Have you ever logged into your budget, seen a new word and asked, "What does that mean?" 🧐 You aren't alone, my friends!
Like most apps, YNAB has its own unique language for actions and features within the app. Fortunately, this handy guide will bring you up to speed on that language! Familiarizing yourself with a few key terms will quickly improve your overall budgeting experience, and additional resources are linked below, if you’d like to learn more about a specific topic.
Account Register: The Account Register is where your transactions are listed and you can add, edit, or delete transactions. Your account registers should be exact mirrors of your accounts at your banks, and you can verify that by using our Reconcile feature. Your accounts can be Budget Accounts or Tracking Accounts (see the entries below for more info!)
Activity Column: The Activity column is the sum of all transactions that have been made in that category for the current month. This number can be positive or negative.
Assigned Column: You'll budget dollars by assigning them to categories. The number in the Assigned column is the total amount you’ve assigned for the month. This number can be negative, if you’ve un-assigned, or moved more money out of the category than you originally put in--and that’s okay!
Auto-Assign: The Auto-Assign options make it easy to budget & assign dollars to multiple categories at a time, based on Targets or how much you've spent or assigned in the past. Budgeting (and math!) are simplified, which keeps your focus where it belongs: on your decisions.
Available Column: The Available column is where you look to guide your spending decisions. It’s the money you have available to spend. Money left in the Available column at the end of the month will carry over into the next month, while negative amounts do not.
Budget, Budgeting: Budgeting is when you make a realistic, flexible plan for the money that you have in your possession right now. Your Budget is roadmap of your priorities!
Budget Accounts: Budget Accounts are the bank accounts you usually spend money from, or want to use in the near future. Checking, savings, and credit card accounts are the most common types of Budget Accounts. The money in budget accounts is part of your budget (if you have $500 in your checking account, and $500 in your savings account, your budget will have $1000 in it).
Budgeted Spending: When you spend up to the amount in your Available column (but not more!), that is Budgeted Spending.
Category, Category Group: Categories in YNAB represent your spending or saving priorities. When you assign dollars to a category, it’s like putting cash in an envelope. You are assigning a job to those dollars (so your categories should represent your priorities!). You can group similar categories together in a Category Group to keep your budget organized.
Cleared Balance: Your Cleared Balance in YNAB is the sum of all of the cleared transactions in your Account Register. These are the transactions both you and your bank know about, and they’ve been marked as Cleared with your bank, too. When you reconcile your account, you compare your cleared balance in YNAB to your bank balance. Read more about the other balances in your account register here!
Credit Card Payment Category: The Credit Card Payment category is automatically created when you add a credit card account in YNAB. The Available amount in this category is the amount of money you’ve set aside in your budget to pay to the credit card company. If your Credit Card Payment Category numbers don’t look right, start here!
Direct Import: Direct Import brings in transactions to YNAB if you’ve connected your bank accounts. Transactions import once they clear your bank (which can take a day or two), so it's best to enter your spending right away. When transactions are imported, they'll match up with the ones you entered—and reconciling will ensure that no transactions have been missed between you and your bank. Having trouble with a connection? Try our Troubleshooting steps!
Overassigning: If your Ready to Assign is red, you've assigned more money to your categories than you have on hand in your accounts! This means you've given jobs to money that's not in your accounts, which makes it impossible to trust your budget. Fortunately, it's an easy fix. Reduce the amount assigned to your categories until you're back to zero.
Overspending, Cash: Immediate action is needed! You have overspending that happened in a checking, physical cash, or other debit account. This means you’ve spent dollars that are currently assigned to other categories. Use Rule 3 to cover that overspending so you can trust your budget.
Overspending, Credit: You have overspending that happened on a credit card. This means you’ve spent money borrowed from your credit card company that your budget can’t pay back from your checking or cash accounts. If you don’t want to increase your debt, use Rule 3 to cover that overspending.
Paid In Full: You have enough set aside to pay your credit card down to $0, even if you choose to pay the statement balance instead. The Credit Card Payment category Available amount should be a green, positive number that matches the negative working balance owed on your card. Doesn’t match? Read more about that here!
Ready to Assign; Inflow: Ready to Assign: Your Ready to Assign is the money in your accounts that doesn’t have a job in your budget (yet). If you have $1000 in your accounts, but have only assigned $750, your Ready to Assign will have $250 left. If your Ready to Assign is red, you’ve overassigned, so you need to remove money from your categories until it's back to zero. When you get new money, you’ll categorize it as Inflow: Ready to Assign, and it will appear in your Ready to Assign so you can give those new dollars jobs, too.
Target: Targets allow you to choose how much you would like to spend, save, or set aside over time in a category. When you have Targets set up in all of your categories, you’ve created a Budget Template, which can tell you how much money you need to earn each month. With Targets, you can also use Auto-Assign to help you quickly assign money to your categories!
Tracking Account: Tracking Accounts are the loans or investment accounts that you want to keep an eye on, but can’t use the money for your day to day spending. The money in tracking accounts does not affect your budget. You only set up these accounts to track your balance. Mortgages, student loans, and 401ks are all good examples of tracking accounts.
True Expenses: True Expenses are large, less-frequent expenses that don’t happen every month. Think car registration, home repairs, vet expenses, holiday gifts, etc. You may have heard these called Sinking Funds or an Emergency Fund. Use Targets to help you save for these!
Uncleared Balance: Your Uncleared Balance in YNAB is the sum of all of the uncleared transactions in your Account Register. These are the transactions that your bank doesn’t know about yet, or are still pending with your bank. You can enter your uncleared transactions as soon as they happen so that your budget doesn’t forget about that last-minute Target run you made (even if you do).
Working Balance: Your Working Balance in YNAB is the sum of your Cleared and Uncleared Balances. The money in your budget is based on your Working Balance, which is why it’s important to reconcile regularly (we recommend once or twice a week)!
Zero-Based Budgeting: Every dollar gets a job. So, if you give more money to one category, you have to give less to another. That is zero-based budgeting. And it works, because it encourages you to clarify your priorities. This is the YNAB Method in action!