Because you use your budget to make spending decisions, your records in YNAB need to be in complete agreement with your bank’s records – this process is called reconciliation.
Your transactions have one of three statuses in the far right-hand column of your account register. When your transactions are reconciled, you know your budget and your bank's records are in agreement!
- Uncleared: Transactions that your bank hasn’t processed are uncleared and have a gray C at the right-hand side of the transaction line.. A transaction might be uncleared because your bank hasn’t yet received notice of the transaction, or if you wrote a physical check that hasn’t been cashed.
- Cleared: Transactions that your bank knows about and have finished processing are cleared and are marked as cleared with a green C symbol at the right-hand side of the transaction line. If you import transactions, many of them will be cleared in YNAB automatically.
- Reconciled: Once transactions have been reconciled, using the process described below, they are locked and marked with a green lock symbol.
If you've been keeping up with Direct Import and your mobile device, there's a good chance you're already in agreement with your bank.
The golden path
- Log onto your bank’s website and check your current balance.
- In YNAB, click Reconcile Account at the top of your account register.
- Is your bank’s balance from step 1 the same as the cleared balance that YNAB is showing you? If it is, click Yes. You’re reconciled!
When you need a few more steps
If your balance doesn't match, you may need to add transactions that are missing and make sure the cleared status on your transactions is correct.
- If the two balances are not the same, click No and enter the balance from your bank’s records in the field provided. The difference between the two balances is shown at the top of your account register.
- If there are transactions that appear on your bank’s list but are not entered in YNAB or not marked cleared in YNAB, make sure they are entered and cleared.
- If you have a transaction in your YNAB register that is not in your bank’s records at all, make sure it is not marked cleared in YNAB.
- Keep making adjustments like these until the blue bar at the top of your register displays the Finish Reconciliation button. Click there and you’re done!
If there is a difference between your bank statement and your YNAB records that you cannot find, create an adjustment transaction and move on. Get back to budgeting and decision making!
Want a feature film version of all of that? Here you go!