Setting a goal, savings and then moving to savings account

Hello.

 

Maybe, I am trying to do this wrong so let me know how to best do this. I have a current and savings account setup. I have it unlinked and do things manually.

 

Now as part of goals I budget for it and I see the availability but I always move it to my savings account at end of month. But since this is connected, when I move it removes money from my checking account.

 

But in my main checking account goals, the amount is still budgeted and the amount available is the available amount. Which is kind I have money in my checking amount but they are really in savings account. If i make an entry saying Checking -> Savings for the same account then all maths go wrong as the recurrring values are still as present.

 

How do you guys handle this?

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    • bevocat
    • Sometimes, It Just Sucks to Be You
    • bevocat
    • 1 yr ago
    • Reported - view

    I'm not sure I'm understanding you correctly. Is your savings account on budget or is it a tracking account (off budget)? If it's on budget, your categories are not affected by your accounts. Remember that YNAB doesn't care where your money lives, only the jobs you've assigned it to do.

    If it's an off-budget tracking account, then transferring to it will require a category because that is money leaving your budget.  What is the purpose of the money you're saving?  Let's say hypothetically you're saving $100 per month for a job-loss income replacement fund and $100 per month for college textbooks. You'd create a category called "job-loss income replacement fund" and budget $100 per month to it, and one called "college textbooks" and budget $100 per month to it. Then say you transfer $100 on the first of the month from checking to your off-budget savings account, you could set the payee as Transfer : <mysavings> and the category as "job-loss income replacement fund" and $100 for the amount. Then say you transfer $100 on the 15th of the month from checking to your off-budget savings account, you could set the payee as Transfer : <mysavings> and the category as "college textbooks" and $100 for the amount.

    Make sense?

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    • bevocat
    • Sometimes, It Just Sucks to Be You
    • bevocat
    • 1 yr ago
    • Reported - view
    Orchid Cleric said:
    But in my main checking account goals

     This part is a little puzzling though, because it doesn't really mean anything. There are no goals on a per-account basis. You just have categories in your budget and money available to budget from the accounts that you have put on-budget.

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    • bevocat Thanks for the reply.

       

      Yeah, I have been experimenting a bit to figure out a correct workflow. For last one month, when I added it as off budget account, i was allocating some goals. At the end of month i was moving to this account. So I did a transaction of Payee "Bank" and "Category" to the category that i set the goal for. This made the category available value to 0 which really is not the case as its actually available.

       

      Before that I tried with connecting the savings account as part of my budget where i moved money from checking to savines based on goal but the goal category value didnt change. It still had activity at 0 because I didnt really spent money on that category. If I did add a transaction with activity for that category then it was a double expense.

       

      But now after reading and reading WordTenor link, i think i am having an idea to how to represent it. WordTenor link was particularly useful. I think i will work with connected savings account too and will be moving the required money to savings account. And then when the time comes to actually, i think i can do a transaction where the money goes out from my savings account and the spent catgeory is the one I am setting goal for. This will result in the availability to reduce (giving me the actual view on that category). Hopefully, it makes sense.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 1 yr ago
      • Reported - view

      Orchid Cleric Yes, WordTenor is amazing. And yes, if you have a category that you're saving up in every month, and then finally you spend money on something that you categorize to that category, that category's available amount will be reduced. That's how the envelope budgeting system works. You put money in the "envelope" (we call it a category) month after month, until you use it to buy something, at which point, that money is no longer in the "envelope" anymore.

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    • WordTenor
    • I'm the oldest and the wittiest.
    • WordTenor
    • 1 yr ago
    • 1
    • Reported - view

    Https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/ 

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    • WordTenor Thanks, that was helpful.

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  • It seems you have a few high level options (likely others, there is no one right way to budget).

    * Use a tracking account.  Money you move from your checking to your savings will now remove those dollars as available to budget.  When you move money from savings back to checking (the latter is presumably a budget account), the money will be available again.  This is likely the most familiar option if you are not used to envelope based budgeting yet.

    * Use a category (optionally backed by a goal).  Here create a category such as "contingency fund" or "emergency fund" or "savings".  Move the money there, and it will now have a job (rule #1) and be safely allocated to that purpose.  You can also create a goal for this category (such as an amount to save per month or a target balance or whatever).  Once you are used to envelope based budgeting, this will simply feel natural. 

    * Stop tracking the savings goal at all.  When you wholeheartedly accept rule #2 (embrace your true expenses), then you likely will not have a "savings" category at all.  You will look ahead however many years you like and plan for those expenses explicitly, rather than having a more general cushion. 

    Good luck!

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  • Saish Dawg said:
    Use a tracking account.  Money you move from your checking to your savings will now remove those dollars as available to budget

     Saish Dawg but this does not seem to be the case my version of YNAB atleast. Whatever the money or the account (savings/checking) it seems its available to budget and i have to budget.  When I added my savings with XXX it asked me to budget which i just budgted to vacation and kept going forward. So my TO BE budgeted counter was 0 but available was the amount as the savings account value - which was fine with me. Its available to me.

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    • Orchid Cleric Did you create a tracking account?  This would likely be an asset.  Any amounts in a tracking account are not factored into your budget.  My guess is you created a normal on budget account.  Create an unlinked tracking account (asset) and move $1,000 there.  You should see it disappear from your available budget amount.

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  • Recommended practice is to have the savings account on-budget and transfer between them as you see fit. This does not impact the budget, because you're still planning to spend that money on the same thing. Only the location changed.

    Because you have multiple accounts, you must consider cash-flow when spending. If you want to pay for something out of checking and there's not enough money there, then you'll need to transfer some back from savings. (As before, this transfer has no impact on the budget.)

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    • dakinemaui There is no one way to budget.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 2
      • Reported - view

      Saish Dawg No, but there is always a recommended best ptractice, and thinks work best when you stick to best practices. Don't bother to try to argue with dakinemaui , who can walk circles around all of us when it comes to best practice budgeting strategy.

      Like 2
    • nolesrule That's hardly true, but I appreciate the sentiment. Saish Dawg You're right in that "best" is a subjective call. What is clear, however, is that various approaches have their own pros & cons. I'd encourage you to consider those in the context of your own personal situation when evaluating potential workflows, but also in the likely contexts of others when needed.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 2
      • Reported - view

      dakinemaui You are too modest.

      Like 2
    • dakinemaui Totally fair.  That was why I put them in an ordering of comfort with envelope-based budgeting.  :^)

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