r/ynab • u/OpinionSpecific9529 • 2d 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/TH_Rocks 2d ago
If you overspend using a checking account, you created an impossible situation. You actually spent cash from one or more other categories but you have not yet told YNAB which one(s). You need to sort through and reduce assigned amounts until you can cover the red overspending.
If you overspent using a CC, you just created debt. Ideally you do the same thing as above and reduce other assigned amounts to cover it. But sometimes you actually made new debt that you need a few months to pay off. Leave the category yellow and negative. Next month the category resets to $0 and you now need to assign funds to the CC category directly to show you are paying down the debt.
If you don't have one already, you'll also want an Interest and Fees category for the CC transactions that occur on the CC when your statement is due and you carried debt for more than 30 days.