Overspending on Mobile
It happens. All that matters is what you do about it.
If you're perfect, stop reading. If you're like the rest of us, we have GREAT. NEWS. Having a budget doesn't mean you have to get everything right. And it definitely doesn't mean you'll never overspend. So let that go and read on.
Ideal: Cover it Now
Overspending happens whenever you spend more in a category than you had Available. If a category isn't grey or green, it needs your attention.
- If your overspending created a red category balance, that means you've overspent with cash. Not necessarily literal cash, but maybe with your checking or savings account.
- If it's yellow, your overspending happened on a credit card. (If you spent with both cash and credit cards in your overspent category, YNAB takes the cash out first for accounting purposes.)
The important thing? This is where a traditional budget says you've failed. It's where a YNAB budget says, "You're human. Adjust." We've all been there.
How to adjust? Move money. You made a plan originally, but now you've got to change it. Look for categories that are green where you can cut back and move money to your overspent category. That's it. No guilt. Maybe a lesson learned, sure—but no guilt.
Can't Adjust Now?
Sometimes it happens. You overspend and you just can't adjust now. (see: Not Perfect above). Here's what happens:
When you overspend with cash, you spent all the money in that category, plus some money from your other categories—so there is a risk of over-drafting your actual bank account. Because of this, it is important that you hold your budget accountable. YNAB does this by subtracting any cash overspending from your To be Budgeted in the following month.
When you overspend with a credit card, you've racked up additional debt—though no actual cash has left your budget or accounts. To reflect this, uncovered credit overspending becomes a part of your credit card balance at the end of the month. You'll see the category that you overspent goes to $0.00 in the following month—but you now have more debt to budget for in your credit card payment category.
Cash vs Credit
Cash overspending is more urgent in the here-and-now, because you've got less money on hand to adjust and adapt. That's why it's red. But beware of credit overspending—don't let a little yellow, or the fact that you still have cash in hand, leave you piling up debt. Cover your overspending no matter what the color whenever you can!