Bank of America Keep the Change...

Hi all,

Anyone familiar with Bank of America's Keep the Change ?

I've had it ever since I began using BofA checking... so it automatically rounds up your purchases to the nearest dollar amount and transfers the change from your checking account to your savings account. It does this at the end of the day and makes one total transfer from checking to savings.

I'm wondering what the best way to handle this as far as categorization ? YNAB is setup so the transaction is auto categorized as a transfer from checking (outflow) to savings (inflow) but obviously it's not in a budgeting category. I'd like to take it into account somewhere so I could use it in the budget. I thought about totaling up all the transfers for the month and then budgeting that amount into my Emergency Fund category ? And then if I needed it, I could move some from Emergency Fund into whatever category needed it ?

Looking for any thoughts and guidance!

Thanks so much!

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  • I have this. I will say, my savings account is not connected to YNAB, just my checking. (I know, that breaks a rule but I'm not responsible enough *yet* (almost!) to have my savings dollars "available" to me. They still feel more off limits when it comes to using them when they are in their own, out of the reach of the YNAB moving money around rule. 

     

    ANYWAY. Within my checking I do have an "emergency fund" category. My save the change just counts as an emergency savings category outflow, even though its technically a fake outflow because its outflowing to my other account. 

     

    My keep the change is only like $20 a month because I don't use my debit card very much, so I just let my savings category grow super slowly and not worry about it. If your savings is in YNAB you would have to assign those $ to a category anyway when they showed up as inflow.

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  • I'd encourage you to unenroll from the Keep the Change program and fully embrace the YNAB methodology.

    Bank of America is promoting an account-oriented way of budgeting, where the location of your money (checking or savings account) denotes its purpose. The problem with that approach is that it's far too limited. You probably have lots of things you need to save for: A car/house down payment, maybe a vacation, an "emergency" fund,  and maybe even gifts for next Christmas 2019 (yes, you should start saving for that right now!)  Mixing all of those unrelated things into a single all-purpose "savings" account doesn't give you any clarity about where you stand on each of those goals.  It's a really coarse way of budgeting.

    YNAB invites you to assign your money to jobs.  Some jobs should be for near-term expenses like food or rent. Others should be for longer-term expenses like forecasted car maintenance costs. When you adopt the YNAB method, the location of your money -- checkings or savings account -- doesn't matter.  Only the jobs matter.  That's why a transfer in YNAB doesn't affect your budget and isn't associated with any category.  It's a budget-neutral event, analogous to moving money from your left pocket to your right pocket.

    If you embrace the YNAB method, those automatic transfers from BofA are just extra "noise" in your account register -- they'll just make it harder to reconcile your accounts and keep things in sync in YNAB. 

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      • jenmas
      • jenmas
      • 2 wk ago
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      • Reported - view

      I second bret : this account service adds needless busy work to your budget. If I allocate $100 to my car repair category it does not matter what account those funds live in. My account balances do not match any category balances because as long as you spend according to your account balances it does not matter where your money lives. I mean yes, on the day that a bill is paid, it matters that you have enough in your checking, but once you get a handle on your typical outflows you can simple manage to a general number. I know that my average monthly outgoing (mortgage, credit card bills, services that direct debit my checking account) is $X. Therefore I keep $X+10% in my checking account and everything else goes to a high yield savings account Sure there are one-off special situations like replacing my HVAC. But I had saved up for that over a year before I actually got around to having them install it so the money was definitely in one of my accounts. And the bill didn't actually arrive until 3 weeks after the installation and wasn't due for another 3 weeks after the statement billing cycle closed. More than enough time to transfer money out of savings and into checking.

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