WAM Dos and Don’ts

Rule Three: Roll with the Punches, encourages us to move money around among categories as necessary. Over in the wonderful YNAB Fans Facebook Group, participants refer to moving money from one category to another as WAMing (short for Whac-A-Mole).

Covering overspending (either proactively or reactively) is an essential part of YNAB. But there are ways to do it that are, in my opinion, more beneficial than others. So here’s my short Dos and Don’ts list.

Do

• Check your budget before spending and decide where the money’s going to come from if it isn’t already assigned to the pertinent category
• WAM from non-essential categories
• Think about whether this expense is or might be recurring and therefore should have a target created (or increased) to cover it in the future.
• Create a focused view for WAMable categories to make it easy to find appropriate categories from which to move. (Check out my Focused Views post for more information.)
• Use the Notes in the right sidebar of a given category to keep track of where you WAMed from, in case you want to replenish the money you took from that category.

Don’t

• Don’t WAM from money assigned to a credit card payment. The whole point of covering overspending is to keep you out of debt and this will increase your debt.
• Don’t let overspent categories stay yellow (for credit-card overspending) or red (for cash overspending) at the end of the month. If you do, it will either create credit-card debt or be taken out of next month’s Ready to Assign when the month rolls over.

Sometimes true emergencies happen and you can’t follow these common-sense guidelines. But under normal circumstances, being mindful about how you handle an expense that you haven’t assigned money for is as important as being mindful about other aspects of your budget.

Here’s a bit of good news for those of you who are new to YNAB. As time goes on, I think you’ll find that decisions around WAMing become easier.