Bank Balance and Next Month Buffer

comp_addictcomp_addict Posts: 14Member
edited January 2012 in Desktop
It is my understanding that if I have spent all the money I have budgeted then the buffer for next month and my balance should be in sync. Please correct me if this isn`t a bug.
Post edited by Unknown User on


  • mozzie61mozzie61 Posts: 2,046Member, Beta Tester
    This ain't necessarily so (in fact it's rarely so for most YNABers).

    Prior to error checking many of us "balanced" our budget using Patzer's formula. This formula states:

    Total Category Balance + Available to Budget + Income Available Next Month = Sum of On-Budget Accounts

    If you look at the formula at the bottom of the YNAB budget screen you can see next month's starting YNAB buffer is made up of
    Available to Budget plus Income available next month minus any Overspending, so your buffer will only equal the Sum of On-Budget Accounts if all your category balances are zero going into the next month (or your overspending for the month is the same as your negative category balance which is unlikely other than in the first month). As one of the key principles of YNAB is to build category balances for those rainy days (expected and unexpected) and other savings then it is unlikely your buffer will ever be the same as your accounts total.

    For similar reasons budgeted in YNAB doesn't always mean spent as many expenses I am budgeting for this month won't come due for many months hence e.g. Christmas 2012, Vacation 2013. The build up of these types of funds means our buffer will never equal our bank balance. Knowledge of Patzer's formula is not compulsory as error checking takes care of the maths, but hopefully it helps explain why your buffer dollars will be contained within your on-budget accounts, but will rarely be the same as the total of those accounts.
  • BooksAreNerdyBooksAreNerdy Posts: 24Member
    From what I understand, this is not the case. A lump of the money you budgeted should not be spent every month. Like car maintenance, home maintenance, car registration, vet care, etc. These are expenses that happen rarely, but WILL happen eventually. You can have a pretty good estimate of what you need to be 'saving' for these events and they are 'saved' in your checking account, but are not really 'available' to spend. So, some of your budgeted money is to spend on monthly needs, and some of it is going to hang out in your account. So, even if you spend all of our budgeted money, there will still be a bit left over for these rainy days. Hence, your account balance will always be just a tad (or a lot) higher than your buffer. Hope that helps, I am new to all of this so take it with a grain of salt! :)
  • comp_addictcomp_addict Posts: 14Member
    Yes, makes perfect sense guys, but when the available to budget is more than the bank balance, do I have a problem?
  • mozzie61mozzie61 Posts: 2,046Member, Beta Tester
    Yes, makes perfect sense guys, but when the available to budget is more than the bank balance, do I have a problem?
    I would say yes maybe, depends on how many accounts make up the bank balance you are referring to and how they have been set up in YNAB (or not).

    Does Patzer's formula work when you fill in your dollar amounts?
  • comp_addictcomp_addict Posts: 14Member
    Not sure how to work Patzer`s formula with a negative balance. If you are a part of the YNAB team I`d like to send my file to you to take a look and advise!
  • Turf_HackerTurf_Hacker Posts: 8,517Member, Moderator, YNAB Team, Beta Tester
    While Mozzie isn't part of the team (a great guy, though!!), I would be willing to take a look at your file. PM me in the forum, and I'll provide you an e-mail address you can send your file to for analysis.
  • mozzie61mozzie61 Posts: 2,046Member, Beta Tester
    Thanks for the compliment Turf Hacker.

    As we used to say back in my air force flying days when the instructor put the plane in a death defying spiral UA (unusual attitude) while under the instrument hood and we had no idea which way was up or down "handing over, SIR!". :D

    You're in good hands comp_addict.
  • comp_addictcomp_addict Posts: 14Member
    Hi Mozzie

    I am sorry if I came across wrong!! I appreciate you taking the time to respond, MIGHT!!
  • mozzie61mozzie61 Posts: 2,046Member, Beta Tester
    No offence taken comp_addict. I'm happy to assist when and where I can, but I'm also happy to let Turf Hacker (and Malisa) do the hard yards when things get messy.

    I am interested in finding out if your problem/query was resolved, and how, so be sure to report back here (now I'm sounding like the teacher :)).
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