Ernie's Budget Categories

[@josiahlyoung]

This was great! Just a thought for future episodes, I found I needed to pause a lot to look at the categories-maybe doing some more screen sharing would make it easier to keep up with things as they are discussed. Otherwise, super cool to dig into some practical examples!

[@brendan31415]

"59 categories". "So you have a lot of categories". Ha ha ha. I only have 176 categories. Not too many. Every category has a specific goal. Been using YNAB since 2008.

[@Moneycoachangela]

Guys. Seriously. I get so excited adding new categories & giving each dollar a job. I never knew I was a budget geek but I totally am!! 😂🙌🏻💃🏻

[@MrsMCRich]

Super-categories: They Call Me the Working Man (Travel and Expenses) We Are Family (everything spent on our immediate family: groceries, clothes, tax prep, etc) It's Five O'Clock Somewhere (dining out, entertainment, alcohol) I Don't Know What's Wrong With These Kids Today (all things kids: allowance, band, school) Who Let the Dogs Out (dog food, vet, treats) Vacation, All I Ever Wanted (vacations, duh.) Celebrate Good Times (holidays, birthdays, Christmas) Our House, In the Middle of Our Street (house note, homeowners, power, water, flood...) Baby, You Can Drive My Car (fuel, insurance, new car...) Video Killed the Radio Star (subscriptions, internet...) Now I Ain't Sayin' She's a Gold Digger (my personal expenses) She Works Hard for the Money (business expenses, licensing... ) Let's Do the Time Warp, Again (timeshare expenses) Sa Oops Upside Your Head (debt) Credit Credit Card Payments (yeah, I can't edit this one :( ) Your Love Is Like Bad Medicine (HSA) If I Had a Million Dollars (wish fund) There are 93 sub-categories under these super-categories. I also have 2 Hidden Super-Categories: Holiday Road, for past vacations, and Let It Go, for all the other stuff I hide. There are 28 hidden sub-categories.

[@OscartheChunk]

Ummm you are literally my hero! 🤩 Here I thought I was being all fancy with my emojis.

[@Melanie-yep]

I have a category called “random giving” but I like the sounds of “compassion” a lot more!

[@Orionrobots]

I have a "Gifts" category, and "Charity". The first is things like birthdays, home visit gifts, or random graces for friends and acquaintances. We have a separate family birthdays category for stuff like kids parties.

[@larrypapineau7702]

My categories are organized into groups such as home, auto, utilities, etc. That enables use of the reports to easily see where my money is going. Each group includes all the applicable immediate and true expenses for that group.

[@lexymcavinchey7147]

I like the idea of gearing the budget so you can easily use the reports.

[@toddw8396]

I have the 4 walls (Dave Ramsey) as main categories first: Wall 1=food Wall 2=housing and utilities Wall 3=clothing and personal care Wall 4=transportation These are the “4 walls” of every household and these are at the top Then I have the months as main categories: Jan-Dec This is where I put birthdays, subscriptions, 1 time payments, yearly memberships, car tags, etc. I found that listing these in month they were due, kept them from getting buried across numerous categories. It is more important to me to budget for it and pay it on time than have it listed specifically as a membership or software or whatever main heading. If its Jan and I’m done with that group and now it’s Feb, then I move any remaining money in these subcategories to ToBeBudgeted and hide main category Jan until next year (this hides all subcategories under Jan) no need to look at it anymore...move on to tackling Feb. Again, just be sure any extra money available is moved back to TBB before hiding. I more thing that helps me...at the beginning of the year I grab a calendar and identify months that have 5 weeks (based on Fridays in the month). Under main category Food, I will add the months that have 5 weeks for groceries. Under transportation I will add the months that have 5 weeks for fuel. So for example under main category FOOD, I have Groceries (weeks 1-4), Dining Out, Groceries Jan (week 5), Groceries May (week 5), Groceries Jul (week 5), and Groceries Oct (week 5). I do the same under Transportation / Fuel. Weeks 1-4 has 4 weeks of budget and week 5 has 1 week (to account for the extra week). On Feb 1, any money left in Jan (week 5) gets moved to Tobe budgeted and Jan (week 5) gets hidden since it is no longer needed for the year. It took me years of using YNAB to arrive at these methods...have been using YNAB since back when it was an APP and not online. It has advanced by leaps and bounds since those times. Everyone has their own systems and methods...and I certainly have revamped my own categories dozens of times. I am sharing this with the hope that it may help someone else in their YNAB journey.

[@desiraestarling2600]

I am a new YNABer but I am doing something similiar, but aiming for a 'seasonal' breakdown. I want to budget (and track) spending related to Halloween, Christmas, Winter related issues (Hello snowblower!). We do a lot of camping in the summer so I am looking forward to setting a baseline this summer and being able to plan for it for the following summer.

[@toddw8396]

@@desiraestarling2600 sounds like you are off to a great start!

[@nickabrahams3995]

Whoop Whoop - 6 minutes longer than last week... we're getting there!

[@conureron3792]

To me “rolling with the punches” is finding new monthly expenses that I hadn’t budgeted for (yet)....

[@cmdrsymstar5987]

Try a monochrome Laserjet printer - the toner is much more economical. I have a Brother that has wireless capability that has been very reliable

[@Orionrobots]

If you want to see waste, tear down an inkjet printer (it will be messy). They have big waste sponges and waste tanks. They liberally leak ink about the place. I swear by my mono laser. Plus it opens up possibilities like iron transferring and pcb making!

[@billzy31415]

Inkjet printers.. total racket! They're practically disposable!

[@Orionrobots]

My key takeaway from that was the replacement fund. I have a home maintenance fund and an emergency fund. Although we have our telly, washing machine, dishwasher and white goods ensured - we do sometimes need to replace stuff. What? Don't know yet. Perhaps I'll start with a small percentage - say 25% of my regular home maintenance fund, and place it in a replacements fund. We can then see how that works.

[@landoncayia]

Question for Ernie: why do you use a “Next Month” group rather than just budgeting the money in the future? Great video, thanks!

[@Natazavrik]

Yes! I’d love to hear about the pros and cons of each method too!

[@freesgen]

I would like to know that answer too.

[@VikingKittens]

Thank you so much for these episodes of Budget Nerds. I am pleasantly surprised how much I look forward to these!

[@YNABofficial]

Music to our ears! We love these guys :) -Hannah :)

[@OscartheChunk]

You guys are my fav. I appreciate you guys being so transparent and Ben & his catagories LMAO. I am not alone! 😁 Jumping on the nerd wagon!

[@reginasloan2201]

Tell Ernie to get the HP subscription for ink! we pay less than $6/month and they send up ink when we need it... back and color. someotime about the wireless connection lets them know when we're running low. and my husband uses alot because of work ....

[@jonont]

In the beginning of the video, you're talking about how you "do not like to keep money in TBB". I actually believe that is the lesser known 11th commandment; "thou shalt not keep money in TBB" :D Anyways, what I don't exactly understand is why you would create a "next months income category". I get paid once a month, always (with some exceptions) on the 25th. When I get paid, I go through my categories and budget money where money is missing, and when that is done I just move over to the next month and start budgeting there. Then, when the next month actually comes money has already been budgeted and we're all good to go. In other words: I budget all my money when I get it, and go into the coming month when I'm done with the current month. I'm sincerely curious about why you chose to have a "holding category" for this, and wait until the following month to budget there? :) Thank you for these videos! I think all of you at YNAB are truly awesome, and it's really nice not to feel alone in the "budget nerdiness" :)

[@kimlindsay2073]

Jon - I do the same thing...go down the list of categories when moving into the next month (instead of having a "holding" category). I like knowing that each category is covered. I would be wondering if there was enough money for the month if everything sat in a "holding" category until we rolled over into that month. I'm also curious as to the reasoning there. I've seen that a lot of YNABers do that.

[@Orionrobots]

Surely keeping money TBB is not giving every pound a job. If I have TBB that I'm not going to use - I start budgeting the next month - and so on. Getting a few months ahead gives you serious warm fuzzies. That or diverting stuff into pension/savings.

[@desiraestarling2600]

My understanding of NOT putting in the next month category is that the 'overspent' alert won't trigger if you have money in the category for next month. But it will reduce your amount in that category (I think). Not filling in for the next month can force you to deal with overages instead of 'stealing from the future'. Also, may just be a preference to fill in the next month categories as you close out the previous month, more satisfying to divvy it all up then. :)

[@elizabethflett9753]

​@@desiraestarling2600 - I just wanted to give you a HUGE shout out for your comment above!! After watching this video, I couldn't decide between a Holding Category vs. Budgeting Ahead and it was your comment really resonated with me (dealing with overspending in the current month vs. SFTF). I also tested your theory and it's 100% correct!! I had moved funds to a holding account and as expected, my TBB was at $0. So I moved $50 back up to my TBB and then budgeted it to a category group in January 2021. I also budgeted $50 for the same category group in December 2020. The ugly red overspending flag ONLY displayed when I clicked ahead to my January 2021 budget. Nothing was flagged in my December 2020 budget when I budgeted that second $50. I know me and I want the warning flags if I overspend AND I most certainly don't want to SFTF. So Holding Category it is for me, with any rollover funds from the current month or additional income to be budgeted (such as a side hustle)!

[@reginasloan2201]

my favorite part about ynab is how they handle credit cards!!

[@christinesagredo398]

Thank you for these videos about your personal categories. They helped me find a few more I need to add to my own. Namely, inspections (fireplace and HVAC) and replacement costs.

[@BodaciousWench]

Nice to know I don’t have to limit myself category-wise

[@KeithBarrowsToday]

Super-categories Credit Cards (I have 1) Ataraxia Bound (10-20%) (debts) Housing (25-35%) Transportation (10-15%) Food (10-15%) Utilities (5-10%) Life & Living (10-15%) Medical & Health (5-10%) Run for the MLB (our son) Wish Farm Wish List Paycheck Info - taxes & other deductions The percentages allow me to look at reports to make sure I am staying "in the zone".

[@frankntekim3730]

I super love this! It really resonates with me. Can you share details of your Life & Living Category group?

[@lindsaysimplified]

I hated buying printer ink so much that I just gave my printer away and figured out how to be completely digital. 😂

[@YNABofficial]

Haha! That is definitely the way to go! ~BenB

[@Orionrobots]

I find it's stuff like contracts and deeds that need wet ink. And kid's homework. A printer and scanner still seem to be essential. I still say go laserjet - it seems expensive for the printer, but you'll make it back after about 6-12 months of not buying ink.

[@valeriemartini6315]

I’m a budget nerd too. Love to budget

[@rachelstallings5460]

I've also heard Compassion also be called Random Acts of Kindness.

[@steveb2346]

Ernie - we once lived in a house built in 1946 with terracotta pipes (and roots). The city would clean them at no charge because the city “owned” the drains once they left the house. Maybe it is the same in your area?

[@conureron3792]

Interesting idea, for the holding category for next month. I might start doing that!

[@marjoleinstuurman931]

Kind of confronting, 11 category groups and 59 categories. Really that much? Wait what, oh, I have 16 groups and 145 categories. I'll remain silent here. You know what, maybe not. I'm a dreamer and I like it.

[@NettieFIRE]

It’s a bit spooky. You guys are almost coordinating your shirts again 🔮. With those sunlight rays hitting Ernie’s shirt, it seemed to mirror the white stripe section across Ben’s shirt 😳 Thanks for sharing fella’s 👍🏼

[@YNABofficial]

Haha! You're totally right! Completely unintentional (again!), but it works. Incidentally, Ernie and I just finished recording the next episode and I just realized I wore the exact same sweater. 🤦‍♂️ ~BenB

[@graciousoctober]

The items I refuse to budget for are postage stamps, shipping and envelopes. I have a miscellaneous category.

[@DebbiOverweg]

19 category groups & 152 categories for me! (I excluded CC & Wishfarm/Wishlist) :) It's what works for me to be very specific to know that I'm accounting for everything. For example I have a Gift category per family member that we buy for every birthday/Christmas so that I can also track my shopping during the year on a per-person plan. Same with a category per utility/subscription/etc with individual goals for their due dates.

[@conureron3792]

YNAB is very much like “cash envelopes”. Can do with just 1 account. I decided for 2 when someone tried to use my debit card #! Had to shut down my debit card and get a new one. So, decided to get a 2nd account as a back up.

[@pinguincoder]

I dont really get the point of the "Next Month" categories... If I get my payment for Next month guess what I just Budget it into the Next month immediately nothing left in to be budgeted

[@toddw8396]

The great thing about YNAB is that there is no wrong or right method...you get to build and organize your own way. I’m with you though, if there is money left to budget, just click to the next month and budget as far ahead as possible!

[@gailb4796]

Costco has a refill program that is supposedly less expensive. But you have to be a member.

[@saralep]

Ernie, I live in the Midwest. We have had to replace our sewer pipes... tree roots 😞

[@ErinAnnCooper]

With keeping the kids money in your account and tracking with ynab, do your kids have the ability to make purchases independently? Wondering if this would still work with teens who are out and about spending money without a parent there - I wouldn't want to give them a debit card linked to my account!

[@KkianN]

Hi there, may I know when combining likes life and auto insurance under one category, how do you set goals for them?

[@YNABofficial]

I use a "Monthly Savings Builder" Target type. Add up the total you need to save per month for both bills and add that as the target amount. YNAB will prompt you to assign that much to the category every month no matter what, regardless of your spending.

[@KkianN]

@@YNABofficial Great idea! Thanks for your reply 😊

[@john26razor340]

Ernie, you're awesome man! Great learning from you.

[@YNABofficial]

Appreciate that Josh! It was great having you in the Live Q&As last night. Happy budgeting! ~Ernie

[@shajuancollins7547]

I have an HP ink subscription and its the best thing ever lol

[@AaronHodgeSilverMSP]

Just update your passport!! It's not that expensive and you just never know when you might need to flee the country.

[@kristin1847]

I've heard lots of people mention having an income for next month category to dump paychecks into then when the new month rolls around they move the money to ready to assign and then budget it. I just budget the paycheck into the next month right away as soon as it hits my account. I'm interested why some people create a category for this? Is there some benefit that I'm missing? 🤔

[@YNABofficial]

I don't think there's a benefit to the holding category, just personal preference. I like seeing all of my money in the current month, and I also like building the next month's budget all at once (instead of paycheck by paycheck). Happy budgeting, Kristin! ~Ernie

[@jenniferhanson763]

Are the boys able to see their own account status without going into your phone? Did they have wine uploaded on their own phone for example?

[@reginasloan2201]

i totally get simplifying accounts, in regards to the kids, but what about them having their own cards and learning to budget on their own budget separate from yours...? not sure your kids ages, but this is why we have separate accounts for ours (10 and 14) but would love to simplify to ours for sure...

[@catherinewright9179]

We recently set up a separate budget in YNAB just for our son (he's 7). It's all cash and he has simple categories of "share," "save," and "spend." Now when we're at the store and he sees something he wants, we can open the app and see if he has enough spending money. As he gets older, he can create other categories. He is really excited to have his own budget in YNAB!

[@HollyPenfold]

I love this series 😀

[@NettieFIRE]

Oh bugger (as us Australian’s say). I had to stop the video and count my categories and sub-categories. Looks like I’m ‘an Ernie’ 😃 (ok I already knew that). I’ve got 27 Categories, 214 active sub-categories. The Sub categories include 4 Fun Money POTS 🤡 + 9 Rainy Day FUNDS ☂ + 12 Bit Ticket BUCKETS 🗑. My rainy day funds are inclusive of 4 emergency funds. As a 10+ year budget nerd and YNABer with 5 months experience (and someone who FIRE’d in 2020) trust me, it’s fit for purpose! I can’t recommend YNAB more highly enough, to anyone - be they, ‘a Ben’ or ‘an Ernie’ 😳.

[@Orionrobots]

I've 10 major categories, with 62 subcategories. However, do wish list categories count? I could knock 15 off there.

[@joanhall3718]

What do you do with temporary categories when you are finished with them?

[@katherinemuirhead1166]

Create a new category group at the bottom of the list mine is (NO LONGER USED ) and move your finished category down to the new group, that way you don’t have to delete them.

[@leticiacancel8327]

I hide my temporary categories or categories that are just "dormant".

[@YNABofficial]

There are a few options in the software, Joan. You can hide, merge, or delete categories. Here's a breakdown on those options. docs.youneedabudget.com/article/157-customizing-categories#hide I usually try to save in specific categories and spend in general ones. So, for example, I might have a category called "New Phones" where I save up for that purchase. But when I'm ready to buy them, I'll move the money to my "Technology" category and spend the money there. Then, I'll just delete the "New Phones" category since it has no spending associated with it. That keeps things nice and tidy and is great for reporting. ~BenB

[@Orionrobots]

@@YNABofficial Oh - I didn't spot merge - that could be useful when I'm done with wishlisting something. Would it make sense to merge a nice new upgrade into home maintenance if that's what it matched? Or would that unnecessarily inflate home maintenance? Perhaps only if I committed to diverting a percentage of my home maintenance average spend back out to something else wish-listed would that work... I do want to try and keep my stats useful.

[@conureron3792]

Over 80 categories for me :-)

[@reginasloan2201]

yes love that we dont need 1000 bank accounts

[@conureron3792]

Credit cards in YNAB = paying with cash!

[@JohnSmith-qh6zh]

Guy on the right is annoying. Guy on left is a people pleaser.