You need a budget (YNAB) advice thread

mylastpound

Hi
I've recently purchased YNAB.


My question is, how do you deal with the Overdraft in YNAB?


My O/D is £1200, I don't use it, as I have a buffer on top of my savings.
But how should I deal with my OD in YNAB?


Could I use it as my buffer in YNAB and use my money that I have as a buffer as Emergency fund category instead?


I've tried you tubeing my question, but no success.


Help :-)

LannieDuck

Quick update - my paper statement came through yesterday. I'd got all my entries correct... except I'd entered my nursery fees twice. I think I'm sorted now.

Until the next problem, of course

Thanks for all the help.

nyermen

Hi mylastpound - a key part of YNAB is that all the "On Budget Accounts" will normally add up to balance of the budget (I say "normally" as if you enter income for "next month", this will produce a difference in the current month as the account balance will be higher).

With that in mind, it depends if you "need" to use your overdraft or not (reliant to get through a month).
If you don't, then it's just a temporary credit facility like a credit card that is paid off in full. If you do, then you should enter the amount (or whatever you know you need) as pre-existing debt. This debt is assigned to "Rollover" each month so that it doesn't vanish next month unless "paid off" (as below). Yes the account balances in the left bar will show a negative, but overall it will add up.

The point then, is that if you don't need to use it, it all nets off in full each month (no different to a credit card paid in full).
If you do need to use it, the push of YNAB is when you can afford, to allocate a little money to the "pre-existing debt" category each month, which is in effect, "paying it off" (ie. reducing the amount you are reliant on). Eventually it then goes to zero, and you're at the stage where you no longer "rely" on it.

I might have gone through this process myself, now no longer reliant

If the above is a bit confusing, shout, I can try and mock a scenario up and take some screenshots maybe. Also the YNAB forums may have this covered with a better example already.

BW, Peter

Pixie5740

mylastpound wrote: »

Hi
I've recently purchased YNAB.


My question is, how do you deal with the Overdraft in YNAB?


My O/D is £1200, I don't use it, as I have a buffer on top of my savings.
But how should I deal with my OD in YNAB?


Could I use it as my buffer in YNAB and use my money that I have as a buffer as Emergency fund category instead?


I've tried you tubeing my question, but no success.


Help :-)

I also have an overdraft which I don't use but it's not recorded in YNAB anywhere although my current account is "On Budget" it's only the positive balance that's shown. If I had been living in my overdraft when I started using YNAB then the balance would have come under pre-YNAB debt.

I don't use my overdraft limit as my buffer. I want my own saved. cold, hard cash as my buffer. The reason being that banks can withdraw your overdraft facility whenever they like.

mylastpound

nyermen wrote: »

Hi mylastpound - a key part of YNAB is that all the "On Budget Accounts" will normally add up to balance of the budget (I say "normally" as if you enter income for "next month", this will produce a difference in the current month as the account balance will be higher).

With that in mind, it depends if you "need" to use your overdraft or not (reliant to get through a month).
If you don't, then it's just a temporary credit facility like a credit card that is paid off in full. If you do, then you should enter the amount (or whatever you know you need) as pre-existing debt. This debt is assigned to "Rollover" each month so that it doesn't vanish next month unless "paid off" (as below). Yes the account balances in the left bar will show a negative, but overall it will add up.

The point then, is that if you don't need to use it, it all nets off in full each month (no different to a credit card paid in full).
If you do need to use it, the push of YNAB is when you can afford, to allocate a little money to the "pre-existing debt" category each month, which is in effect, "paying it off" (ie. reducing the amount you are reliant on). Eventually it then goes to zero, and you're at the stage where you no longer "rely" on it.

I might have gone through this process myself, now no longer reliant

If the above is a bit confusing, shout, I can try and mock a scenario up and take some screenshots maybe. Also the YNAB forums may have this covered with a better example already.

BW, Peter

Thank you for answering


I'm still a little confused.


I don't use my O/D at all. it just sits with my salary and savings In the one account.
Therefore, would I add in a category for O/D? and allocate the £1,200 and leave it there?


I just don't know how to handle it, I did try searching the forum and you tube.


cheers

Dandytf

1 day left ynab trial

Do I have to start a new budget if I don't purchase ynab before tomorrow?

I've kind off enjoyed the trial, think I would miss ynab went and purchased.

Think i'll try and reduce debit card payments from tomorrow and try groceries after monthly pay.

SeduLOUs

mylastpound wrote: »

Thank you for answering
I don't use my O/D at all. it just sits with my salary and savings In the one account.
Therefore, would I add in a category for O/D? and allocate the £1,200 and leave it there?

If you're not actually using your overdraft (i.e. your bank balance never goes negative between pay days), then you don't need to put it into YNAB at all. Remember that an overdraft facility is just a means to borrow, and the £1,200 available isn't actually 'your' money at all, and therefore shouldn't be budgeted.

Just pretend it doesn't exist, and only ever put it into YNAB as a debt if and when you ever do need to rely on it - hopefully never!

Ellieseleven

I've just signed up for the trial and have started receiving the e-mails. I have a strict budget anyway due to our DMP but I'm hoping that YNAB will help us identify ways of making our budget go that bit further.

I've read through this thread and you have all convinced me that I need this;)

Excited:T

Ellie x

LannieDuck

I'm sure this has been asked before in the thread (I did read it from beginning to end a couple of weeks ago), but I can't find the right posts now that I need them... is there a way of having my 'months' running from 25th - 25th instead of 1st - 1st, so that they coincide with my paycheques?

SeduLOUs

LannieDuck wrote: »

I'm sure this has been asked before in the thread (I did read it from beginning to end a couple of weeks ago), but I can't find the right posts now that I need them... is there a way of having my 'months' running from 25th - 25th instead of 1st - 1st, so that they coincide with my paycheques?

No there isn't, but it doesn't necessarily mean it's a bad thing.

The first thing to aim for is a small buffer that will carry you through those final days of the month, and that will allow you to put all of your income into the following month - i.e. the pay you receive on 25th June is held and used to pay for everything in July.

In the meantime you can either split the paycheque up (holding some back for current month and send some forward to next month), or alternatively post it all to the current month and whatever you don't budget will automatically be available in the following month anyway.