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URL:  http://boards.fool.com/ishtar-probably-a-silly-question-but-just-31205762.aspx

Subject:  Re: Got debt? Date:  4/11/2014  3:09 PM
Author:  ishtarastarte Number:  308212 of 312027

Ishtar,

Probably a silly question, but just wanted clarification. So if you allocate $50/month for car repairs but don't use it that month, what do you do with that $50. Does it sit in your checking account or do you set it aside in a savings account? And do you have subcategories in your savings account? Or does house maintenance, car maintenance, annual insurance premiums, vacation fund, etc. all get thrown together in one account? And what happens if you have a surplus? Does it roll-over into the next year, go into more permanent savings, or what?



First of all, you have to realize, I make less money than your nanny - I really wasn't kidding about that, with VA disability payments, a contract job and side business. So my needs and your needs are very different. I don't have a lot that rolls over (although the contract gig is getting better and I'm starting to).

That said, YNAB doesn't care what bucket (account) your money is in. It's actually more difficult to use YNAB if you have a zillion savings accounts and sub-accounts (trying to match category balances and account balances have driven a few people crazy - most people end up streamlining accounts after using YNAB for awhile). The bulk stays in my checking.

But I don't spend based on my checking balance, I spend based on my category balance in the YNAB budget.

So, there's $2,200 in my checking account right now, but only $173.72 available for groceries, $105.05 for gas, and so on.

One of my "savings" categories is travel, and I have $50.99 so far. My emergency fund is (FINALLY) growing. When I hit $x that I haven't had to "Whack a Mole" with in a couple of months, I'll likely move that to savings.

"Whack a Mole" in YNAB (so-named by our very own Patzer) is when you have to reallocate funds.

For example, let's say I spend $185 on groceries. That means I've spent more than I planned to in that category. I'll probably have to take that money from one of my other categories, likely travel, since it's the lowest priority, to cover it.

I WANT a lot of those categories to roll over. I want to to build a decent emergency fund. I want to save money to travel. I want to be able to buy hobby materials. I want to be able to give gifts when events pop up. So, yes, if I allocate funds and don't use them, they sit there and roll over month to month, hopefully building until I need them - or they are available to reallocate to higher need items when I have a low income month.

Ishtar
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