So here's my attempt at what I'm confused about. First, let me say I have read a lot in the forums and have attended a couple of online classes, but they went a little too fast and I just didn't get the budgeting concept. I have been using YNAB since Oct. '11. Here's my situation: I get paid on the 15th and the last day of every month. My wife gets paid every two weeks. I've created a list of all reoccurring monthly bills as scheduled transactions. This has worked well for me while using YNAB and the previous product I used, MoneyDance. I know what bills are due and how much to pay for each of them. Usually what happens is when I get paid and that money is deposited into our bank account, I pay the bills that are due, leaving us with enough for gas, groceries and minor things that may crop up before we get paid again until my wife's paycheck gets deposited. When my wife gets paid, I do the same thing for that money. We end up with more money left over in the middle of the month than the very beginning/end, since most of our bills (and the most expensive ones) are due before the 15th. I follow the Working Balance like a hawk, as it's the REAL true amount I ACTUALLY have in the bank to spend. I enter transactions into YNAB on a daily basis and clear those transactions with my online bank records as they become available, again this is daily. I know EXACTLY the amount of REAL money I have at all times. However, this is where I get confused and can't seem to quite understand the budget concept. I watch the Working Balance as my real-time gauge for how much we have in our checking account. My wife eats out for lunch, I see it. We get gas, I see it. Etc. As my budget sheet gets auto-completed every month by the transactions that take place, I simply zero out the categories so I don't see that nasty red negative number...I hate it. But, that causes the next month's "budget" to be over budgeted. I've tried filling in the categories with what I "think" we'll spend on gas, groceries, etc. (things I don't have an exact amount for), while I let YNAB fill in the categories of the bills that I pay (since those are exact). All the while, my budget is crap and I don't feel like it's working for us. Should I be living by the Available to Budget for a given month, or paycheck, instead of the Working Balance? And if so, the beginning of each month is pretty tough (we pay our bills with just a few hundred dollars left over for gas, groceries, etc.), so we usually end up with the budget screen showing that I've over budgeted until we get paid again. Then we're rich!....or so it seems for a few weeks, when we have less bills due. We have one savings account with $500 in it as an emergency net that is on-budget. I use this account for my "oh crap, I forgot about that...I'll just transfer a little from here and pay it back on payday" account. sWe also have an additional savings account (also on-budget) that I transfer money into a couple of times each month for making a large extra payment on credit cards we are trying punch in the face and pay off. I desperately need to better understand how to budget and what figure to go by, so that when we talk about how much we have left after bills are paid and how much we can spend (again, I'm current going off of the Working Balance for this), I see the real picture. I hope all of this isn't too confusing. Thanks!