Emergency Fund in Tracking?

I have a savings account that I use for my emergency savings and have it set up as a tracking account. When I make a deposit from my chequing account I do it as an outgoing expense to my "emergency fund" category.

Is this wrong? Should I have it as a budgeting account and just keep growing my available amount?

If I have an emergency expense I currently transfer money to my chequing, so it shows as "to be budgeted" then I move that money to the category that best suits the emergency (e.g. auto maintenance when I was in a fender bender). My reasoning is that this way I can also see where my "emergencies" are costing me and see if I need to budget more in some categories - likely for my car and pets.

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  • I'm 100% with you, but that's not how ynab thinks of savings. I'm learning to adjust, maybe we can start a support group. Ynab has a good articles on this too. 

    Reply Like 1
  • The way that you are doing this is perfectly acceptable.  I have done it that way in the past as well.  Our emergency fund is in an account at Ally Bank, and this worked well for us when we held only emergency funds in that account.  It only becomes an issue if you want to use the money in the tracking account for more than one purpose.  In our case, most of the money in our Ally Bank account is considered emergency fund, but some of it is earmarked for college tuition for our daughter.  So I moved the account back on budget to more easily allocate the balance between the 2 categories.

    Reply Like 3
      • Karine
      • Blue_Horn.1
      • 10 mths ago
      • Reported - view

      Ben K. I don’t think I understand when you say “that’s not how YNAB thinks of savings”. What is the usual YNAB approach?

      bobbucy yes it’s only emergency, “hopefully never to be used unless something unforseeable happens” money in that account. The true expenses/annual stuff is in another account

      Reply Like
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 10 mths ago
      • Reported - view

      Karine The community will answer without fail. In short, the categories control your money, not the account it's in. Unlink the account to the use of the money in your thinking. That's a big leap for me, who had like 5 separate savings accounts...

      Reply Like
    • Khaki Storm Yeah, I'm trying to understand this. I use GnuCash for my accounting purposes (which is great for accounting, but it's budgeting sucks, so I'm trying out YNAB to be used as well. I tried using Quicken and it was entirely horrible).

      Anyway, before YNAB, I started getting into the CC rewards a little more (e.g. Discover, Citi, Amazon Chase, each giving their own cash back advantages). Between that and my mortgage/loan, it was getting annoying trying to make sure my checking account was retaining enough value. So I switched it around. Every week, I move money automatically from my checking to my "Home Loan Savings", which I'll check once a month to make sure it'll have enough before the autopay hits. I then did this with my car loan. And now my credit cards - every week, I'll move money from my checking to these accounts. The rest goes into "long term" savings.

      There's a few kinks I'm working out, but overall, it's been pretty good. It's a little intensive, but the auto-pay means I won't forget. It'll pull from savings that nothing else ever pulls from (so no potential overdraft because 2 bills came in unexpectedly), and during that interest free period after the statement comes through, I'm earning interest - not much. And since I'm funding the accounts every week, it's keeping me honest on how much money I actually have. My next problem is that my "long-term savings" probably needs to be split slightly, because it acts as a spending buffer & emergency fund & long-term goal saving, which is annoying to have all in one account.

      Merging that "system" with YNAB has been....fun.

      Reply Like
  • With YNAB, you should be including your savings in your budget.  It would be worth while to read  

    the relationship between your budget your accounts its complicated and budgeting your savings.

    With YNAB your savings doesn't depend on what account it is in. You should be looking at your budget to know how much to spend on things not what is in your bank account.  

    Having it as a tracking account throws things off because when you move money out it looks like and expense and when you bring it back in to use it looks like income. Now, if you don't care about the report tool in YNAB, then using the tracking account works. However, this is not giving that money a job. There is nothing that say that job cannot be to sit there and wait for when you absolutely need it. 

    Rule #1 EVERY dollar has a job, that should include your savings. Even if it's job is to cover the unexpected.

     

    Side note to think about. I have seen many post of don't go more than a month out with budgeting. In my opinion, budgeting out 3-6 months in advance then becomes the emergency fund. That is the basis for an emergency fund. Having 3-6 months worth of expenses set aside. The difference with YNAB is you can do that by budgeting out the moths ahead so long as you have the money.

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

      Tardigrade 

      Tardigrade said:
      Side note to think about. I have seen many post of don't go more than a month out with budgeting. In my opinion, budgeting out 3-6 months in advance then becomes the emergency fund. That is the basis for an emergency fund. Having 3-6 months worth of expenses set aside. The difference with YNAB is you can do that by budgeting out the moths ahead so long as you have the money.

       The reason many seasoned users don't recommend more than a month out is that when your plans change, instead of only having to change one month, you have to change 3-6 months worth of budget entries. It doesn't even have to be an emergency to make changes.

      Reply Like 1
      • Tardigrade
      • Green_Chef_baec6327c25b
      • 10 mths ago
      • Reported - view

      nolesrule That is a fair point, but I would have to ask how often are you having those "emergencies" and what are you counting as one. If it is happening frequently, I would have to question if it really is an emergency or what else is going on that they happen so often. 

      I would much rather see how far out I can cover the basic of my budget and have to re-adjust when something major happens. This also lets me know how far out my budget has been affected by the emergency.

      The end result is the same, the money comes from somewhere. So not going more than a month out, is most people preference. I disagree with that method, but it is your budget. 🙂

      Reply Like
      • jenmas
      • jenmas
      • 10 mths ago
      • 3
      • Reported - view

      Tardigrade it's not that you have to make changes for emergencies, it's that you have to make changes for the little things: when your cable bill goes up $1.23 or do to an escrow analysis your mortgage goes down $7.81 or if you do balanced billing on your utilities. Making these little changes in 6 different months increases the chances for typos.

      Reply Like 3
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 10 mths ago
      • 5
      • Reported - view

      Tardigrade What jenmas said.  It's the micro-changes to fixed costs that become a major PITA. Monthly expenses. Monthly budgeting toward annual expenses. So you want to budget 6 months ahead....

      Netflix goes up a dollar/month. Change 6 months.

      Amazon Prime goes up $10/year. Change 6 months.

      Annual car registration increases. Change 6 months.

      Auto insurance increase. Change 6 months.

      And so on.

      These are all costs that are budgeted the same every month... until you get an increase (or decrease). And with each increase, you have to change your budget. And the farther out you budget, the more months you have to change.

      And don't forget this is zero sum. For every category you increase, you'll have one or more categories that will need to be reduced to offset the change... in each month.

      Reply Like 5
      • kevman479
      • kevman479
      • 10 mths ago
      • Reported - view

      Tardigrade  I budget into the future as well. My E-fund is my income replacement fund as well. I am 9 months out. I know what others have said about changing things in the next nine months but I have everything set up as goals or recurring payments. When something changes I just change the goal and or the recurring payment, lower the goal on another, then just click through the next few months. but then very few things change for us on a monthly basis.

      Reply Like
  • Karine said:
    My reasoning is that this way I can also see where my "emergencies" are costing me and see if I need to budget more in some categories - likely for my car and pets.

     Additional note: An emergency fund turns a crisis into an inconvenience.  You can also get that information by instead of directly using the emergency fund category, just move the money to the category it was needed in, and look at your average spending to see if you are budgeting enough.  If you are overspending in a category and covering form your emergency fund, what that really means is you are not being realistic in how much your need for that category.  

    Reply Like 3
      • PhysicsGal
      • Nerdy female homo sapien
      • physicsgal
      • 7 days ago
      • 1
      • Reported - view

      Tardigrade Yes, this was what I was going to say, just move the money to the category when you use it.  I had to use my Emergency fund awhile ago to buy a beater $1k car (I'm doing Dave Ramsey's baby steps and on BS2), but I just moved the money into my vehicle category and then spent it.  I do the same with my "Stuff I forgot to budget for" category.  For  example, I don't buy clothing or personal care products often since I tend to stock up, but then I realized I was out of a couple products, so I moved $ into that category from my "stuff I forgot to budget for" category, so that, when I look later on, I know how much I actually spent from that category, but I don't need to know ahead of time how much I will need at the beginning of the month on those smaller, less frequent categories.  After I'm done with BS3 I will probably just put a certain amount into those categories a month and keep a target balance so I can spend when needed, but I'm on a pretty tight budget right now so I don't want to keep any extra balances around that I won't need right away.

      Reply Like 1
  • Keeping savings off-budget is very high up on the list of bad ideas. Take it from someone who once insisted on keeping my very important not to touch major emergency fund off budget and, once was comfortable with the budget, spent six hours one night re-doing 14 months of transactions so that that account would be on-budget from the start. 

    You'll get all the same information just from using the reports for your car and pets categories. I evaluate my averages every 6-12 months to make sure I'm budgeting appropriately. Any moving of money that I am doing consistently winds up showing up in that self-audit, and I adjust my budgeting accordingly at that time. 

    Reply Like 6
  • So, a few thoughts:

    Budgeting 3-6 months out, why? If you know your monthly expenses are $x, then you can set an "income replacement" category as $x times 3, or 6. Then it sits there, and if you lose your job, you start budgeting from it.

    On budget savings: this is mostly two fold: 1) so you aren't showing savings as spending and 2) so you don't double count your savings. Often you might think "well, I have $5000" and that will cover any one individual emergency. But saying it's for car repair/replacement, and job loss, and medical deductible, etc., tends to make us really underestimate our need for savings. Someone on the old board had their teenage daughter drive the car into the garage, and wipe out three deductibles in one day - auto insurance, medical insurance, AND homeowners insurance. With one bucket of savings, this didn't stretch far.

    If you are using it for car repairs and other types of unexpected expenses, YNAB would say those aren't unexpected. Make categories, and save funds for them.

    If you want the categories to match an account, then make a master category for all the savings categories.

    Reply Like 1
  • Thanks everyone, it looks like I should move it back into my budget account! And suck up my feeling of having a (one day) big pile of money “sitting there”.  Would the same go for my TFSA savings, which I see as medium term but don’t actually know what I’m going to do with? I do have retirement savings that I want to keep in tracking because I will never touch that except to add to it, for about 30 more years!

    Reply Like
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 10 mths ago
      • 2
      • Reported - view

      Karine 

      I have a couple of TFSA accounts. I would not recommend keeping a TFSA account on-budget. You can't spend directly from the account.

      Categorizing the shifts in account value in your budget are a major pain. If the market corrects resulting in a drop of 30%, which category takes the hit? If the value increases, do you record it as income?  Best to leave it off-budget in a tracking account.

      Edited to add:  If you have a shorter-term savings horizon, plan to pull the funds out within a few years, and the funds are invested in guaranteed investments like a HISA (high-interest savings account), then that type of TFSA investment won't cause you trouble being an on-budget account.

      Reply Like 2
  • Karine said:
    TFSA savings

     Please explain what that is?

    Reply Like
      • mamster
      • mamster
      • 10 mths ago
      • Reported - view

      Ben K. TFSA is Tax-Free Savings Account. I believe that specific term is mainly used in Canada, but the UK has a similar type of account. The US does not.

      edit: It's basically a Roth IRA with no minimum age for distribution, IIRC.

      Reply Like
      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 10 mths ago
      • Reported - view

      mamster Nice! I can understand your question better know. It's kinda both a savings account and a retirement account.

      Reply Like
  • Karine said:
    Is this wrong?

    Seems a shame that it's only the emergency savings that is accumulating at the higher interest rate. Let's just say that you can do better.

    Reply Like
  • Purple Packet said:
    . My next problem is that my "long-term savings" probably needs to be split slightly, because it acts as a spending buffer & emergency fund & long-term goal saving, which is annoying to have all in one account.

     This is exactly the problem that YNAB solves for you (if you let it.)

    Most people have a lots of competing financial goals -- large purchases (e.g. new car/house, vacations, etc.), savings for retirement and/or college, safety-nets for loss-of-job or unforeseen emergencies. Managing separate bank accounts for each of those goals is impractical. It doesn't scale.

    YNAB invites you to keep all your money in one (or very few) accounts and instead organize it into categories, which you can think of as "virtual accounts." It's cheap, fast & easy to create dozens of categories and shift money between them as often as you like. Much easier than opening dozens of real-world bank accounts and constantly transferring funds.

    TLDR; budgeting-by-account is antithetical to the YNAB method. Your categories are what gives your money purpose; the bank account is just a location.

    Reply Like 7
  • I am going to say something very controversial for the ynab community and say no it's not "wrong" if that's what works best for you.

    It is not ynab's recommended way. But especially if your emergency fund is the only thing in the savings account it really doesn't matter.

    However, if you have multiple savings accounts the ynab recommendation will help simplify things by combining all your savings into one account and tracking each savings goal in a budget category.

    I personally do many things that go against ynab's recommendations. For example I actually have a tracking account for my auto loan because I do want the visibility that provides and my reporting needs aren't so extensive as to justify buying something like quicken to use along side ynab. Another example along the same lines is I have a tracking account for my vehicles value. I started with the fair market value from Kelly blue book when I bought the car then once a year I recheck the fair market value and add a depreciation expense for the difference to I can track depreciation year by year.

    I've 0ersonally gotten to the point where I don't care if people here will say what I'm doing is wrong because it works for me and it is PERSONAL finance afterall.

    Reply Like
      • dakinemaui
      • dakinemaui
      • 4 mths ago
      • 2
      • Reported - view

      Navy Blue Foal Your auto loan example isn't equivalent here. You do what you do in spite of YNAB's recommendation because it provides additional value to you. That's a personal call without question, and apparently the additional value is worth the additional effort in your mind.

      In the case of an off-budget emergency fund, there is no additional value -- logical separation, interest earned, even the risk of accidentally spending it is the same in either case. There is, however, more effort involved with it being off-budget.

      With no difference in value, I would contend that the approach requiring more effort is the wrong way to do it.

      That really only leaves the question of whether the value is the same. To date, I've seen no compelling arguments to the contrary.

      Reply Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 4 mths ago
      • 1
      • Reported - view

      Navy Blue Foal Yeah, totally different thing. I also track my net worth in YNAB and it gives me great value. Especially over time. I think that's more of a beginning budgeter recommendation by YNAB. You don't need extra complications when you're just starting out and learning the method. If YNAB didn't want you to track net worth, they wouldn't have tracking accounts.

      Tracking net worth is a more advanced financial concept after you have budgeting under control.

      Reply Like 1
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 4 mths ago
      • 2
      • Reported - view

      Navy Blue Foal I've often thought a fun thread would be a "YNAB Confessions" where we all share the stuff we do that is not the official line.  Either to learn better (or worse) methods, or just have fun.  But I'm afraid it would get ugly really fast 😂.

      Reply Like 2
    • dakinemaui the point is it makes no difference either way. It really isn't any more complicated it matters what works best for each person.

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

      Navy Blue Foal It requires more effort. More effort is more steps. More steps is more opprotunities for mistakes. Therefore it is more complicated.

      Reply Like 1
    • nolesrule more effort is relative. I find it's more effort to manage finds on budget that I have no intention of spending anytime soon. More potential for problems that make the whole budget go out of whack isn't worth it IMO. Maybe instead of telling bbn people they are doing it wrong because they dobt do it your way you can learn to accept bot everyone does things your way.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 days ago
      • 1
      • Reported - view
    • Superbone or types on their phone which seems to have a mind of its own.

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 7 days ago
      • Reported - view

      Navy Blue Foal More effort is relative. Less earned interest is not. 

      You leave interest on the table when you silo out only certain funds to go to a savings account. Why do more work and end up with less money, even if you think the more work is less work?

      Reply Like
    • WordTenor that makes no sense. Interest earned is in no way related to whether the money in on or off budget in ynab.

      And if you are implying that by having it off budget means you cant mix it all into one account that still dosent matter. 2 savings accounts with 500 each will earn as much as 1 with 1000 assuming the rate is the same...

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 3
      • Reported - view
      Navy Blue Foal said:
      I find it's more effort to manage finds on budget that I have no intention of spending anytime soon.

       I’m curious what effort you’re expanding on managing funds that are just sitting there. 
       

      As for the original topic, almost everything I do operates out of my online savings account. Almost all spending goes on a couple of credit cards and the cards are paid out of my savings account. My checking account has a little money in case I need cash for some reason or if I shop  at a store that only takes debit. So, my emergency fund, and everything else, is on budget. 

      Reply Like 3
      • bret
      • bret
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal 

      A good cash-management strategy is to keep as much as your cash in high-interest-yielding accounts as possible. Why stop at just "Emergency Fund"? At any given moment, around 85% of my cash on-hand is located in high-interest savings accounts -- a lot more money that what's in my emergency fund. I only keep enough money in checking to cover upcoming expenses.

      In practice, it's a pretty easy strategy to implement. Checking account getting "too fat"? Transfer some money to savings. About to make a large purchase? Transfer back to checking. Easy peasy. Much easier than trying keep an account balance in constant sync with a category balance (or worse, a sum of multiple category balances.)

      Reply Like 2
    • bret first off you can do that if you keep off budget savings. Just need a second facings account.  Or for me I have a checking account from a local credit union which pays the same interest as my online high yield savings.

      Reply Like
    • Habanero Salsa 

      Keeping everything in sync is work whereas if it's off budget there really is nothing to manage.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 1
      • Reported - view

      Navy Blue Foal Well, I’m hopeful that things will click for you soon and you’ll realize that trying to keep a savings account in sync with a category is unnecessary busywork. 

      Reply Like 1
      • bret
      • bret
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal 

      If I kept my savings account off budget, I wouldn't have much of a budget left. As I said, I keep around 85% of my money in there.

      I can't tell you what the money in my savings account is for -- my budget categories are what gives the money purpose. The savings account is just a place to store it, that happens to yield better interest than my checking account.

      The point is, the balance in my accounts is not related in any way to the balance of my categories. I'd gain nothing from doing that. Indeed, if I tried doing that, to keep things feasible I'd almost certainly have to keep less in my savings account than I currently do, which I believe is the point that WordTenor was making.

      If you have a checking account that offers the same interest as a high-yield savings account, fantastic! In that case, the only reason for spreading money between accounts would be for extra security/peace-of-mind, i.e. not keeping all your eggs in one basket. (Again, a cash-management strategy, not a budgeting strategy.)
       

      Reply Like 2
    • Habanero Salsa That is precisely my point, keeping it in sync IS unnecessary busy work, which is why I keep it off budget so there is nothing to sync.

      Reply Like
    • bret That makes my head hurt but hey you found something to works for you. I'm not going to tell you it's wrong, but I expect the same in return.

       

      My point is you COULD keep extra money (on budget) in a savings account while still having a off budget emergency account, if you wanted to.  Keeping some on budget money in savings and keeping emergency fund off budget are not mutually exclusive.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal Good luck. When it clicks why that’s suboptimal, you’ll be making progress, but if it works for you it’s better than nothing. 

      Reply Like
    • Habanero Salsa 🤣that's funny because it sounds to me you're the one with the sub-optimal setup.  More money on budget it more problems to keep everything in sync.  And emergency savings is often both a large portion of money and rarely accessed making it optimal for keeping off budget.  Keeping everything on budget seems like an over controlling way to do things.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 1
      • Reported - view

      Navy Blue Foal 

      Navy Blue Foal said:
      More money on budget it more problems to keep everything in sync. 

       I don’t have anything to keep in sync. I spend out of my categories. The money sits in one savings account with the exception of something similar to a personal petty cash fund in a checking account.

      Navy Blue Foal said:
      Keeping everything on budget seems like an over controlling way to do things.

       Yes, I control my money. I’m not sure what’s over-controlling about it, though. 

      Reply Like 1
    • Habanero Salsa that made precisely no sense in relation to the topic at hand...

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 1
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      Navy Blue Foal It would if you understood the topic at hand. You keep talking about keeping things “in sync.” What do you imagine needs to be kept in sync with on-budget accounts?

      Reply Like 1
    • Habanero Salsa imagine?  You clearly are the one who dosen't understand. This isn't anything imagined just simple math. Budget categories need to = balance of on budget accounts - unclear transactions. Do you need a flow chart to show you?

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal The program does the math. What intervention do you need to do to keep that “in sync.”

      Reply Like 2
  •   Thank you for starting this topic!  About six months ago I moved my emergency fund to a higher interest rate savings account and moved it out of budgeting and into tracking.  You see, I discovered there was a loose nut behind my keyboard that kept scooping money out of my emergency fund!  So I needed pulling money from emergency to be more work, not less. 

      It is working pretty well for me, except for my age of money metric, that has really suffered.  In my mind, I know the $ value I need to cover 3 - 6 months of expenses.  I then pay my emergency fund as I would a bill each month.  And when I look in reports, at my spending pie, I can see a % of my "spending" going to savings i.e. Emergency Fund, Retirement Fund, College Fund .  It makes me feel better to see the slice and know that some of my "spending" is for future emergencies.

      If I have to pull money from the emergency fund...  I categorize the transfer back to checking  as my emergency budget category and then move it from emergency budget into the category that needed the funds.  This allows my emergency fund "spending" to be adjusted down in my reports.  

      I totally get the budgeting into the future months as an emergency fund, the logic side of my brain loves the idea.  But the un-logical, irrelevant to accounting, emotional side of my brain feels better thinking of savings as "spending".  I also like the feeling and false sense of security of seeing that big lump sum sitting in that tracking account.  So the heart won on this one.    

    Annieland My "YNAB Confessions" post would be "I do it because it feels better, not because it's better" 

    Reply Like 3
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 8 days ago
      • 1
      • Reported - view

      FieldOfPoppies 

      I stopped seeing my emergency fund as "emergency fund" (unusual or unlikely happenstance) and began seeing it as a Life Happens fund (inevitable expenses with unknown timing).  Most of what it is intended to cover are things that are likely to happen; I just don't have a clear sense about the timing.  By keeping the funds on-budget, I'm able to keep a list of expense types funded:  car insurance deductible, moving fund, car repair/maintenance, medical/dental, Circle of Life, income disruption. (and a future vet expenses fund possibly).

      It makes me feel better to see just how much is allocated to each of those expenses; it's comforting to see that I can handle multiple unrelated simultaneous events.

      Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 7 days ago
      • 2
      • Reported - view

      FieldOfPoppies An account is an arbitrary line in the sand. As you describe, you can still move money out of your emergency fund into checking. So why does that line in the sand feel firmer than the one in the budget?

      Interrogate that, and then see if you can shift that feeling that “Doing x makes this money untouchable” to the category instead of the account.

      Reply Like 2
      • dakinemaui
      • dakinemaui
      • 7 days ago
      • Reported - view

      WordTenor Moreover, that off budget account doesn't even prevent you from spending it. If you overspend in the budget account, that's obviously missing money. If other categories need their stated balances, you'll have to rob the external account to replace those missing funds.

      So much for that line in the sand! 😆

      Reply Like
    • dakinemaui Actually it does. By soloing it into a separate account it's safe from being accessed. Short of either fraid or explicit choice on your part.

      Reply Like
      • dakinemaui
      • dakinemaui
      • 7 days ago
      • Reported - view

      Navy Blue Foal I believe I outlined exactly how your external account will be diminished. What part of what I said is inaccurate?

      Reply Like
    • dakinemaui the whole statement of yours is false. Did I need to repeat myself again? Because as i said if the money is in a separate account is CANNOT be spent apart from fraud or an explicit action by the account holder.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal The same applies to on-budget accounts, so that’s pretty poor reasoning. 

      Reply Like 2
  • Navy Blue Foal said:
    Maybe instead of telling bbn people they are doing it wrong because they dobt do it your way you can learn to accept bot everyone does things your way.

    If this was merely a workflow preference -- alternatives ways of achieving the same result -- then I think people would be a lot more accepting.  (However, I think it's fair to point out that some workflows are less efficient than others. It's a public forum and onlookers can draw their own conclusions!)

    However, insisting on keeping Emergency Funds (EF) in off-budget accounts is usually more than just a workflow preference -- it is a HUGE RED FLAG that you haven't fully bought into the YNAB system and aren't realizing all of its benefits.

    You should reflect on why you feel it necessary to keep your EF money in an off-budget account. Does "hiding" EF money in a savings account make you less tempted to spend it? I.e. are your spending decisions still based more on account balances than category balances? (If so, why bother to sort money into categories if you're not going to heed them when it really matters?)

    I'm not intending to single anyone out here. The "you" in the above paragraphs is just rhetorical; these are questions that all YNAB users should reflect on! And I certainly don't wish to imply that the "YNAB system" is the one-and-only-way to operate a budget. I've adopted a slew of workarounds to suit my needs. But on this particular topic, I don't think there's much wiggle room -- category balances, not account balances, should drive your budgeting & spending behaviors. That's fundamental to the envelope budgeting system.

    Reply Like 6
  • I think this is right, Bret, and I also think it's okay if it takes someone time—even a long time—to get there.

    Make your savings part of the budget is scary. If you haven't gotten to the point where you really trust your categories, it feels a little like withdrawing all of the money in Benjamins and putting it into your wallet along with the money you were going to spend at Wendy's.

    So for many YNABers, I think it has to go in stages. You leave your savings account off-budget, or you sync it to a category, or you (and this is also the rhetorical "you") add your your "regular" savings account to the budget but not your emergency fund savings account.

    And then, sometime later—a few weeks, months, or years—you have a moment of clarity. YNAB is doing something really good to the money in my checking account. The balance keeps going up, and I've stopped spending all my money without realizing where it's going. Maybe I should see if it can do the same for my savings account...?

    It can, of course. And it can do more than that: having your savings in your budget is the only way to truly reap the benefits of Rule 3, because if you can draw on a pool of off-budget savings, you're not really rolling with the punches, because you can't see the tradeoff you're making.

    So, we still recommend that all YNABers make their savings part of the budget right away. But if it takes time to get there, I completely understand that.

    Reply Like 1
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 7 days ago
      • 1
      • Reported - view

      Matthew Sure. But between YNAB’s own materials, and Nick True becoming the unofficial official material, the idea that savings shouldn’t be a tracking account gets lost. 

       I absolutely set up my savings account as a tracking account when I first started. And I was every bit as indignant as our friend here when people told me I was wrong.  And if people had been any gentler about it and told me it was OK to leave the training wheels on the bicycle, I would probably still   be clinging to an unbelievably inefficient set up. Instead I got my budget optimized and figured out that I didn’t have it right.

       Training wheels are great for bicycles. But if you have them on a motorcycle they not only don’t work, you also look silly. 

      Reply Like 1
    • WordTenor the only thing that is silly is the inssistance that ynabs recommendations are the only right way. As if were an equation with only one right answer. On or off budget are equally valid ways to do it.   I have done both, and after having it on budget I found off budget works best...for me. Your millage may vary.

      I find keeping it off budget solves two things.

      1, it simplifies the budget. By keeping unnecessary things such a a stash of cash that is rarely if ever (hopefully never 🙂 except maybe to add to it) touched its less that go go awry.

      2. It silos off the cash as a protective measure

      The only real benefit I can see to putting it on budget is to consolidate it into an already existing account. Which if that's your priority then great.

      Reply Like
      • WordTenor
      • Arranged the menu, the venue, the seating.
      • WordTenor
      • 7 days ago
      • Reported - view

      Navy Blue Foal  Your mileage indeed may vary, because for reasons that are still unclear to the rest of us, you are driving around with a half ton of cement in your trunk. 

      Reply Like
    • WordTenor That is the problem, this insistence that only you way is correct. They both work, they both have their advantages and disadvantages. I find the advantages of off budget outweigh its disadvantages for my usage. Your half a ton of cement is my bank vault? Or idk where I'm going with that analogy. But I think to call it a ton of cement is unreasonable, and I have yet to hear any real reason why its so bad other than because we said so.

      Reply Like
    • Navy Blue Foal We recommend including your savings accounts in your budget, because leaving them off-budget means you aren't budgeting them. Jobless dollars are a weak link.

      You stated that those dollars are rarely, if ever, to be touched. What is your plan for them? Are those funds strictly for apocalyptic dangers or are they a "Loss of Income" safeguard? Is a portion of that money for emergency medical bills, or is the entire amount meant to be used to invest in retirement? Are you saving separately for car maintenance, or will you take money out of that savings account to cover a flat tire? If so, how much of that money can be used for roadside assistance without interfering with what else you need that money to cover?

      Including savings in your budget is meant to streamline that decision making process - you shouldn't have to resort to your savings out of panic.

      I understand how having money in a separate account can make them feel safer, but if the time comes that you need that money, it won't matter where it's physically located. What will matter, is if you've already broken down exactly what you can cover. Making the decision to pull funds from a certain category should hold the same weight as deciding to withdraw funds from a certain account. 

      We want you to budget all of the funds you have access to on a regular basis, not just some of it. This isn't meant to be a "because we said so" but a "results tend to be better." However, YNAB can't force you to take a certain approach. If you're having trouble making things add up with that account on budget, we'd be more than happy to take a closer look to see exactly where things are going wrong.

      Reply Like 4
    • Faness the fallacy with that statement is that just because it's not on budget  dosent mean there isn't a purpose for it. Whether it sits in an emergency fund category or sits off budget it is still set aside to do it "job".

      Reply Like
  • Navy Blue Foal said:
    more problems to keep everything in sync.

    What are you keeping it in sync with? None of my category balances add up to any particular account balance so there is zero work to have all my accounts on budget.

    Reply Like 1
    • jenmas that would be an even worse way...to try to keep it on budget and a separate matching account. Not sure where that came from...

      Reply Like
      • jenmas
      • jenmas
      • 7 days ago
      • Reported - view

      Navy Blue Foal you're the one that says you have problems keeping things in sync and I am trying to understand what you are trying to sync up.

      Reply Like
    • jenmas yes because any on budget money has to match up with on budget  account balances (after accounting for uncleared transactions), I would have figured that should be obvious...

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 1
      • Reported - view
      Navy Blue Foal said:
      yes because any on budget money has to match up with on budget  account balances (after accounting for uncleared transactions).

       You understand that the program automatically does that math, right? Budget account balances = category balances + to be budgeted. 

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

      Navy Blue Foal I spend based on my category balances as long as my accounts are reconciled (which they do. Since 2014 I've never had to do a reconciliation adjustment for more than $0.03 from my wallet account), anything that is in the budget exists in my various accounts so there is nothing that has to sync/match.

      Reply Like
    • Habanero Salsa not very well. It gets out of sync several times. And there is a correlation between the amount of money on budget and how far things get out of whack. I've had to do fresh starts because of this. Less so since reducing how much is kept on budget.

      Reply Like 1
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal The problem isn’t the way the program does math. The problem, it appears, is that you’re trying manually to impose a balance that the program doesn’t care about and you’re not doing it well... which is understandable because it’s a lot of tedious work. 

      Reply Like 2
    • jenmas 0.03 is impressive. I've ended up with much more in very random amounts that seem to come from nowhere. But ive found reducing on budget funds (by moving emergency savings off budget) has greatly reduced both the amount and frequency of this.

      Reply Like
    • Habanero Salsa what is that supposed to mean?

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal It means that the program knows how to do math. If the math appears off from what you expect it to be in the scenario, you’re the one introducing the problem. 

      Reply Like
    • Habanero Salsa Not true. The software gets screwy many ways all on its own. Often though some variation of SFTF.

      Reply Like 1
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal That’s why I said “in this scenario.” Are you positing that this is a SFTF issue or just introducing an irrelevant point. 

      Reply Like
    • Habanero Salsa sorry was that not clear enough? It is entirely relevant to unreliable calculations that cause inconsistencies I actual money on hand and the budget. Less cash on budget means less opportunities for this to occur and at smaller amounts.  I've literally had to do a fresh start on a couple of occasions because numbers were clearly not adding up even after reconciling.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 2
      • Reported - view

      @Navy Blue Foal Again, is this an SFTF problem? If not, that bit of funkiness is irrelevant. And, in any case, YNAB does the math accurately, it just doesn’t necessarily alert you what it’s done.
       

      Nothing you’ve written implicates anything other than user error in the attempt to implement some kind of idiosyncratic methodology. 

      Reply Like 2
    • Habanero Salsa boy they should hire you to work for ynab. You got the company line down pat. If it dosent work it's your fault. Must be nice to just ignore reality.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal Other than my very first post here lamenting having to move to YNAB, or not liking the lack of better reimbursement handling, or not liking the red arrow's being gone, or not liking the odd implantation of pacing on category balance by date goals, or not liking the single-month view, and probably some others, you're spot on in your characterization of my views.

      Reply Like
    • Habanero Salsa So it's situational. The ynab view is the gospel truth when you agree with it?

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal If you recall lo those many minutes ago when I said "if it works for you, it's better than nothing," you'd see that this is just another instance of your making up stuff.

      Saying that YNAB is right about math isn't the same as saying YNAB is right about everything.

      Reply Like
    • Habanero Salsa Ya, you said that, but did you mean it? In the context of everything else you have said it sure looks like you were being more sarcastic than anything else.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal I meant it. Just because you’re wrong about whether YNAB can reliably do math doesn’t mean you’re wrong about off-budget savings working better for you. 

      Reply Like
    • Habanero Salsa Who said I was wrong about ynab. Can you truly say with 100% certainty there has never been a bug with the formulas it uses?

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal I can truly say that you’ve never seen an arithmetical error in YNAB. 

      Reply Like
    • Habanero Salsa That's not what I asked. I asked can you say it has never happened (whether or not you have seen it).

      Reply Like
  • Navy Blue Foal said:
    jenmas yes because any on budget money has to match up with on budget  account balances (after accounting for uncleared transactions), I would have figured that should be obvious...

     You're trying to budget-by-account in a budget-by-category software.  You can make this work, but it's a whole lot of unnecessary work.

    Reply Like 1
    • HappyDance Um you obvious havent read what I said because that is not even close.

      Reply Like 1
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal When multiple people read it that way, perhaps it’s a lack of clarity in the writing. 

      Reply Like 2
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 7 days ago
      • 1
      • Reported - view

      Navy Blue Foal 

      My apologies. I did jump to a conclusion and misinterpreted what you said.  I read that "on budget money has to match up with on budget account balances" and assumed you also meant that category balances had to match account balances.   You are correct:  the total of on-budget accounts does have to add up to the total of all the categories. Sorry.

      Reply Like 1
      • dakinemaui
      • dakinemaui
      • 7 days ago
      • 3
      • Reported - view
      HappyDance said:
      the total of on-budget accounts does have to add up to the total of all the categorie

      The only thing is that this is ALWAYS TRUE. No user involvement required.

      Reply Like 3
    • dakinemaui until the software screws it up.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal You can’t provide a single example of the software screwing that up. 
       

      Post screenshots of YNAB messing up that math, please. 

      Reply Like
    • Habanero Salsa sorry I didn't save a collection of ynab screwups for you. How inconsiderate of me right?

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal Well, generally speaking, the person making the claim bears the burden of proof. When one makes the claim that YNAB makes arithmetic errors and you're the only one who seems them, it's much more likely that it's user error than anything else.

      Reply Like
    • Habanero Salsa your choice of words not mine. And I seriously doubt I am the only one to notice these. With how many people who come complaining about the SFTF bug I know I am not.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 2
      • Reported - view

      Navy Blue Foal A. The SFTF issue isn't a math issue. B. This isn't an STFT issue. C. No one is claiming YNAB is perfect, only that it doesn't make arithmetical errors.

      Reply Like 2
    • Habanero Salsa A) only in the same way that a gun doesn't kill people, people do. B) Yes most of the time it is. C) that's a generality that is generally true but likely not always. I doubt the cpu of the server ever returned anything other than 4 when it is asked what 2+2 = but when the developers mess with the underlying formulas bugs can and do get introduced for a small period of time.  I have had one issue that I can see nothing else to attribute it to other than a formula bug.  But as I have said most the time it is an issue with it's idiosyncrasies around SFTF, which is in a way a bug, and many others besides myself consider SFTF a bug.

      Reply Like
      • dakinemaui
      • dakinemaui
      • 7 days ago
      • Reported - view

      Navy Blue Foal A bit of terminology for you: A bug is the program doing something the developer did not intend (e.g., displaying 5 after the user specifies 2+2). A design flaw is the program doing exactly what the developer meant it to do, but that's just a dumb thing to do. SFTF is clearly the latter.

      Reply Like
    • dakinemaui many of us with disagree with you on that. Staff is a big, you may not care about it but that dosent make it any less a bug.

      Reply Like
  • HappyDance said:
    the total of on-budget accounts does have to add up to the total of all the categories.

     But this is handled automatically by YNAB. It is the whole purpose of the software. If there were anything users have to do for that, nobody would buy YNAB. So I still don't get what is the extra work with having the Emergency funds on budget that Navy Blue Foal is talking about. 

    Reply Like 5
    • Ceeses when the software works as intended...not always true however as I have explained elsewhere in this thread.

      Reply Like
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 7 days ago
      • 1
      • Reported - view

      Ceeses 

      TBH, I don't either, but I was still wrong in my interpretation, so I apologized for that.  

      Reply Like 1
      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 7 days ago
      • 2
      • Reported - view

      Annieland 

      You called it!

      Reply Like 2
  • Nobody is going to convince Navy Blue Foal that keeping savings accounts off-budget is suboptimal so why try? And if anybody is confused reading through this thread, there is nothing special to keep in sync when your savings is on-budget. You fund your savings categories and keep your accounts reconciled. That's it.

    Reply Like 4
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 7 days ago
      • 1
      • Reported - view

      Superbone And if there's one thing YNAB can do, it's MATH.  Ten years and I've *never* observed a miscalculation on YNAB's part.  It's always been somehow my interpretation of it.  I would NEVER use a financial program that couldn't work with numbers reliably!  I'd run for the hills!

      Reply Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 days ago
      • 1
      • Reported - view

      Annieland I would sure hope so! Can you imagine a financial computer program that can't do simple math?! It's not even complicated math. There are no derivatives going on here.

      Reply Like 1
    • Superbone 🙄if only that were actually true.

      Reply Like
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 7 days ago
      • Reported - view

      Navy Blue Foal Wait, you seriously think YNAB just randomly glitches and spits out random numbers?  Just finds little ways to throw your budget numbers off just to mess with you?  It doesn't occur to you that maybe something else may be going on that is user-inputted?  Sorry, I just wanted to be clear.

      Reply Like
    • Annieland its happened numerous times. Less since reducing the amount of money that is on budget by moving my emergency savings off budget. And each time it happens I find nothing that was mis-entered. I re enter it in excel and it balances out.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • Reported - view

      Navy Blue Foal You’re just wrong. Straight up, 100%. If you believe YNAB can’t do simple math, you’d be a fool to keep using it, regardless of which accounts are on or off budget. 

      Reply Like
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 7 days ago
      • Reported - view

      Habanero Salsa Exactly!  Who would use a financial program they can't even trust to balance a checkbook??  There's a whole lot of dubious judgment going on in this thread..

      Reply Like
    • Habanero Salsa cant argue with the facts so you resort to name calling. Real nice.   Every software is going to have bugs. One of ynabs is occasional inconsistencies.  I've found a way to manage these by giving it less to mess up with. The fact that I use it anyway is testament to how well it ha does most things. But I'm not going to sugarcoat its idiosyncrasies.

      Reply Like
      • Habanero Salsa
      • Second generation user
      • Aquamarine_Pony.8
      • 7 days ago
      • 1
      • Reported - view

      Navy Blue Foal Where did I call you a name?

      Tell you what... I’ll use $100 of my emergency fund to donate to the cause of your choice if you can submit a verifiable arithmetic bug to YNAB support. Should be free money for a cause you like. 

      Reply Like 1
  • Navy Blue Foal said:
    You got the company line down pay.

     HAHAHAHAHAHAHA. (Deep breath.) HAHAHAHAHA. Does anyone smell toast? It feels like I’m having a stroke. 
     

    You really, really don’t know what you’re talking about. 

    Reply Like
  • Navy Blue Foal I found your people! 🤣 This will allow you to bypass YNAB and its error-prone math altogether.

    How 14 Bank Accounts Saved Our Budget

    https://www.busybudgeter.com/how-14-bank-accounts-saved-our-budget/

    Reply Like
      • VickiS
      • VickiS
      • 7 days ago
      • 1
      • Reported - view

      Superbone Wow!  With so many accounts to manage, no wonder their blog is "Busy Budgeter". 😉    

      Although, to be fair, we have 10 accounts, but budget (and spend) only through YNAB categories.   Except for our checking and main rewards CC, I rarely need to "manage" the others--they are there to maximize our earnings.....

      Reply Like 1
    • Superbone 🙄oh how these forums need a dislike button. I love how you are all more dogmatic about how to record savings than some people are about religion...🤣

      Why does it have to be one of two extremes? Either all on budget or no ynab and 14 accounts? How about some middle ground.

      Maybe you should put in a feature request to do away with tracking accounts because apparently they are evil...so help us ynab.

      Reply Like
      • dakinemaui
      • dakinemaui
      • 7 days ago
      • 1
      • Reported - view

      Navy Blue Foal I've been searching madly for a "mute" button.

      Reply Like 1
    • dakinemaui Alt+ F4 😁

      Reply Like 1
  • Navy Blue Foal said:
    oh how these forums need a duljdlike button

    I'm not familiar with the duljdlike button but yes, after many years of crowd-sourced YNAB budgeting, we've got YNAB best practices down to a science. If you stick around, you'll get there. By the looks of your other thread, you are open to experimentation so that's a good start.

    Reply Like
    • Best? says who? Having had savings recorded several different ways including as you recommend I find this works better for me.

      Reply Like
  • If you think YNAB has arithmetic errors, you should probably stop using it and find something that doesn't have math errors. If I had a calculator where 1 +1 never equaled the same thing twice, I'd throw it out.

    Yes, SFTF is a thing, but there are easy ways to prevent it, and the math still works out if you follow the instructions on how to calculate the amount of money in the budget that are provided by YNAB. I've never seen that number incorrect ever.

    Reply Like 1
  • I just discovered this awesome Youtube channel that explains how to use YNAB with such clarity.  YNAB should hire this guy!  This video explains 3 different ways of doing savings in YNAB, you may want to watch it to help clarify you're thinking on how you want to track your savings in YNAB.  

     

    https://youtu.be/tATZ3PhooW0

    Reply Like 1
    • Spring Green Drill it is refreshing to see someone who can admit that if you dont do it one specific way it is wrong or somehow suboptimal.

      Reply Like
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 days ago
      • 3
      • Reported - view

      Spring Green Drill Ugh. I'm sorry but this guy is giving bad advice. He calls the optimal way, the "lazy" way. Sheesh. He really doesn't get it. He advises matching account balances to categories. Yuck. This is dangerous information he is giving out in my opinion.

      Reply Like 3
    • Superbone I didn't watch it but I liked the premise that there isn't just one way. That said, at least we can agree on one thing...matching categories to accounts is a mess, I tried that for less than a month before switching back.

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

      Navy Blue Foal How about this? I agree with you that there isn't just one way and that it's called personal finance for a reason. I don't have a problem if your off-budget savings account only has one purpose. You are budgeting by account for this one case but no big deal if it helps you sleep at night. It's only when you are counting on those funds to cover more than one purpose that you might lose clarity and get into trouble. 

      Reply Like
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