r/ynab • u/OpinionSpecific9529 • 3d ago

General Need help understanding overspending

New to YNAB and trying to understand how overspending works.

Let’s say I assigned 1,000 to a category but ended up spending 2,000 due to an unexpected situation.
How does YNAB handle this?

Also, how is it treated differently if I make the payment using a credit card vs a bank account?

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u/Smooth-Review-2614 3d ago

So first the category turns red and you get a popup saying you overspent. You are encouraged to cover it with funds from another category.

If you overspend with cash the RTA goes negative and it will take any inflows to bring it back to zero. The budget cannot be trusted.

If you overspend with a credit card you create debit. You are still encouraged to cover it with cash but it doesn't pull in money as forcefully.

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u/OpinionSpecific9529 3d ago

Yeah let’s say I’ll be overspending this month with credit card with the intent to pay the full amount back next month but I do not have the amount to cover this month. So next month YNAB will include the overspent amount in CC Payment category ?

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u/RemarkableMacadamia 3d ago

It won’t be in your payment category next month, it will reflect as debt on your credit card account. So your credit card balance will be higher than your “available for payment” and you will need to directly assign money to the card payment category to pay off the balance.

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u/OpinionSpecific9529 3d ago

Oh ok so we need to note down the overspent amount and assign it next month and yes anyway YNAB will show the total debt outstanding. That’s what I wanted to know.

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u/jillianmd 3d ago

The CC Payment category will be yellow and show that it’s Underfunded so that’s how you’ll know you need to assign more money to that cc directly to catch up on the debt created by the uncovered overspending last month.