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8 Myths About Reconciliation in YNAB


As members of the YNAB Help Staff, we’ve observed some…let’s say mistruths…about our good buddy Reconciliation, who has a severe PR drawback. 

Right here’s the factor—we all know Reconciliation (each personally and professionally) and these allegations are undeserved. Does the phrase itself sound form of boring or math-y? Certain. We will agree with that. However in actuality, it’s only a large phrase for just a little process that may preserve you out of monetary bother down the street. 

We wish to clear up any misunderstandings about our buddy Reconciliation as a result of we’ve observed that those that reconcile usually have fewer issues with their funds.

And as help workforce members, we wish that for everybody. 

Setting the Document Straight About YNAB Reconciliation

What’s Reconciliation in YNAB?

Reconciliation includes evaluating your cleared steadiness in YNAB to the present/cleared steadiness with the financial institution. When you’ve efficiently reconciled, your cleared steadiness in YNAB will match the cleared steadiness of your financial institution accounts—to the penny. 

If you reconcile, the one uncleared transactions in YNAB needs to be these which are nonetheless pending along with your financial institution, both since you manually entered them or they haven’t cleared your account but. (It may possibly take a day or two.) 

The little inexperienced or grey “c” column will present you the standing of every transaction. If it’s a grey “c”, it’s uncleared. If it’s a inexperienced “c”, it’s cleared. If it’s a inexperienced lock, it was cleared final time you reconciled and it was included within the reconciliation. (You’ll be able to edit locked transactions if it’s essential to, simply make sure you re-reconcile after.)

We advocate that YNABers reconcile every Funds account weekly. The extra usually you reconcile your accounts, the simpler it’s as a result of there might be fewer transactions to assessment if there’s a discrepancy.

If weekly feels too frequent, contemplate an every-other-week reconciliation routine. Or possibly reconciling your accounts each payday. You’ll discover a rhythm that works for you!

Why Ought to I Reconcile My Accounts?

As YNABers, we test our funds to see if we have now cash obtainable to spend, not our checking account. We’ve got to have the ability to imagine our funds is telling us the reality and reconciliation is how we construct that belief. In case your YNAB account balances are improper, your funds can’t be trusted. 

In different phrases: in case your accounts aren’t reconciled, you could be budgeting Monopoly cash. Which is okay for those who’re saving up for that coveted Park Place property, however not all that helpful in relation to ensuring you find the money for to your precise mortgage cost. 

Possibly you assume your funds or your accounts are an exception this rule – let’s dig in by debunking some frequent myths about our ol’ buddy Reconciliation.

Debunking Eight Reconciling Myths

Prefer it does for going to the gymnasium, your mind will provide you with all kinds of excuses as to why it’s a unhealthy concept to reconcile. All of them are lies.

In the event you hear your self making any of those excuses, reconcile anyway! 

  1. Reconciling is Dangerous. Lies. In YNAB, reconciling is GOOD. Typically issues already gloriously match. Different occasions you would possibly must double test your pending transactions. When issues nonetheless don’t agree, making a steadiness adjustment can really feel like failure, however it’s not. You could be tempted to return, line by line, because you began budgeting in 2016 to search out the supply of your drawback. That is an pointless hurdle – decide your battles! A steadiness adjustment will symbolize these lacking or incorrect transactions for you and you may get proper again to budgeting at the moment.
  2. I don’t must reconcile if I take advantage of Direct Import/FBI/Guide Entry. One other lie. Everybody must reconcile usually. Enjoyable reality: direct import brings in transactions, not balances. YNAB is designed so you should utilize any mixture of direct import, file-based import, and guide entry so as to add transactions to your funds. The reconcile function is the way you make sure that every part matches up and that your account balances agree with the financial institution.
  3. I don’t wish to reconcile proper now as a result of the balances already agree. Then it’s fast and simple! Take 3 seconds to hit that reconcile button. It’s completely price it as a result of working by means of the reconciliation course of does some work behind the scenes to make YNAB work extra easily. It is going to cut back loading occasions within the register when customers cover reconciled transactions, forestall duplicate transactions from importing and cut back the necessity to make changes. Wins throughout.
  4. I don’t wish to reconcile proper now as a result of I’ve pending transactions. You’ll be able to nonetheless reconcile when you’ve got transactions pending as a result of pending transactions don’t have an effect on the cleared balances both place. Mark these pending transactions as uncleared, and ensure your cleared steadiness in YNAB agrees with the cleared steadiness on the financial institution. 💥
  5. I don’t wish to reconcile proper now as a result of I must reconcile to my month-to-month assertion. Gold star for reconciling ever, however this isn’t your Grandma’s checkbook. With YNAB, you’ll wish to make sure that your cleared steadiness matches the financial institution at this second. Statements are old-fashioned as quickly as they’re despatched. As a substitute, use the present cleared steadiness on the financial institution and ignore your assertion.
  6. I don’t must reconcile my bank card. All of your funds accounts needs to be reconciled usually. In the event you owe cash in your bank card, it ought to have a detrimental steadiness in YNAB. The automated bank card dealing with will solely work if the working steadiness on the bank card is zero or detrimental. An incorrect steadiness in your bank card could cause the quantity in your Credit score Card Fee class and your funds to be improper. It’s okay although–reconcile the account (make sure you put a minus sign up entrance of that Present Steadiness), let YNAB enter an adjustment transaction, regulate the cash in your Credit score Card Fee class and transfer on along with your life.
  7. I don’t must reconcile my closed accounts. So long as the balances on these closed accounts are zero, you’re proper on this one! However when you’ve got a closed account with a optimistic or detrimental steadiness, clear all of the transactions and reconcile it so the working steadiness is $0. 
  8. I don’t must reconcile my monitoring accounts and loans. You caught us—there may be an exception to each rule, and that is it. There isn’t a necessity to regulate these balances greater than quarterly; they don’t have an effect on your funds. 
The YNAB Reconciliation confirmation screen asking if your current account balance matches the amount listed in your budget.
Reconcile Steadiness? Sure, usually.
YNAB Reconciliation screen showing success account reconciliation with confetti!
And there’s confetti!

The excellent news is that reconciling is approach simpler than going to the gymnasium. If you reconcile frequently utilizing your cleared steadiness, the reconciliation course of is fast and simple. And then you definately get to do the reconciliation dance.

(Aspect observe: There’s no established reconciliation dance but, so you may make up your personal. Now that we’re desirous about it although, our TikTok crew ought to get on that.) 

In the event you reconcile usually and all the time need to enter an adjustment – that’s a warning signal

When you could must do a steadiness adjustment the primary time you reconcile or if it’s been awhile, for those who discover that your steadiness is off each time you reconcile, there could also be a flaw in your course of. Assessment the Reconciliation assist docs (internet and cell) and in case your relationship with reconciling continues to be rocky, attain out to us. We wish to assist make reconciling a simple a part of your budgeting routine.

Because of Kat Hickey for collaborating on this submit!

On the lookout for extra suggestions and tips to realize budgeting greatness? Take a look at the Weekly Roundup. 

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