Doing a little redecorating or rearranging of your YNAB budget categories?
A common YNAB rookie (or not-so-rookie) error is getting too granular with budget categories. I once experimented with separating my chocolate purchases out from our general grocery spending. Huge mistake!
For one thing, it turned out to be information I did not want to know. And B, it was a huge PITA (pain in the tuchus). All those split transactions kept me from entering my transactions right there in the grocery store — never a good idea.
Anyway, whatever your reason for wanting to merge or combine existing categories, it’s actually a simple task. But if you don’t follow the right steps you can really muck up your budget. And untangling the mess can be a nearly impossible task (ask me how I know).
3-Step Process for combining YNAB categories
Step 0: Establish terms and define project
Make sure you’re clear about what your goal is before you start. If you have several categories to be eliminated, complete all three steps for a single category before proceeding to the next category. Trying to combine steps could result in a hairy, tangled mess. [The new web-based YNAB’s lack of “walled months” makes it impossible to pick apart what went wrong, where puzzles. Ignore my advice at your own peril.
Terminology:
- Host category – the category that will remain and be expanded
- Abandoned category – the category this is being eliminated
For demonstration purposes, I’m going to merge my Non-grocery Grocery Store category into my Groceries category.
Step 1: Find & Move Transactions
The first step is to find all of the transactions in the category to be abandoned. The easiest way to do this is to do a search in the All Accounts screen (see below).
In the search box on the All Accounts screen, begin typing in the name of the category to be abandoned. In my demo case I started typing “non” and YNAB’s search function suggested several options including everything categorized to Non-grocery Grocery Store (see below).
Click on the line: Category: [your abandoned category name] and YNAB will display all of the transactions assigned to that category.
Now you’ve got a full list of transactions assigned to the category you want to eliminate. Select all of the transactions by clicking on the checkbox in the header column (see top screenshot below).
Once all of the transactions are selected, use the Edit menu to move them, en masse, to the Host category — in this case, to Groceries (see bottom screenshot below).
Click on Edit => Categorize => then hover over your category group names until you see the Host or destination category name. Click on the Host category name to finish the process.
Step 2: Clean Up the Budget
Now that all of of the abandoned category’s Activity has been recategorized, it’s time to clean up the Budget screen.
This is an important step in the process. Don’t skip it.
This process needs to be repeated for every single month in your budget file.
Best practice is to start at the beginning of your budget history and then move forward in time, month by month. Navigate to the beginning of your budget by using the calendar arrows.
Once you’ve found the first month of budgeting activity, focus only on the category you’re abandoning.
If you allocated funds that month, there will a number in the Budgeted column and the same amount will show in your Available column. [If you didn’t fund the old category that month, the balance will be $0.]
Reassign the funds you allocated each month by clicking on the Available balance (green bubble). That will cause the Move wizard to pop up. The amount field will be automatically filled with the available balance; no need to edit that. In the To field, select the name of your Host category from the dropdown box and click OK.
The abandoned category should have $0 in all three columns before to proceed to the next month in your budget.
Skipping this step or missing an allocation is not advised. Any transactions or allocations you miss will end up as free-floating numbers once you delete the category and you could end up with a mess too complicated to untangle.
Step 3: Remove or Rename the Category
The final step is to either repurpose the now-empty category by renaming it.
Or you can delete the category and be done with it completely – as if it never existed.
If the purpose is to cut back on the number of categories and simplify, then deleting the category is the best choice. But if you’re reorganizing, save yourself a few steps by repurposing the category.
And that’s it!
Don’t be afraid to customize YNAB and make it your own. In that process, you might find that your categories aren’t set up quite right. Combining categories is a great way to clean up your data and make it work for you.
Talk back! I’d love to hear if this tutorial helped you clean up your budget. Did everything go smoothly? What categories did you experiment with only to discover they were useless or redundant or too granular?
Thank you so much for this article. It was very helpful to me, and saved me from a mess.
Thanks for your comment, Joanne. Happy to have helped!
My issue is that I have Master Categories for Truck (Pre 2015), Car (2015-2019), Van(2019-now); each with sub categories for gas, insurance, etc.
I thought it might be a good idea to merge those categories into “Transpo”. But apparently, unless I want to go back and individual update 8 years of budget entries (96 months, “not all that many”.), there is not a “simple way ” to do this.
Nerts. YNAB is a good budgeting program, but not necessarily a good “accounting” program. I’ll just live with it.
Well, the merging part of the process would be fairly straightforward. And you *could* skip step 2, if you wanted to and simply fix the allocation discrepancies in the current month. This would make your budget history look messy but in the end all the numbers would be the same.
I happen to disagree with your statement that “YNAB is a good budgeting program, but not necessarily a good ‘accounting’ program” but I understand your position.
Very helpful. Thanks for the walk-thru.
Easy to follow! Thank you! To comment on Anonymous’s post, I could see how cleaning up 8 years of the assigned budget dollars would be hassle. One possible solution that has helped me is to create a fresh budget every year. Same categories but any leftovers from the year before is either moved to a high-yield savings account for a short term goal or into my brokerage account for long-term savings. I do use the YNAB csv files for each budget year to play around with in Excel if I wanted to dig into something particular.
Thank you; this was super helpful and worked perfectly when I followed your steps! I ended by “hiding” my now-defunct category instead of fully deleting it; is there any drawback to doing this?
Hanusia, I’m glad you found the article helpful. Thanks for letting me know.
The only drawback to hiding a “now-defunct” category is just that it leaves behind the empty shell. If the category is truly empty, as it should be after a successful merging, over the long term I think you’re better served by either deleting it or repurposing it by renaming the category and using it.
I personally prefer to not have any Hidden categories because they’re completely useless in terms of reports. And hiding an empty category would merely end up confusing me because as obvious as my decisions are now, my aging brain fails me more often than not :-p
So tl;dr — from a YNAB-technical-functionality perspective: No, leaving the now-abandoned category hidden won’t hurt anything. But from a best-practice coaching perspective, if you’ve followed all the steps and the category truly is empty, I recommend deleting or repurposing it.
Very clear instructions, and an engaging writing style. (I hope your little chocolate debacle is just a past memory by now).
One thing I noted: I deleted the abandoned category that I was merging, instead of hiding it, as you suggested. Then I started looking at other defunct, hidden categories with an eye towards maybe deleting those, too. However, they still had historical data in them, since transactions hadn’t been moved, so I decided to leave them hidden, but still a part of the congressional record.
Thanks!
Hi Tres, thanks for your comment. I glad you found the tutorial helpful and compliments on my writing are always welcome 🙂
The chocolate debacle has turned into a funny story and a useful cautionary tale. The chocolate habit continues, however.
Yes, any category with historical data must be archived. Deleting will muck things up for sure.
Hiding works well enough though I’ve found that I don’t like having hidden categories. It works on the “front end” — they’re hidden in terms of the budget screen. But in the reports, I find “Hidden Categories” frustratingly uninformative. I wish we could archive categories and still have them show up in the reports under their original category group. For example, our kids are both grown and graduated and gone now so the categories I had for their educational expenses are no longer pertinent but merging them with an active category wouldn’t make any sense. Same thing for a couple of car loans and our mortgage — paid in full and therefore no longer active categories. But all of that data gives me a very different view in the reports when they remain in their proper category groups and meaningless when lumped together into a group called “Hidden.” My solution is to merge categories when the data overlaps or can meaningfully be merged. Otherwise, when I archive a category I change the name to include “obsolete” and drag it to the bottom of its category group.
I’ll willingly admit that I might be a little more picky that an average YNAB user but I like your term: congressional record. By renaming and demoting out-of-date categories to the bottom of each category group, my congressional record is preserved in its original form.
Isn’t better solution simply to click “delete”?
YNAB will ask you what categories move the existing transactions to…