How to enter 401k /IRA contributions

Do you enter contributions as an expense so it shows up on a report? Or do you just update that tracking account and enter your net paycheck?

i.e.

you get paid $1500, and $300 goes to 401k.

do you input $1500 as income and then $-300 to 401k or do you just enter $1200 and increase 401k account by $300

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  • I personally don’t find it useful to use YNAB for net worth. So my budget is based on my net income. 

    Others handle this differently; if you want to see 401(k) as an expense, you’ll need to work from some version of gross pay. You also can do as you say and just increase 401(k) by the amount of the deposit. 

    Like 1
  • I do splits in my paycheck transactions. I have offseting income line items for each payroll deduction that is transfered to an off-budget account using another split line. Example:

     

    • Net pay (top line)Split $800
    • Split1 Inflow TBB $800
    • Split2 Inflow TBB $200
    • Split3 Transfer to 401k account  w/ category Outflow $200

    Then on the budget screen, you'll have an overspent 401k category, and you budget for it since you put in an income offset as part of the transaction.

    Or you can do as WordTenor suggests, which is simpler.

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    • nolesrule Thank you so much for this clear explanation. 

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  • I do track my net worth in YNAB but I don't worry about splitting my paychecks. I just update my tracking accounts periodically including my 401k. All of my 401k adjustments are memoed as "Contributions / Market Changes".

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  • I track net income in YNAB.

    Like 1
  • I'm actually glad I track my 401k contributions, my employer has steadily gotten slower at putting the contributions in my account. So the clearing/reconcilliation process helps me track which contributions have or haven't made it yet. The most recent contribution to the account 40 days after the payroll date. They are now running 3 paychecks behind, which is BAD.

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  • I've always been the type of person who likes something to do one thing, and do it well, whether it's software or a physical object.  I can totally appreciate why most people wouldn't want to run more than one financial app, but I find it absolutely essential.  To me, YNAB's sole purpose is to help me make the best possible decisions with the money I spend (or don't spend...yet).  

    I use a completely separate program for tracking every other account I have or have ever had.  In YNAB a paycheck is only the net amount.  In my other program I have Salary as inflow and every single deduction as an outflow split or transfer.  At the end of the year I can see exactly how much I've had withheld in every tax category, contribution made to various retirement and investing plans, and other cafeteria benefits.  It makes tax planning and annual benefit decision making a snap.  I don't categorize 90% of the transactions the way I do in YNAB, just the important business/tax/investing stuff.  

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    • Annieland 

      what is the completely separate program you use?

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      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 9 mths ago
      • 1
      • Reported - view

      Green Filly I use Banktivity for Mac. It’s a Quicken type program. I’ve test driven other ones since Quicken for Mac pretty much became abandonware 10 years ago, but this one works best for me. 

      Like 1
  • I input net income into YNAB and have my 401k and 403b just setup as tracking accounts that I update the balance on once in a while so it's simple, especially since my banks are linked so the imported transaction will just be the net income anyway.

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  • I'm using YNAB to track net worth, so something like nolesrule  does. While I was working, I had a Payroll virtual account I used to always split our paychecks into gross income, net income, and transfers to various 401k and IRA accounts, and expenses like Life and Medical Insurance and Taxes. So I have a very good handle on both Net Worth and Expenses. Now that I retired (last month) I find I have a pretty good handle on what expenses remain and what expenses are no longer applicable. I'm still using the virtual Payroll account for my Social Security checks (first one!) as it really worked for me.

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  • casner said:
    I had a Payroll virtual account I used to always split our paychecks 

    I would just split the real transaction (in checking) and skip the fake account.

    Like 2
      • casner
      • Now retired, and figuring out transitions
      • casner
      • 6 mths ago
      • Reported - view

      dakinemaui I started that when there was a limit on the number of items in a split in YNAB4, and creating the virtual account was a way to create multiple lines without messing up my real account. I set up the transactions in the virtual account to always come to $0 total, so no balances to worry about. Now that nYNAB can do more transactions in a split, I could put it in Checking, and I tried that for a few months. But the virtual account made it a lot simpler to keep track of what's coming in and where it is going.

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      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • Reported - view

      casner Ah, got it. I've always tracked net income since I principally use YNAB to guide spending decisions. That is a nice workaround if you exceed the allowable number of splits it want to encapsulate that info a little more.

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  • I work on the theory that my budget is for planning how I will spend the dollars I receive, so I use only the net amount that enters my. checking account. My 403(b) (a 401(k) equivalent for non-profits) is, therefore, in a tracking account. Since my contributions are always the same, I have created a recurring transaction in the 403(b) account for the contribution. Periodically I check the current value, record a gain or loss, and reconcile the account. I track only the total account value, not the individual positions. The broker that handles the account provides that information and I can check it easily online. If you do it this way, use 401K Gain/Loss and 401K Contribution for your payee names. If your employer also contributes, give their contributions their own payee name.

    Just to make life more complicated, I am also repaying a loan from my 403(b) that I used to pay off my mortgage. Since that is taken from my checking account by EFT, I have a budget category for the repayment. Again it is the same amount every month, so I have another recurring transaction to record the transfer to the 403(b) tracking account.

    My wife has an IRA instead of 401(k). Contributions are made from our checking account so I handle it like I do my loan repayment.

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