Budgeting income straight to categories instead of TBB

I worked yesterday on setting up a second budget for a shared housing account that I have with my roommate.

We both send in a pre determined amount of money, twice a month to cover both the Mortgage and all of our utilities.

When I set up the transactions that are the pre determined amount, I sent the money directly to the mortgage and utilities categories that they are supposed to fund.

Since the only thing we pay out of this account is set bills, it seemed easier to have it goes directly to categories and then when we pay the bills the money is always there since the Recurring transactions send the money right to where it is supposed to go.

Is there anything I should be worried about this set up? I really think it could work but I am new to YNAB and didn't know what things I should be looking for.

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  • It's not recommended practice, because reports and averages will read $0. The inflows are effectively a return.  

    Averages are pretty useful to understand actual usage and implement your own "budget billing" on utilities. (That's where you would contribute at the average amount, building a surplus during the low months, and drawing from that surplus in the high.)

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  • Are both of you accessing the joint budget, or just you?

    If just you, I wouldn't bother with a separate budget (or even separate accounts). It's a lot of overhead for no benefit. (It makes sense when you don't have YNAB, but that's not the case here.)

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  • dakinemaui thanks for the insight. My roommate won't ever look at the budget in YNAB but I do want it separate YNAB budget from my personal budget as we have a checking account and savings account that I don't want mingled with my personal budget. I think it is prone for errors. I have been tracking in an Excel chart but would like to use the auto import functionality of YNAB to make it easier

    Most of my utilities are a stable set amount. The only one that varies is the Water bill but I am budgeting for the yearly average for the last year.

    It is a good point on the reporting but since it will have limited transactions, if I want to report I will probably export and use Pivot tables to see where we stand.

    I can see from your details while I would not budget directly to categories in most cases but I think this will most likely work for an automated process for me. I will relook at it after a few months of auto transactions and imports and see how it is doing.

    • Adventure Awaits Certainly you can make it work with a little more mental effort. If you're up for it, it's all good. An average of $10 in reports/QuickBudget means $10 more than you're budgeting / inflowing. You're working with deltas rather than amounts, and that will be different from your normal budget.

      I think I'd rather be consistent and just hit the Underfunded button to budget the month instead of trying to "auto-budget' with inflow transactions.

  • Adventure Awaits said:
    I do want it separate YNAB budget from my personal budget as we have a checking account and savings account that I don't want mingled with my personal budget.

    GIVEN a separate checking/savings account, it makes sense for a separate budget. However, I would question the starting point of separate accounts. Having separate accounts to enable a separate budget is circular reasoning. :-) 

    I'm speaking from a pragmatic standpoint primarily considering the effort involved. YNAB already tracks the purpose of every dollar. You don't need to use accounts to do that when YNAB is in the picture. Granted, the effort isn't a ton, but it is more than necessary in my view. I'm sure your Roommate could easily Venmo (or whatever) to an account in your normal budget.

    I'm really just asking the question to spark your own thinking. If you don't mind the additional work, then no problem!

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      • Herah
      • Orange_Clarinet.7
      • 1 mth ago
      • Reported - view

      dakinemaui It sounds like the account the housing is paid from may be joint with the roommate.  If the ownership of the account is different and this is not a marriage-style roommate arrangement, it's probably a good idea to wall it off and not mingle in a single budget or account.

    • Herah Yes, given a separate account, walling it off makes sense. The question I was asking is why have the separate account in the first place?

  • We set up the shared housing account so both of us can see where we are at and since we bank at the same bank, we have auto transfers set up. It is basically on auto pilot but at any time, either one of us can jump in and see where things are at.

    We had a system before where my roommate was the one who paid all the bills and I sent her a check. This shared account has been so much cleaner and with everything auto transferring over every month, we never have to worry about an early or late utility or mortgage payment negatively impacting a personal checking account. 

    We share a $300,000 mortgage in both of our names so it is nice to have the security of both of us having access to this account without either of us having full access to one or other personal account.

  • I feel like a lot of time you are continually going to see zeros all over the place when you go to look at the budget rather than seeing the budgeted amount, the activity and any balance left at the budget screen. It feels like you would continually be going in and making confirmations. If you have nothing "budgeted" but it is all within the transactions, it will be constantly zero. Reduces visibility at a glance is my impression. It also encourages a leave it and forget it mentality to me rather than active involvement in the budget. I would think that you would want to be proactive in checking that it is working well. Not saying you will but it gives that impression.

    Why not send all the transfers in as TBB, have all the pre-determined amounts set up as goals and then fund the goals at the beginning of the month? Very quick push of the button and you are actively looking at the budget.

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