How to handle a combined brokerage and checking account?

I have a brokerage account that is also a checking/debit account.  Most of the funds are invested but some is cash and will be used for budgeting purposes.  How do I handle this type of combined account in YNAB.  When I make my deposits to the account it is mostly for investing.  For example I deposit $1000 every 2 weeks but the bulk of it is meant for investing only.  I reinvest all dividends and interest earned.  At some point in the future those dividends and interest will be used as income.  Is there a good way to set this account up?

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  • Yes, you just have a category called investments and you reconcile your account from time to time and change the category on that reconciliation to be your investment account. 

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  • My problem is that an the investment account should be a tracking account while the checking/debit would be an on budget account.  I'm thinking the best way is to make a "fake" investment tracking account in YNAB so the balance of that account isn't available for budgeting.

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

      Cornflower Blue Stallion But I thought you said you budget some of the checking account balance? What's wrong with making an Investment category for the remaining bulk of the balance?

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  • You said that some of the money in this account is cash and will be used for budgeting purposes. I wonder: are you using any money in this checking account today as active cash flow for your immediate obligations and/or true expenses? 

    If you are, you'll want to ensure this is an on-budget account. If you have a portion of the balance that is untouchable because it's an investment, create a Savings category for that portion. The rest can be assigned to categories for your planned spending.

    If you aren't using any of this money today, it would be more straight-forward to add this as a tracking account. If you ever begin to use the money actively, you can close that tracking account and add a new budget account for the account so you can begin budgeting funds.

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  • I have direct deposits that go to this account every pay period.  Why would I have a long term investing account as a budget account?  The main purpose of that $ is for investing.  I don't see the logic in having an investing account as an on budget account.  When you take a distribution from that account then it would be income to be budgeted.  I think the answer is that I need to either make it an off budget account or split it into 2 accounts.  I'm trying to simplify all my accounts across the board.  The investment company I use had convinced me that I could use this account for both.  Unfortunately there isn't a good way to set that up in YNAB without having 2 separate accounts. 

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

      Cornflower Blue Stallion What's the investment money for? Things you would include in your budget? Or is it like additional retirement funds?

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  • What is the problem with having long-term purpose money on budget?

    What's the difference between an investment category and a category for a new car? Hopefully, I won't have to change car before 10 years from now, I still have a category I budget to every month for it.

    We also have a loan from my in-laws to offset the interest on our mortgage. The money has to stay in our budget account but we can't spend it. We need to be able to repay it at any time if my in-laws need it. If they don't need it, it will be part of our inheritance. I hope my in-laws are going to stay around for a lot more years. But I still have the money in a category in my budget, so we never touch it. And I can assure you, it's not pennies. It's more than we have in investments and about the same as we have in each of our 2 retirement accounts.

    The difference with an investment category is that investments fluctuate up and down. But this can be handled easily using the Reconciliation process for the account. You can have an automatic reconciliation transaction in your account every time you want and according to your preference, you can:

    • categorise it to the investment category and be done
    • categorise it to RTA and move the money to/from the investment category.

    About your point on income, why would the income only be counted when you cash out investments? What's wrong with counting it as income at each paycheck? It does not matter if the purpose is investments or groceries, it's still money you earned now and then put towards a purpose of your choice.

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  • I have something similar with a checking that is linked to a brokerage.  The first one is set up as an on budget checking account.  The second is an off budget tracking investment account.  The only twist is that the brokerage normally has both a cash and a securities balance.   I used to track that separately as well but stopped bothering.  So, just two accounts.  Checking is reconciled daily, and the brokerage weekly.  I don't bother with individual securities or the cash balance, just the total.  

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    • Saish Dawg I had a similar set up until I changed brokerages.  This brokerage account will be a long term investment account to be utilized in retirement and it will also pay any management fees associated with my IRA.  I've just been curious how best to set up this in YNAB.  It's been interesting to see the different responses and perspectives.

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      • Saish Dawg
      • saish_dawg
      • 2 mths ago
      • 1
      • Reported - view

      Cornflower Blue Stallion I guess a simple rubric might be:  will you budget and/or treat the funds as liquid (budget account) or will they be off-budget and/or illiquid (and hence a tracking account).  There's usually a tradeoff between accuracy (for example, my tracking the cash account of the brokerage separately) and simplicity.  No right answer.  

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    • Saish Dawg I figured there was a few ways to do it.  I guess I was looking to see if any one was better or if any had some sort of problem.

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      • Saish Dawg
      • saish_dawg
      • 2 mths ago
      • Reported - view

      Cornflower Blue Stallion Like most advice here:  do what works best for you.  :^)

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  • For purposes of reconciling, I wouldn't split it in YNAB if it is one account in real life (unless individual balances are obvious on the bank side). I'd either:

    1. Open a separate account (in real life) for funds I was planning to use on budget.
    2. Include the combined account on budget, and have an investments category that I would adjust after reconciling for value adjustments (as described by Ceeses). 
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  • 2 mths agoLast active
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