Reply to A few YNAB questions

Forum Index » Money and Finances

Reply to "A few YNAB questions "

Subject:

Emoticons





More smilies

Text Color: Font: Close Marks

[quote=Arlingtonian703][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous][quote=Anonymous]Or better yet, I can explain how credit cards work! Let me know if you have a specific aspect you’d like clarified [/quote]
Yes, don’t go back to Reddit for me  :lol: thank you for the offer!!  I’ll try to respond here or page you when I have an actual specific question. Thank u again![/quote]
No, I love talking about You Need a Budget (YNAB)! My wife and I have been using it for five years and I've helped family members get on board with it. I'll do my best to explain the credit card (CC) system in its basics here.

YNAB's system uses both Accounts and Categories. Accounts represent real world accounts where you money sits, Categories in your budget are the "jobs" you've given those real world dollars in YNAB. A CC account is basically just an account with a negative balance and the CC payment category is the category where dollars you've assigned the "pay off your CC" job are located. And YNAB's system is so slick it moves these dollars around seamlessly.

[b]An Example[/b]

Let's say you have $1,000 in your checking account. You have a credit card account you've just paid off so it has a $0 balance. And in your budget you've assigned $250 to your grocery category.

You go to Whole Foods and spend $100 on groceries, here's what happens:

1. You enter the transaction in YNAB - Whole Foods is the payee, Groceries is the category, and your CC is the account
2. When you hit enter $100 moves from your Grocery category to your CC category - so now your grocery category has $150 ($250 less $100), your CC category has $100 in it, your CC [I]account[/I] now has a ($100) balance (that's negative $100), and your checking account balance is unchanged at $1,000
3. Now you go to your CC's website and pay it off using your checking account. In YNAB you go to your CC account and click 'Record Payment' and the amount that pops up will be equal to what you have in that CC category (but you can manually change this to whatever payment amount you're making). When you hit enter your checking account will go down by $100, your CC account will go from negative $100 to $0, and your CC category will go from $100 to $0.

I don't know if that helps at all but basically spending money on a credit card will make your CC account more and more negative and YNAB will move the money from the category you spent from into the CC payment category. Paying the CC off is just transferring money from your checking account to your CC account.

Everything is right with the world if the total amount assigned to your categories is equal to the amount in your cash accounts (like checking) and your CC payment category has the same amount as your CC account (but opposite, if you have a negative $100 balance you'll have positive $100 in your CC payment category)

This assumes you're paying your CC off each month, things work the same but it's a bit different if you spend more on CC than you have money in the bank.

Anyway, hope this helps! Happy to answer specific questions if you think of any.[/quote]
NP here but I wonder if this has changed in the past 10 or so years. When we tried to use YNAB about 10+ years ago, we really struggled with (a) using credit cards and (b) having multiple bank accounts. Does YNAB still preach that you should only have one credit card and one bank account?[/quote]
If you tried YNAB a decade ago it was YNAB4. They completely revamped everything (now called New YNAB or nYNAB) around 2016.  I don’t have any experience with YNAB4 but you can certainly have as many cards and accounts as you want.

I do know some people like to continue keeping separate accounts for different types of spending. Like an account just for real estate taxes. An account for presents. That sort of thing is a ton of extra hassle for zero benefit with YNAB. You can do everything with one account and then use categories in YNAB to allocate money to different jobs.[/quote]
Current YNAB4 user here (yes you read that correctly) with multiple credit cards and bank accounts.  I believe that YNAB handles cc's and bank accounts similarly.  The main difference with New YNAB is that it moves away from the envelope system.  You don't know where you stand budget-wise on a day-to-day basis like you did with YNAB4.  If you want something similar to YNAB4, I think Buckets is your best move.  I posted upthread that the key to cc's is in the setup.  If you are set up right, making purchases is applied to the card account and paying the bill is done every month with a transfer from the bank account. [/quote]

I know from the YNAB subreddit that there are plenty of diehard YNAB4 adherents but since I've never touched the software the differences between YNAB4 and nYNAB are very abstract to me. I hear talks about red arrows and stealing from the future but since nYNAB is all I've known for five years I just keep chugging along.

EDIT: and yes, I made an account on DCUM so I can edit posts. FREEDOM![/quote]

Options

	Disable HTML in this message
	Disable BB Code in this message
	Disable smilies in this message

Review message

Search Recent Topics Hottest Topics