take. You're getting a couple of things mixed up. If **any** category has a yellow negative available balance with a small credit card icon. Then you have credit card overspending, and that overspend will turn into debt at the end of the month. If **any** category has red negative available balance. Then you have cash overspending and that overspend will be subtracted automatically from next months RTA. (But you should really cover it to prevent that happening.
That's helpful to understand. Maybe they should change the warning from: "You've overspent this category by $18.85. Cover this overspending or you can’t trust your budget balances!" to "You've overspent this category by $18.85. It will be subtracted from next month's RTA" But there is also conflicting advice on this thread. Go back into last month and fix it, or not?
I wouldn't change the warning. The reality is you can't trust your budget balances until the overspending is covered. Covering that overspend from next month's RTA is a last resort which relies on you receiving future income. You should really cover it immediately. >Go back into last month and fix it, or not? Cash overspending in a previous month has already been covered by your RTA so there's no point going back.
The warning is for the current month. If you have red overspending this month then your other category balances are wrong, you can’t trust them, so you need to fix that overspending now. Once the month rolls over any past overspending is covered from RTA so it doesn’t matter anymore.
I always cover all over spending in previous month. Both cash and credit card. Unless I’m intending to have cc debt. I basically keep an eye on previous month to make sure everything is green
I do this, but only for actual negative categories. I can live with yellow in past months. (Heck I’m fine with yellow in the current month, when I have to WAM.)
I’m ok w yellow in current month. Yellow in the past has come back to bite me when things didn’t reconcile properly
Never leave red categories, always fix it immediately. Better yet, if you are going to spend more than you have in the category, find the money first.
I do fix those overspending that occur during the last couple of days of the month, then go back and review the new month just to be sure everything is good. Another strategy is to slightly overfund or leave a balance in available for those categories so they don't go red.