Available in checking

I've searched, but can't find the right terms to yield the right results.

I understand the budget treats checking and savings accounts the same ...  a pool of money from which debit transactions are made.

I get that.

What I don't get is this:

Let's say I budget $5000 for a vacation.  Doesn't matter if it is in checking, savings, or a combination of both as far as the budget is concerned. The money is available, so the category is green.

But.

I get a lot better interest in savings than checking, so I move all $5000 to savings.

Again .. nothing changes from the budget perspective.

Time comes, and I want to pay for airfare.  Budget category shows plenty of available, so I send in the check ... and it bounces because all the money is in savings, not checking.

How do I account for this?

Do I need to check YNAB budget category to make sure the money is available in the budget, THEN check my checking account to make sure the money is there, too?

It seems like this is the right answer.  But, am I missing something?

If that's the answer, then how do I determine my expected monthly outflow from checking and ensure I have that amount (plus a buffer) in checking at the start of the month (moving everything above that to savings)?

 

Thx

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    • nolesrule
    • Stealing From the Future fix is an improvement but is incomplete....
    • nolesrule
    • 4 mths ago
    • 2
    • Reported - view

    What you are asking is about cash flow of accounts. You should always check that the account you are planning to spend money from has enough money in it, particularly when you are making an uncommon purchase. if there's not enough, you need to move some from another account.

    it's also recommended to pay attention to what other spending might come out of that account in the short term prior to more income arriving.

    Turning on the running balance and using scheduled transactions as much as possible can help visualize future account balances.

    Like 2
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 4 mths ago
      • 5
      • Reported - view

      Personally, we've simplified the cash flow planning even further using credit cards for most spending so we know ~3.5 weeks in advance how much money needs to be in the account when it comes time to make the credit card payments.

      Like 5
    • nolesrule Yeah once your off the float and know your cash spending and stuff, it definitely does become a lot easier. 

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 mths ago
      • Reported - view

      Slate Blue Pilot (2903ac015cdb) And until then keep more in checking.

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  • As a follow up to nolesrule 's answer, your required cashflow might not be a number that you can easily lay your hands on if you are just getting started. You'll need to get a sense of how much money moves out of your checking account over time.

    I've been YNAB'ing since summer of '14, so I know that I need generally $X in my checking account on the first of the month. This will cover the higher end of the average of my monthly credit card bills, 2 mortgage payments, 2 condo association payments, 2 HOA payments, my monthly taxable investing, plus a buffer of about $1000. Therefore, when I get paid on the 7th and 22nd, I know how much I can transfer to a savings account to be ready on the 1st. Now, if I put a large charge on my credit card, I have a minimum of 3 weeks and possibly even up to 6 weeks before I'll have to pay the credit card bill (I autopay the statement balances 2-3 days before the due date), so there is plenty of time to either a) refrain from transferring money to my savings account on the 7th or 22nd (preferable) or b) transfer money from savings account to checking account (less preferable).

    Like 1
  • I have a category in my budget for a Checking Account Buffer (or cushion). This way I know that no matter what, I will have that amount in my checking account.

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 mths ago
      • Reported - view

      amp97 I always wonder why people do this? Don't you already have some sort of emergency fund that has more than that in it?

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      • Vibrant
      • No more counting dollars, we'll be counting stars
      • vibrant
      • 3 mths ago
      • Reported - view

      amp97 how does having a buffer category with $1000 in it help you if you've only got $1500 total in your checking account when you need to buy $2000 plane tickets?

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      • Bruce
      • Software Engineer
      • Bruce
      • 3 mths ago
      • 3
      • Reported - view

      amp97 Just curious, how do you know that $1000 in that category is going to be in your checking account?  Just because it's sitting there in your budget category doesn't mean some other transaction didn't almost drain your account and there really isn't that money in that account any more.  

      Yes, that category does prove that you have $1000 in your budget, and can be considered a sort of mini emergency fund, but unless you keep transferring money back into checking after every transaction, you're not going to be certain that the money is in that account.

      Better to do the method mentioned above, where you have the running balance and scheduled transactions, so you can tell what your lowest balance is likely to be at any given time during the next month.

      Like 3
      • B's Gambit
      • bs_GAMBIT
      • 3 mths ago
      • 1
      • Reported - view

      Bruce amp97  Appreciate the dialogue on this. Many many many years ago I started the practice of keeping $1,000 as a minimum in our checking because my husband traveled for work and often would pay for things like hotels, food for the guys who were broke, and equipment and parts for the job. At the time we only had an American Express credit card and they are not accepted everywhere, so this was the back up plan. His job would reimburse him when he turned in receipts... Even after he had company credit cards I kept this practice up as it was needed here and there (mostly for the broke co-workers :) ) Now that I'm well established in YNAB  ya'll just made me realize I don't need this anymore. Bam! I have an extra few bucks, thanks.

      Like 1
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 3 mths ago
      • Reported - view

      amp97 Seriously, rethink this.  It totally doesn't work this way.  You can have a buffer for overspending a category, but in no way does that translate to what is actually in your checking account.  

      I sometimes forget I need to have $500 in my 20+ yr old credit union account to avoid a fee.  Yes, if I had half a brain I would keep a better cushion *in my checking account* but I like to roll on the edge.  If there was a way to have a category to make sure that $500 is always in checking maybe I'd do it. BUT THERE ISN'T.  And that's fine, because it just isn't how YNAB works.  Monitor the balances of accounts you send money out of.  YNAB can't and won't hold your hand in that regard any more than it could if you were using a paper register.

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    • Annieland It's a real cheap hack, but you can always put the minimum balance in the account name. That won't do anything to prevent you from going below the minimum, of course, but it might be enough of a reminder as you're entering the transaction to nudge you to transfer money in.

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      • Annieland
      • I was told there would be no math.
      • Annieland
      • 3 mths ago
      • Reported - view

      Matthew Heh I now keep it in the account notes :).  No worries :).

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      • Annieland
      • I was told there would be no math.
      • Annieland
      • 3 mths ago
      • 1
      • Reported - view

        

      Ok, maybe a few worries.

      Like 1
      • Annieland
      • I was told there would be no math.
      • Annieland
      • 3 mths ago
      • Reported - view

       Crap, I wrote that $5k check yesterday (new A/C 🥵), so I'm at $244 if they cash that check before Friday 🤪.

      Like
  • Hi, Jeff & Lucy! This article on managing your account balances in YNAB will be helpful as you determine a process that is best for you. :)

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