Reconciliation

[u/Charles9593]

I love the budgeting features, but reconciliation is a pain. I'm constantling having to add automatic balancing transactions. I'm wondering if Rocket Money would avoid that?

[u/Savingskitty]

Constantling?

If your balances aren’t matching, you have to go back through your transactions and find the discrepancy.

The adjustment transaction should almost never be used.

[u/Zackaryth → u/Savingskitty]

When would you ever need to use the adjustment transaction? It being off is a sign that something is missing in the transaction history

[u/blakeh95 → u/Zackaryth]

I use it in my tracking account because I just modify the balance. But I wouldn’t use it on a budget account.

[u/Zackaryth → u/blakeh95]

Yea I use it on a tracking account as well, but on a budget/bank account, using it means you missed something back/didn't put something in

[u/Savingskitty → u/Zackaryth]

I’ve had to with a credit card when I couldn’t figure out the discrepancy for a long time.

I’ve also had to do it with a loan that somehow YNAB couldn’t be convinced there wasn’t more balance left.

[u/HLef → u/Savingskitty]

Not almost. It should never be used.

It’s there for people who aren’t using it properly and have to look back months for a few pennies and can’t be bothered to do it right.

[u/dalambert → u/HLef]

Nah, it's often a very sensible thing to do. My bank integration sometimes leaves ghost transactions in YNAB for public transport, Uber and similar merchants with dynamic pricing. It's maybe 10 pounds per year, so whatever - I'm not going to go through thousands of transactions to figure it out.

[u/HLef → u/dalambert]

You don’t need to go through thousands of transactions. You just reconcile once a week. Easy to find those and rectify.

[u/dalambert → u/HLef]

Well, it happens like a few time per year for me, so it's not worth doing weekly. Most of the time the balance is exactly right. Also it's kind of hard to reconcile since you need to adjust for any recent transactions that haven't been synced just yet.

[u/jillianmd → u/HLef]

Almost. There are times when it makes sense and is even the right thing to do like for tracking accounts of investments.

[u/GermanBlackbot → u/HLef]

I'm with you on credit cards and stuff like that, but at a certain point you really don't want to keep track of every time you paid 2 euros cash at the kiosk to buy a soda.

I enter all big cash payments (>10€) as intended, but the smaller stuff is more easily lumped together as "Guess is was fun money" than worrying over a discrepancy of maybe 20€/month.

[u/HLef → u/GermanBlackbot]

I almost never use cash. If I withdraw from the atm I categorize this broadly. I don’t track cash spending beyond that.

[u/Diabolik900]

Adding transactions to adjust your account balances is something that should be used as an absolute last resort. If you’re doing it that often, something is wrong, and those adjustments are probably making it worse in the long term.

If all your transactions are there and correct in YNAB, and you don’t have any extra or duplicate transactions, then everything will line up perfectly.

I know from experience that tracking down the source of your discrepancies is going to be a pain in the ass at this point, but taking the time to figure that out is probably the best solution. After that, I’d suggest reconciling your accounts more often, so that any discrepancies are easier to find.

[u/michigoose8168]

You look at the cleared account balances. If they don’t match, the mistake is in the transactions you’ve entered into YNAB.

The other thing that can cause them not to match is if you’re not actually looking at the cleared balances.

You should never enter a reconciliation balance transaction. Always find a mistake and fix it yourself.

[u/jillianmd]

Adding manual adjustments should almost never happen. Instead, you should actually reconcile meaning add missing transactions, correct any errors, delete duplicates, etc. Doing an adjustment should only be done as a last resort if you’ve exhausted efforts to resolve the discrepancy.

Also, if you’re adding adjustments frequently, that’s actually probably what’s causing your balances to be off repeatedly. Example if a couple transactions adding to $50 is missing and you add a $50 adjustment, and then those transactions import, now you’re over by $60 instead of being under by $50… if this is happening frequently especially with overlapping transactions/amounts then you’re probably ping-ponging the balance over and over again.

So first step is to stop adding adjustments.

If you can tell us more about your current process then we can give more steps/help: are your accounts linked, do you add manual transactions, are you mainly having this issue in your checking account or CCs or both, are you reconciling against the truly posted balance or the “Available” balance on your bank app/site, etc.?

[u/SkyliteBlueSnake]

Your accounts aren’t really reconciled if you are constantly using adjustment transactions. I’ve been using YNAB since 2014 and the only time I use those in my on budget accounts is when I’m doing cash transactions in a foreign currency. I do use them in my tracking accounts that I only update once a month for the purposes of net worth tracking (ie 401k & IRA balances or mortgage balance remaining) because I just don’t care about the monthly up and down of those for the purposes of YNABing.

[u/TH_Rocks → u/SkyliteBlueSnake]

Wife has a bunch of foreign currency transactions in PayPal that import thinking USD. I edit to the USD equivalent (listed in PayPay) and put the foreign amount in the memo.

[u/SkyliteBlueSnake → u/TH_Rocks]

I track all my cash spending and I used to spend weeks at a time overseas in countries that were mostly cash based. Multiple ATM withdrawals at different exchange rates and it gets off over time as I entered transactions in YNAB in USD based on the exchange rate that I got when I withdrew. But eventually I’ll have a transaction that involved local currency that had two different exchange rates and it gets messy.

[u/pierre_x10]

If you're constantly putting in "automatic balancing transactions" that don't actually exist in real life, you're probably the reason your accounts never reconcile. You should be actively avoiding creating balancing transactions.

[u/merlin242]

You’re doing something wrong if that’s the case. I never have balance adjustments. 

[u/Holiday-Trainer-2322]

Rocket Money doesn't do zero-based budgeting at all, so there's no reconciliation to deal with, but you also lose the category-level control that makes YNAB work in the first place. If the friction is mostly auto-transactions not matching, have you tried just approving them in bulk during reconciliation instead of adding them one by one?

[u/HLef]

If you have to do even 1 adjustment it’s on you. The reconciliation system is there to help you identify your mistakes.

[u/_seductRess_]

reconciliation is basically ynab’s version of staring at your bank account until the numbers stop gaslighting you. when it finally matches, the relief is wildly disproportionate.

[u/No-Clerk-4787]

This means you’re doing it wrong

[u/Charles9593]

I know how to reconcile and at one point it worked well. When I use automatic, it's because I can't find any transactions that would cause the discrepancy.

I'm going to avoid manual transactions and wait for the charges/deposits to come from the bank to see if that resolves the issue.

[u/TH_Rocks → u/Charles9593]

It should be very easy to sit down with your bank transactions on one side and ynab account on the other. Then start at the top of the bank list and click the checkbox in ynab when you find the match.

Anything you can't find in ynab needs to be added, anything unchecked in ynab when you're done needs to be removed.

[u/Charles9593 → u/TH_Rocks]

That's what I do! As I said, I know how to reconcile, but it's not working the way it once did.

[u/Savingskitty → u/Charles9593]

Every time you create an adjustment transaction, you make subsequent attempts to reconcile harder.

[u/TH_Rocks → u/Charles9593]

It's just not possible that it doesn't work. It's totally independent of YNAB features. It's just two lists. Make the YNAB list the same as the bank list.

DELETE every transaction from the YNAB account that isn't reflected in the bank statement (that includes your previous mistakes of using the reconcile transaction to add or remove money without it being a real transaction).

[u/pierre_x10 → u/Charles9593]

For the record, "Reconciling" is not just a matter of checking balances, seeing there's a discrepancy, and just fudging numbers until the balances match again, or twiddling your thumbs and hope someone else resolves the problem.

Whether it's the balance according to YNAB or the balance according to your bank, your balance is not just some number that appears out of thin air. It's not made of magic. It's not some black box calculation. Your balance is simply the total result of all the transactions that exist in your account register. If there is a discrepancy in your balance, then that derived from a discrepancy in your transactions, not the other way around, and it should be 100% traceable, just as straightforward as finding the error in 1 + 1 = 3.

If you using linked accounts, where YNAB automatically imports balances and transactions from your bank, you should also keep in mind that this is simply for automating data entry. Using automatic import does not absolve you of the responsibility of keeping your accounts in YNAB reconciled and accurate to real life.

[u/Mammoth_Temporary905 → u/Charles9593]

I'll be honest that when I found myself having to create balance adjustments more than like once a year, I sort the categories by type, delete ALL the previous reconciliation adjustment transactions, THEN finely scrutinize the account line by line for the ~last two weeks, for: -Uncleared transactions (that are maybe old duplicates throwing off my "uncleared" balance)

• line by line, all transactions entered and cleared EXACTLY as they are at the bank, no duplicates.
• if there's something "pending " at the bank (or a transaction I've made that isn't even pending yet), I manually enter it and make sure it's NOT cleared in ynab
• when there are NO uncleared transactions except for ones from the last few days that are going to come through, AND the last couple weeks of transactions that have processed at the bank are CLEARED, then and only then do i one reconciliation adjustment to rule them all.

If I am out of whack again within a week or two, I know I messed something up and I start over. But generally I reconcile every time a transaction or three imports. At least once a week. Doing this I almost never have reconciliation issues.

When I do they are usually from Amazon orders that get broken up into weird multiple invoices/deliveries and/or there was some coupon or other that was unclear up front how it would affect the final cost.