How to Remove Savings $ from To Be Budgeted

Hello,

I have researched the forums, support, youtube, etc and I can't figure out how to manage my savings transactions.  I understand assigning jobs for your savings money, but once I have done that, I don't know how to have that money deducted from my to be budgeted.  For example, let's say I started with $100 in my savings account when creating my budget.  In my budget it now shows that I have $100 available in that category.  I essentially want that money to be "unavailable" to me because I am trying to build an emergency fund and contribute to it each month.  I don't want to confuse myself into thinking I have money available when I am trying to keep it in savings.  Please help!!

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  • Budgeting money to a category deducts it from your To Be Budgeted.

    When you budget money to a category, it stays in that category until you spend it.  So saving money in YNAB is just budgeting it to a category and then not spending it.

     

    I have all sorts of savings categories in my budget, for things that we don't plan on spending anytime soon. 2 different car purchase categories, home maintenance/repair, car maintenance/repair, home improvement, vacations, next year's IRA money, lifecycle events, home improvement, and of course income replacement.

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  • Ok, but now I have moved this money over to a physical savings account, but it's being accounted for in a line item under my ynab categories. So something happens and now I need to bring that money back in. When pulling in my bank transactions, it's going to show $X coming into the account to be budgeted, but it won't have taken it out the category where that money has been accounted for in categories. Seem like it should be more like a credit card in terms of transfers, and should I need it I transfer it back into the checking account, but it doesn't seem to work that way. I just don't know how to account for that money that won't be completely messed up if I have to move it back in.

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 1 yr ago
      • 5
      • Reported - view

      Forest Green Zebra 

      It doesn't matter where the funds are physically located. The $100 can be sitting in your chequing accout, your savings account, in your wallet, or in your sock drawer.  What matters is that you have assigned $100 to your emergency fund savings.  If you use your budget to make future spending decisions, you will not 'accidentally' spend that $100.

      You can add $100 more next month and leave that $100 in your chequing account.  Your savings account will read $100, but your savings category will tell you that you have $200 saved.  Both will be correct.  YNAB teaches us to not look to our  account balances to figure out what our funds are for; look at your budget categories.

      Reply Like 5
  • You just move the money out of the savings category back into To Be Budgeted, or whatever category you need the money for. The actual transfer from the savings account is just done with a transfer in YNAB, which doesn't change the category that it's in, so you need to do that separately.

    Reply Like 1
  • Is your savings account part of your budget or a tracking account that is not part of your budget?

    When you keep your savings account as part of the budget, the act of budgeting money to a category is what saves the money. Moving it to a savings account (or back to a checking account) is just moving it to a different account within your budget. If you need to spend from one of your savings categories, you can spend from the checking account if there's enough money without having to manage anything in the budget. A transfer would only be needed if you needed to move the money into the checking account. Or to put it another way, when all of your accounts are part of your budget, all of your categories live in all of your accounts. The location doesn't matter, and so no categories are required on the transfers between accounts.

    Read: The Relationship Between Your Budget & Your Accounts: It’s Complicated

     

    If the savings account is off-budget, then the transfer is categorized and is treated like spending. You won't see the category balance accumulate. You'll also have to categorize when you bring the transfer back on. And then a third time when you spend the money. This will turn your Income and spending reports into a mess and it'll be harder to track your actual spending from those categories.

    Reply Like 6
  • This was tricky for me as well.  I could never get my savings account right. 

    After about 8 months of toying with it all I got frustrated but stumbled across these videos - https://www.youtube.com/watch?v=IMVYIgq_K8w&app=desktop

    https://youtu.be/CyuJrhgZQTY

    I followed both concept without fully understating out why it worked  After three months of using the suggestions in the video it all started to make sense.  

    To test it out make a  Budget Category - “Emergeny Savings”  if you have any money marked for emergeny savings set the current month budget to the value plus any additional contributions this month.  Next month you’ll see your money is green - makes it look like your budget is green and spendable. But here’s the discipline - it’s spendable - but only when an emergency arises. So watch it grow green and higher every month as you set each months contributions  do nothing else in YNAB except approve your transactions (which should be transfers) and remember from the video the budget doesn’t care about transfers. “The budget only tracks when it comes in and leaves the palace.”

    I was saving for new windows and plumbing work. For several months (14)  I contributed to my “Home Repairs” budget  and we watched it  growing green and greener.  Then one day the balance read zero. But never red!   

    I hope this helps  

    Reply Like 5
  • This thread has been useful, but I really wish YNAB would not be so dogmatic about saying it doesn't matter which account money is located in and actually support a way of showing transfers in the reports so I can see my spending as a % of total income, including money I choose to save.

    Accounts ARE important. I have two savings accounts, one at the same institution as my checking account (emergency fund) and another at a much smaller institution that offers a much higher interest rate (for a future all cash house-purchase). It's easy for me to assign the jobs as all of the money in each account has a single purpose, but I don't want to keep a 6=figure sum of money in an account with 0.01% interest rate, but a few thousand dollars emergency fund is fine. It also takes 3 days to transfer money fully from the external account back to my checking, so I really want my emergency fund to be instantly available if needed.

    What would be great looking at my monthly reporting would be seeing $x,000 in a month contributed to savings and be able to track that as a % of my total spending. As things stand, the amount is always zero as it is a debit from one account and a credit to another. Banktivity on the Mac does actually show this quite nicely, simply by exuding an account from the budget, so transfers to it become a 'spending' category. I am sure the feedback will be I am old fashioned and don't get it (probably true, I work in Finance) but as a person with no debt aside from a mortgage, I've done quite well with my system so far.

    Reply Like 1
      • Ceeses
      • Ceeses
      • 9 mths ago
      • 3
      • Reported - view

      Woolloomooloo Hi. In the Income vs Expense report, you have an Average column and a Total column. The last number of these columns will give you either the average amount you save per month or the total amount saved over the period of the report. Since it also shows you the average or total income and expenses, you can simply compare it all together.

      Or you can also use the Net Worth report: the amount your net worth increases per month is the amount you "save" (in an extended meaning as it includes reducing debt). You can compare that to your income or expenses.

      Note: I think it is pointless to look at that month per month. There will always be months were you spend more than your income for the month. For example we have a month when we have to pay for 2 car registrations and 2 car insurances and winter heating electric bill. Both car expenses are annual expenses and the whole together is higher than our monthly income. But since we save for those expenses over time, it doesn't matter as we have the money there.

      Is that what you want?

      Reply Like 3
      • Woolloomooloo
      • Risk
      • Lavender_Moose.2
      • 9 mths ago
      • 1
      • Reported - view

      Ceeses  Yes, the Income Vs Expense report does work well for looking at that net savings over time, I hadn't considered using it that way - it's a lot easier when the categories are collapsed visually.

      Net worth is pretty good, but obviously is considered other asset accounts like 401(k) etc or home value, which means monthly cash flow has a small relative impact. Thanks for the tip.

      Reply Like 1
  • Woolloomooloo said:
    Accounts ARE important. I have two savings accounts, one at the same institution as my checking account (emergency fund) and another at a much smaller institution that offers a much higher interest rate (for a future all cash house-purchase). It's easy for me to assign the jobs as all of the money in each account has a single purpose, but I don't want to keep a 6=figure sum of money in an account with 0.01% interest rate, but a few thousand dollars emergency fund is fine. It also takes 3 days to transfer money fully from the external account back to my checking, so I really want my emergency fund to be instantly available if needed.

     It's not dogma. It's the truth. The account does not matter for the purpose of holding your money. An account has no purpose other than to hold money. Your categories give purposes to your money regardless of location.

    Yes, the account matters for spending your money. So just keep an eye on account balances and have awareness of large upcoming spending, and understand transfer times (which YNAB has no awareness of. It's not difficult.

    I have 3 cash accounts, 1 checking account, 5 savings/money market accounts, 8 credit cards, 4 gift cards, 1 commuter card, 7 CDs and 1 TreasuryDirect account in my budget (currently). My checking account has 5.3% of my budget money. The account truly does not matter.

    Also, the best way to manage transfer times in an emergency is a credit card that's not incurring interest. The 3-7 week grace period is more than ample enough to cover a 3-day transfer time.

    Reply Like 4
    • nolesrule  I think what is important for YNAB to function, and the purposes of budgeting and managing cash flow, you're right that accounts are not important. In the real world of course, accounts are important for a host of reasons, and therein lies the rub. Of course there are ways to make it work in whatever tool you're using, and some of those have been outlined here.

      Regardless, many financial applications and tools do make the business of transferring money and tracking it in a flexible manner difficult. Let's take an example of a transfer of money to a 401(k) account or IRS account, or in fact any investment or savings account where are penalties for withdrawal. For the purpose of budgeting this must be considered spending because it is money that should not be available for anything else, except in the most dire of circumstances. OK so in YNAB just set up a category for 'retirement' or some other long term nebulous goal, no problem. But depending on the person's financial situation they may want to see that as part of their spending, or simply eliminate it from their budget altogether ("it never existed, forget it" approach).

      Why? Well if you're like me in your mid-40's with a positive cash flow every month, no debt and are behind on your retirements plans, I might want to know what my 'net' savings are monthly, but otherwise exclude it from my budget (thanks to Ceeses above for the tip). However If I'm 27 and drowning in debt which is getting worse with high interest, yet still maximizing my 401(k) and IRS, it might be good to know that I am worse off investing in my 5% annual growth on my savings, while paying 16% on my debt. So flexibility in these tools to include or exclude transfers based on the account they are transfers to or from, is a useful feature.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 9 mths ago
      • 2
      • Reported - view

      Woolloomooloo 

      Woolloomooloo said:
      But depending on the person's financial situation they may want to see that as part of their spending, or simply eliminate it from their budget altogether ("it never existed, forget it" approach).

       What they want and what they should do (or need) are two different things. A lot of people want to do something in YNAB, but often it's a bad idea.

       

      Woolloomooloo said:
      However If I'm 27 and drowning in debt which is getting worse with high interest, yet still maximizing my 401(k) and IRS, it might be good to know that I am worse off investing in my 5% annual growth on my savings, while paying 16% on my debt. So flexibility in these tools to include or exclude transfers based on the account they are transfers to or from, is a useful feature.

       This is not relevant to your budget. If you need to do a financial analysis of this sort, a spreadsheet is the place for running the numbers.

       

      ETA...   And actually, you don't even need to do an analysis to determine this is dumb. 401k to the match, then pay off the debt. Once that's done, max retirement accounts. It's only questionable with moderate debt interest rates, and even then actual analysis will only tell you about the past, not the future. After all, 2018 was looking pretty good the first half of the year and then tanked badly.. 2019 is looking good so far, but it may not hold. Past performance is no guarantee of future results.

      Reply Like 2
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 9 mths ago
      • Reported - view

      nolesrule But what do you mean I can't hang this picture with this rasp?!

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    • nolesrule Of course, the example I gave was illustrative, not particular good. I’d never advise anyone to do that. 

      Look this really  shouldn’t be an argument, I don’t think we’re disagreeing on anything meaningful. My poorly articulated point is really about being able to determine whether a balance in an account can be available or not for the purposes of budgeting, on an account by account basis. While it might not quite be aligned with the spirit of how YNAB is intended to get people to think about their cash and budgeting, it could help with some fringe cases.

      As I said before, I think the suggestion made above works really well for me and I’m happy with that.

      bevocat  It’s not quite that extreme, although I appreciate your sarcasm :)

      Reply Like
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 9 mths ago
      • Reported - view

      Woolloomooloo But you *can* do exactly what you want, actually. You can sync up your categories and account balances if you want to.

      Just for fun, I highlighted all my categories that I consider long-term savings/emergency funds, and the amount I have budgeted is reasonably like the account balances of my CDs and savings accounts. That is probably because in considering how much I wanted to lock up in these accounts, I looked at what I was probably going to need liquid and made sure not to tie up that amount of funds in these somewhat-less-liquid accounts. If I wanted them to match exactly, I could adjust the amount I have budgeted to one or more categories, but there is no benefit to doing so.

      If that works for you, nothing in the software is stopping you.

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  • I have read all the posts and I too am very frustrated by this process. I have been laid off, twice, in the last 10 years and while I put money aside for those type of unknowns, I DO NOT want that money to be considered "available" in the header of my budget. I really want to keep track of all my finances here, but I have gotten to the point I am not going to allow YNAB to track my savings and what I put aside as YNAB makes it looks like I have $15K "available". Very frustrating. Maybe I am just being too inept and don't know how to use the software for these types of things. I wish there was clear, usable, guidance on this and how I need to manage my savings.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 1
      • Reported - view

      Slate Gray Chef You obviously did not read all the posts, because your answer is in the very first response.

       

      nolesrule said:
      Budgeting money to a category deducts it from your To Be Budgeted.
      When you budget money to a category, it stays in that category until you spend it.  So saving money in YNAB is just budgeting it to a category and then not spending it.

       Figure out what the money is for, create categories for those purposes, and put the money in those categories.

      Reply Like 1
      • mamster
      • mamster
      • 7 mths ago
      • 1
      • Reported - view

      Slate Gray Chef Your savings goes into savings categories. "Available" simply means the money is in your budget and ready to do its job, whether that job is spending on necessities this month or being ready for expected or unexpected expenses in the future.

      There is no distinction in YNAB between "savings" and "non-savings." All of the money in your budget is categorized and given a job. That's how we protect ourselves from overspending in YNAB—not by separating money out into an off-budget account for general "savings," which is easy to raid, but by putting it into categories with a specific label. It's MUCH harder to raid a box that says "annual car insurance premium" than one that says "general savings."

      I understand why this is scary at first. But I've used tons of different tools and methods for controlling spending, and YNAB has been the most effective, even though it puts all of my money right in front of me in the budget.

      Reply Like 1
    • Hi StormyRowdyGhost !

      Savings accounts are purposefully included as a part of your budget, because we want you to give those dollars a job too! It's a different way of thinking about savings, but it's really powerful.

      Assign the dollars in your savings account to savings categories. You mentioned that you already have a job for those dollars in mind, so go ahead and make specific categories for those things in your budget. Then you'll assign the dollars there!

      This article on Budgeting Your Savings goes over that in a little more detail! Let us know if you have any questions. 😄

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  • Then I must be doing something grossly wrong, or YNAB is not designed for what I want (not a complaint), as my TIAA savings is showing up in the "header" of my budget for the month and I just don't want it to. I will just remove my "savings" from the YNAB categories as there doesn't seem to be a way to include something as an "off line" (off limits) account. Sorry, but some of the replies are a bit firm and I don't want to belabor my question. Have a great day, Derek

    Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • Reported - view

      StormyRowdyGhost Is this a retirement account, investing account or a savings account? Retirement accounts and investing accounts generally  should not be part of your budget.

      Savings accounts should be part of your budget. When you first add the account , you will need to budget the entire balance. Because it is newly added money to your budget. You will not be budgeting it every month.

      Reply Like
    • nolesrule nolesrule I'll have treat it as such. I've watched the YNAB YouTube video on treating savings like a dresser of drawers, but that is not what I am trying to do with these funds. I'll treat my "in case I get laid off again" funds as a retirement or investment account. Thank you for you reply.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 1
      • Reported - view

      StormyRowdyGhost Just create an "in case I get laid off again" category and put the money there and move on with the rest of your budgeting. I've had my income replacement category as part of my budget for 5 years, and add to it monthly.

      If you then take a look at next month, you'll see the money is still there sitting in the category.

      Reply Like 1
    • nolesrule I understand what you are saying, but the only way I seem to be able to keep it from appearing in the header for YNAB is to constantly perform a "withdraw" so it is not considered as part of my budget. I had to do that for all the "Ways to Save" transactions that Wells Fargo automatically was doing and I ended up changing banks as reconciling those types of was a nightmare (and a YNAB rep. recommended I find a different type of checking account).  

      I don't like seeing "red" and even when I set up my "Budgeted" for future months, YNAB throws me the color red as I haven't gotten paid yet, so that makes me just not do future months. I am trying to learn/like YNAB, but I may just go back to Quicken later this year. The budgeting part of Quicken is a bit tedious, but it does what I need. I create and work with budgets for my department at work (several millions of dollar), and I know how much money I will have for the year as that is what elected officials approved.  With my personal finances, I know how much my employer will pay me for the year. I allocate expenses for each category and subtract during the year, not to exceed those amounts. If you plan your expenses, you know your costs. I've never been "in the red" as a manager. With YNAB, it is like city council will only approve my department budget every two weeks (using my personal payday as a revenue day example). Its is just a weird approach, for me.

      Reply Like
    • StormyRowdyGhost You could also set up an automatic transfer to your savings and categorize it as such. My employer can split my paycheck to whatever accounts I want. I categorize the amount going to my savings account as Emergency Buffer, and I never see that money in my TBB.

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    • StormyRowdyGhost Also, I think the greatest strength of YNAB is it's flexibility throughout the real month of spending and as a communication platform for multiple budgeters. Both my husband and I used Excel before we got married, but when we got married, we found our thinking processes to be vastly different. We got both Quicken and YNAB to see which would work better for us.

      Granted, we have not found maximum efficiency in our workflow, but currently our process is to have automatic transactions for bills/paychecks, set monthly funding goals for various savings (medical, debt down, car down, etc) and variable spending (groceries, gas). Then we make the month's budget on paper (like Excel, but we're physical learners, so this has resulted in less stress), then as each paycheck comes in, we fund the categories it needs to support. We always know how much we can spend at a given time.

      We are NOT a month ahead, but when we get there, we'll use the "money for next month category" workaround. Ideally, we'd be able to fully fund the budget in about 3 clicks, and then we'd just dump paychecks into the next month category, instead of trying to find 3 budget dates a month (totally unrealistic, long term).

      Quicken makes the above pretty easy, I think. The YNAB edge comes from the ability to clearly communicate in the middle of the month about possible changes in priority (overspending). With Quicken, we couldn't manage cash flow as easily, much less communicate about possible changes. Maybe we just didn't understand its full capabilities.

      But if your hang up on YNAB is not seeing monthly savings goal money in the TBB, there's an easy solution there.

      Reply Like
      • jenmas
      • jenmas
      • 7 mths ago
      • 5
      • Reported - view

      StormyRowdyGhost This is an allocation budget and not a forecast budget. And an allocation budget is very different than most people are used to and therefore not for everyone. But if traditional forecast budgeting hasn't gotten you ahead financially, why not give the YNAB method a whole-hearted try - couldn't hurt right? Rule 1 of YNAB is give every dollar a job. Corollary is don't give jobs to dollars you don't have. So don't budget in the future if you don't have money in your accounts to cover those costs. Eventually you build up to future budgeting - the two paychecks that I receive in March will completely cover my April budget. Budgeting farther into the future isn't useful for me because then I have too many places to make adjustments if my cable bill changes or there is an escrow shortfall or whatever.

      I have been laid off twice in 2 years as well. That's why I have an income replacement category. It has enough to cover 6-8 months if I get laid off again. It doesn't live in any particular account though. In order to account for inflation, I allocate a bit to it every month from my leftovers (I budget the same amount to my categories each month and then have about $200 left over to be allocated to high priority categories). It stays on budget so that if the worst happens again (not inherently unlikely - I work in government contracting so if we don't win a follow on or if there is a prolonged shut down again because contractors don't get back pay), I can reduce the amount in the category to allocate to my living expenses.

      My 401(k), IRAs, and taxable investment accounts are set up as tracking accounts so they never appear in my monthly header. I update their balances anywhere from once per month to once per quarter. Taxable investment and Roth IRA accounts could in theory be accessed in an emergency (and if things got really dire, TIRA and 401(k)). In those situations, it would be treated as income to my budget and appear in the header to be allocated as needed.

      Reply Like 5
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 1
      • Reported - view

      StormyRowdyGhost The money will not constantly appear in the header. It will only appear in the header when the money comes into your budget. Once it is budgeted to a category then it comes out of the header.

      The rest of it seems like you may not be managing account transfers correctly.

      If every dollar is given a job correctly, you shouldn't be seeing any red in your budget. Red is a sign of overbudgeting (putting too much in your categories) or overspending (spending more money than is contained within a category).

      I suggest you might want to sign up to take one of the live classes to learn how to use YNAB properly. It's actually a very simple, easy to use system, and should not be resulting in confusion or red in future months if you are using it correctly.

      Reply Like 1
      • jenmas
      • jenmas
      • 7 mths ago
      • Reported - view

      jenmas and by twice in 2 years, I mean twice in 10 years. 2007 (January and I was notified in Dec 2006) and 2015.

      Reply Like
  • I think the easiest thing is to have your $100 get put in your savings account automatically by your employer. Then you set up an automatic transaction to represent that, and categorize it towards your emergency savings category, instead of TBB. You'll never see it in the budget, but the activity for that category will show its growth. Is that what you're trying to do?

    Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 1
      • Reported - view

      Move Light Sound Life This will screw up reporting of Income and Expenses.

      The easiest thing to do is have all your money deposited into a single account, budget it all to the categories you want, and in a separate decision move some of it to whatever on-budget accounts you want, because purpose and location are not linked.

      Reply Like 1
    • nolesrule Thanks for letting me know. Reports are something I haven't figured out in YNAB. They don't seem to tell me what I want to know. I've tried looking up help docs/etc, but I can't find anything that tells me what they should be like. 

      But, I just looked... On my income vs expense report, my entire paycheck is even in the same line. The account doesn't seem to matter...

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • Reported - view

      Move Light Sound Life Inflowing directly to a category rather than to the TBB category treats it as a "negative" expense rather than as income. This is more representative of receiving a refund for a return, in which you want to show a reduction in the spending total.

      Reply Like
  • I'm struggling with this, too. I've tried the YNAB way (assign amount in my savings account to the savings categories), but it never seems to add up correctly. I'd like to move my savings account from TBB to a tracking account. Is this even possible, or do I need to create a whole new budget?

    Reply Like
      • adriana01
      • adriana01
      • 7 mths ago
      • Reported - view

      Hot Pink Yeti you can, but it would involve a transfer transaction in YNAB to move money from your "on-budget" savings account to your new tracking savings account which requires a category on the on-budget side, which would be easiest if you had all the savings money in one pot, which seems to be exactly what you are trying not to have to do.

      So, if your account balances are right, you can move your category available balances around until you are happy with them. If that means matching a set of categories with an account, go for it. 

      Reply Like
    • adriana01 Thanks! Hadn't thought about the transfer transaction. So if I have $1k in my savings account, split across 3 categories ($200 for emergency, $300 for vacation, and $500 for new car), I could create a savings account under tracking, move the $1k from the on budget account to the tracking  account (splitting the transaction to reflect the 3 category amounts, to zero them out) . . . Right? Then just hide those categories in the budget? 

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 mths ago
      • 2
      • Reported - view

      Hot Pink Yeti 

      Hot Pink Yeti said:
      but it never seems to add up correctly.

       There's no reason it has to add up. All you need in checking is money to cover any near-future outflows so you don't overdraft. The rest can be in any account you want.

      Reply Like 2
      • adriana01
      • adriana01
      • 7 mths ago
      • 2
      • Reported - view

      Hot Pink Yeti you will still need a category for any money you send to savings. And with 3 different categories in it, how will you track how much is for vacation vs emergency fund? Categories in YNAB were designed to tell you this; anything else (like whatever savings goal set up your bank has, or Excel spreadsheets) is busywork & will become even more tedious than having it in YNAB seems right now.

      Reply Like 2
  • Hot Pink Yeti said:
    I've tried the YNAB way (assign amount in my savings account to the savings categories), but it never seems to add up correctly.

    How long have you been trying to ignore the fact that categories don't add up to account balances?  If it's only been a couple of months, I'd encourage you to keep working through the discomfort of seeing your finances through the different lens.  Because I can tell you that it bothered me quite a bit in the first year of using YNAB - not constantly bothering like a tooth ache, just a recurring nagging worry like a mosquito hum in the dark, something that I'd have to slap away in order to keep moving forward.  It finally all just clicked solidly into place by the end of the first year.

    I had been budgeting by account for literally years, so I think it took me that long to "unlearn" budgeting by account, and......I think, to be entirely honest, it also took me a while to be completely confident in the YNAB category method.  Now, you couldn't pay me to go back to matching categories to accounts.

    Reply Like 3
    • HappyDance Thanks, this is what I needed to hear. I've been an avid Excel budgeter for years, and YNAB has taken some getting used to (started 4 months ago) . . . But I'm really liking it and have enjoyed the paradigm shift - - even though it came with some discomfort. I can see how it might take more time to adjust to the savings categories. Will keep trying! 

      Meanwhile, I've done something that would make most YNABers wince. I had an unused checking account from when I had a side hustle for photography, and never added it to YNAB. I just moved my emergency funds to that account, and added it as a tracking account. I kept my savings account on budget and will try using categories to assign those dollars jobs (vacation, etc) from TBB. I kept a category for "emergency fund" and will assign those dollars/move the money to my tracking account (from my main checking account). For now, I need to see my emergency fund as a separate, untouchable thing. The rest I'll keep grappling with.

      Just so everybody doesn't throw their computer across the room when they see that I moved emergency fund to a checking account, I'm not in a tax bracket where that matters. Last year I earned exactly $3.75 in interest with my savings account. ;-) When YNAB makes me rich as royalty I'll rethink this strategy, and move money accordingly. :)

      Reply Like 1
      • jenmas
      • jenmas
      • 7 mths ago
      • 1
      • Reported - view

      Hot Pink Yeti an emergency fund should be in something as liquid as a checking or savings account. Maybe a CD if the penalty is only an few month’s rent. If you invest your emergency fund you risk that you will need to access it when the market is down and suddenly your emergency fund is 30% lower than you need. 

      Reply Like 1
    • jenmas No plans to invest, at this point. Eventually I'll put the EF into a savings account instead of checking. Maybe.... one day.... I can make $5+ per year in interest! ;-)

      Reply Like
      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 7 mths ago
      • 2
      • Reported - view

      Hot Pink Yeti 

      Like HappyDance said, you don't need to worry about the actual living place of the money if you don't need to spend it right now.  I have 90 categories, but most of the money lives in a money market account, not the checking account.  If I had to pay for a new washing machine, the kids' camps, new glasses for 2 kids, the orthodontics one kid needs, and a $1000 house repair on top of this month's monthly bills, I'd have to move money from savings to checking to cover them because I don't have enough in my checking account for them all.  I don't see any reason the keep all my money in checking like some people do, we pull in $20 a month from money market and I can transfer money account to account easily enough if need be.

      My emergency fund is off budget as a tracking account.  The actual funds are being moved into a one year CD ladder; I only have 1 CD currently and the rest of the money is an Ally savings account that pays over 2% APY.  Over the next 9 months I will open the other three CDs.  If I had to, I could skim from the various sinking funds account to cover expenses for up to 3 months before I had access to the first CD in the event of a job loss.  

      Reply Like 2
      • Technicolor Cheetah
      • Not sure when I became a cheetah...but I'll run with it
      • technicolor_cheetah
      • 7 mths ago
      • 2
      • Reported - view

      I meant to say that my on budget money market account makes at least $20 in interest every month and that's reason enough to keep it there vs. checking.  We'd make more if we moved all of our savings to Ally but I like having a local bank.  

      Reply Like 2
  • I think the bush we are beating around here is that YNAB has all of the data it needs to track savings budget items by actual account and that there are real YNAB relevant reasons for having multiple accounts. Yes, budget simplicity is budget stability, so you could have 1 account to rule them all. This is a financial fallacy though once you have your budget under control. If you are truly saving money not saving it in high interest savings is wasting your resources. I might as well make a cash savings category called "Under my Bed" and a non-linked account to track it. I can go grab the money anytime and spend it, sure, but it is not doing it's job of building my wealth even though it is accurately budgeted.

    Likewise if I have my savings category spread across 2+ accounts, say a checking and a savings which may even be same institution and instant transfer capable, YNAB requires unnecessary diligence to make sure I don't make that emergency expense from an account that only partially contains the budget.

    99% of the time a budget item should not be account specific... but transactions ARE account specific and so the ability to have account specific budgets while ALSO tracking total budget across all accounts is about the only feature I think YNAB lacks at this time. I also think, despite my 1% need estimation, that it is a CRITICAL feature for maximizing your true available budget. Heck, just being able to designate portions or entirety of a category budget value to a specific account can help raise the red flag immediately if you say, should have used your rewards card to make that gas purchase but used your debit card instead. You just threw 3-5% down the tank and preventing that is not outside of the goals of YNAB. Every dollar has a job including making you more money! Any dollar in a savings category not making you money has no job until the day you need it, other than to add to your Age of Money and security.

    Reply Like 1
      • adriana01
      • adriana01
      • 6 mths ago
      • 5
      • Reported - view

      Orchid Leopard my savings doesn't consist just of "savings" categories. Any money I don't need in my checking account goes into high interest savings. That amount has varied over time based on the types of accounts I've had (rewards checking, interest rates, etc) & my spending patterns, but not on what categories I am saving in. A running balance would help with optimizing cash flow, but so far I've managed with the one provided by the Toolkit.

      When it comes time to spend my savings, I don't spend it out of my savings account either. I prefer to use a credit card (for the rewards, of course), transferring money if needed for the CC payment (or check), or in rare instances I get a cashier's check. Often I have enough in checking just by not transferring anything to savings from the most recent paycheck to pay anything I have been saving for, and if I didn't, I have plenty of time to transfer the funds, & often results in getting more interest because I can leave more in savings for longer.

      How would YNAB stop you from using the "wrong" card at the gas station? Even if you had geo location turned on & had a way of specifying what card you wanted to use for each transaction, the best that it could do is push a notification every time you are at a gas station. That still doesn't stop you from just grabbing the wrong card from your wallet when you pay, and likely wouldn't work at a place you had never been before, or a place where you could buy gas on one card or fast food on another. 

      Reply Like 5
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 6 mths ago
      • 5
      • Reported - view

      Orchid Leopard I've been budgeting with YNAB for 9 years and I'm in the position you describe and I agree with you that better cash flow management would be a nice feature for YNAB to incorporate but I will never care to equate budgeted funds with a particular account. My on-budget accounts are currently comprised of 12 accounts including 3 checking accounts, 3 savings accounts, and 6 CC accounts. Every one of those accounts has a purpose but only one checking account is my main spending account. The purpose of the 3 savings accounts are to accrue more interest like you said.

      The only thing I need to know is that I have enough in my main checking account to make all of my various payments. It is up to me to make sure I have enough in this account to cover them. If I need to move some funds in from my various savings accounts, I will decide how much and from which accounts. This is where YNAB could provide some better feedback. I currently use the toolkit's running balance along with scheduled transactions to make sure I have enough in my checking. I even do some workarounds with scheduled transactions to see my next two upcoming fortnightly paychecks. IOW, I have to use a third party toolkit to better track this. YNAB needs to incorporate better cash flow but not by account.

      Reply Like 5
      • Überdraft_Fee
      • Engineer and Permaculturalist
      • Orchid_Leopard.2
      • 6 mths ago
      • Reported - view

      adriana01 I agree that YNAB has no place in preventing you from using the wrong source at time of purchase, however I think that it can point it out when the transaction is input/imported. I'm in a situation of debt repayment, where I have 2-3 years of aggressive CC paydown in combination with building rainy day funds. I've had 3 instances in the last 6 years of working for startup companies where a seemingly stable position was just gone overnight and I'm not even going to be able to collect past dues because the company was secretly running out of all funds and selling off all assets to pay off debts. I need to both build a liquid asset savings (in high interest savings) and avoid using the CCs because the interest rate, excepting on a low interest card (which rarely offer rewards), exceeds the reward rate. Rewards cards only work in my favor if I am paying them off in full each month. I have rewards cards, but unfortunately my income losses were all pre-YNAB and I was unprepared and lived on CCs for months at a time until stable equivalent income was established.

      Superbone I have to look into these toolkits, I'm pretty new to YNAB but I've attacked the philosophy with gusto. Within 24 hours of starting it stopped me from prematurely making a payment to pay down a CC. 

      What I am doing right now is a manual replication of the account transaction process in YNAB. I have a savings category for each account that I keep savings in. In this case it is a checking and high interest savings account for an online institution. I have a debit card and checks I can use for the checking account, so the money is accessible via direct purchase, check, ATM, or by 3-5 ACH transfer. It's not my primary account right now because I haven't moved my direct deposit and autopays to this institution yet. I keep track of each account's balance as a category. When I use or transfer funds, I manually mimic the transfer via the budget categories. For example, if I spend on groceries from the online checking, I transfer that amount from it's savings category to 'to be budgeted', or directly to Groceries if I'm now overbudgeted.

      Superbone as a fellow engineer, I'm sure you can see my perspective that any repetitive and predictable tasks such as this should just be automated. Maybe there is a toolkit that does this already or I can write a toolkit to manage this automagically.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 6 mths ago
      • 2
      • Reported - view

      Orchid Leopard Definitely check out the toolkit. It provides some nice add-ons. Most notably for me is a running balance which like I said, helps me to better manage my cash flow. I definitely agree with you that repetitive and predictable tasks should be automated but what I don't agree with is your method of keeping category balances in sync with accounts. There is no need for that in YNAB and you are adding extra complications unnecessarily. But don't fret, this is normal behavior to those that are new to YNAB. 

      Did you read the article that nolesrule posted above?

      https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

      It doesn't matter that some of your savings are in account A, some in account B, and some in account C. It is one pool of money to draw from.  Like I said above, you just need to make sure when you spend that the spending account has enough to cover that spending. That's where the toolkit with its running balances and future scheduled transactions comes in handy.

      Reply Like 2
  • Thank you for letting me know about the Toolkit extension! The running balance certainly captures the information I need in regards to scheduled/expected transactions. I still believe that it requires unnecessary brain work if you (despite the article's insistence that having more than 1 account doesn't make sense) maximize your money buy purchasing/holding money in multiple accounts. I can definitely say with confidence that, for example, groceries will always come from Checking A and gas will be on Card B, etc. Even so as I type my thoughts I find myself deleting them and thinking that this is a fairly obscure requirement and likely involves me trying to optimize my money too much.

    Reply Like 1
  • I am sure people feel this topic has been done to death, but I think there are two standout reasons the "it doesn't matter where your money is" approach doesn't work for everyone.

    One of the first things I always check in my regular financial software (which has been typically either Quicken or Banktivity), and have done for the last two decades, is post all of my upcoming bills for the month, at least between pay periods, so I know that I have enough money in my checking account to fund them without going overdrawn. Overdrawn = penalty or interest or both. For a long time, this was my number one concern. This is just a case of looking at what the balance is when everything is paid, it's not even a question of budgeting. 

    With YNAB, you at least don't have to worry about funding CC payments, because the software does that, and I love that feature. Spent money on a CC is spent money period. Awesome. But if you have you "to be budgeted" money in several places, you may not see you're about to go into debit on a specific account, after a certain bill is paid from that account.

    OK so now the argument is, well why have more than one account anyway? If you're living paycheck to paycheck, or are just starting out with budgeting, then having one account makes a lot of sense and makes things easier. The challenge comes when you have your emergency fund, you have enough to cover those repeating "one off" expenses, and you start accumulating money that you don't need now or even in the medium term. OK, so open an IRA and take it off budget? Sure... that might be good advice if you know you won't need it for 30 years... but with interest rates creeping up, and market volatility becoming more likely, maybe you just want a safe heaven for your cash where you can earn some interest while you're at it.

    All of these financial apps have limits. Quicken's budgeting was always woeful (and still is) as is Bantivity's, but account management in both of those apps is pretty strong, as is reporting. It's actually quite difficult to do both well, because reporting on transfers and aggregate balances isn't necessarily easy because you can't predict how people use there accounts.

    What I think would be a good feature on YNAB, is to be able to budget and additionally track transfers as an option. So if I budget $1000 a month for "rainy day" and "rainy day" is in an interest bearing account, that I can track that in the same way I would an expense. If that feature were available, I would use it, and it would save me a little faffing about each month.

    Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 5
      • Reported - view

      Woolloomooloo You don't have to have one account. But you should have one central account that almost everything flows through. It makes everything so much simpler. That's what my checking account does. All money comes into the checking account. I can move it to savings accounts or my wallet via ATM. All payments ultimately come out of this account (except for when using cash), including mortgage payments and credit card payments.

      So all that matters is that you have enough in the one checking account since everything flows through there, based on income cycle and expenses. When you have too much, you move it to an account that will earn more.

      The Toolkit helps, but you can get into a rythm and determine essentially that you need $X amount in the account at the start of the month. Future income replenishes the account as you are spending it down. If the account grows over a certain balance, sweep the money out.

      The interest income on money sitting in the checking account for a couple of weeks between sweeps isn't going to make or break the bank. On average $1000 sitting in a 0% checking account for an extra half a month before moving it to a HYSA will cost you $0.90 interest.

       

      Transfering money to an IRA is a long-term transition, so the money should go off-budget. Therefor you have to budget for it like any expense.

      Reply Like 5
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