Running Balance

YNAB’s “Running Balance” works differently than what you may expect or might have encountered in other software.  When a transaction is entered, YNAB looks at that number and calculates the running balance in relation to the transaction directly preceding it when sorted by date. This calculation sticks regardless of what other order you might sort the columns by.

Example:  You create a new account with a balance of $500 and then write a check for $100. The running balance would look at the initial $500, subtract the outflow of $100 and place a new running balance of $400 next to that transaction.

That’s probably how you would expect YNAB to handle it.   The difference in YNAB is when many transactions are involved.

So far everything looks fine and as you would expect.  Each running balance number is tied directly to the preceding transaction. It reflects how that specific inflow or outflow affected the current balance when it was entered.

However, if the running balance column simply recalculated each time you sort the register differently (by Payee or Category for example) then the running balance wouldn't be of any use. For example let's take the same numbers from above and sort them by Outflow to see how that might look in other software.

Date    Outflow    Inflow    Running Balance
1/2                        500.00    500.00
1/5         6.00                       494.00
1/5         10.00                     484.00
1/8         25.00                     459.00
1/3       100.00                     359.00

A quick look at the above shows that the math still works but it's not realistic. When you outflowed $100 the day after opening the account the balance didn't actually drop to $359. It was $400. If YNAB were to calculate it as shown then the numbers would be off and wouldn’t be in relation to anything else.

This is especially true when you consider what it would look like once you have a several dozen or even a hundred or more transactions in place. If you sort the register by amount then you would see the running balance climb into the stratosphere as any/all deposits would simply add together showing you a 'balance' in the thousands or even more. Conversely, a large list of outflows would show the balance go deep into the red with an unrealistic negative number even though the bank balance never actually went there.

By keeping the running balance tied to how each transaction affected the balance you can see how it did so regardless of the sorting criteria. The example below demonstrates what YNAB would show it if sorted by outflow.

The working balance is always shown at the bottom of the register so you can see at a glance what you really have.