Foreign exchange risk

It's convenient to measure your budget in a single currency, but currency exchange rates are volatile. We suggest that you take the following measures to mitigate this risk (this is not financial advice):

  • Periodically adjust your Ynab account balance: Once a month or so, you should manually convert the balance of your bank statement and update it in Ynab (right-click on your account > Today's Balance). This will create an adjustment transaction which corresponds to the exchange rate fluctuation on that month.

  • Create a Ynab category for exchange rate fluctuation: Allocate money every month to potential exchange rate-related losses. You can use this category to cover the adjustment transactions mentioned above.

  • Choose the right Ynab currency: You should choose the Ynab currency that takes the most part of your balance. If you have a foreign currency taking a big chunk of your net worth, then you might have a harder time managing exchange rate fluctuation.