Allocating HSA income directly to categories
I have an HSA account that I'd like to track in YNAB, and I was wondering whether there are any drawbacks to allocating the HSA's income directly to an HSA category instead of using "To be budgeted" and then allocating it via the Budget area. The main reason behind this would be to ensure that I never forget and spend non-HSA authorized charges by allocating it to something else.
Thanks in advance!
I recently added my HSA as a tracking account so I don't have to try and match a category to an account. I don't think it's really necessary to track it in YNAB, but I like seeing it in my net worth report.
The contributions to it are all taken out before I get my paycheck, so I manually adjust the balance every month or two, or before I know I will have an expense that I will have to use it for. I try to cover smaller expenses with an on-budget Health category so I can build up more funds in my HSA. Of course, I don't have very many transactions on that account. I might have chosen to do something different in a different situation.
nolesrule I have an expense category called HSA, which I use to keep track of transactions that can be covered by the HSA. Whenever my employer contributes to that account, instead of setting the income "To be budgeted", I just assign it to the HSA category. Then it immediately assigns that income's "job" as "HSA". I figured it was just a shortcut to actually going into the Budget and selecting the income from "To be budgeted" and assigning it to the HSA category, but perhaps I'm wrong?
Does that make any more sense?
If you're just going to have a single category like "HSA", I'd suggest you'd either leave that account out of YNAB or just as a Tracking account if you want it in your Net Worth or easy reference.
The budget is a tool to plan for future spending, helping you to make tradeoffs among the various categories that compete for your limited amount of money.
At first glance, it might make a little sense to leave it on-budget if you were trying to plan various types of HSA-eligible expenses. However, a little further thought would show that you wouldn't be "controlling spending" or making tradeoffs like you would elsewhere in the budget (at least I wouldn't). If I'm sick, I'm going to the doctor, regardless of whether those HSA funds are reserved for Doctor Visits or Dental Visits or Prescriptions, etc.
I have my HSA as an off-budget (Tracking) account solely because I like to be able to easily look things up. When was my last dentist visit? When did I get that tetanus shot? What was the name of that PT I used for my shoulder last year? Etc. I could track this elsewhere, but it's fairly easy to keep in YNAB.
I have categories setup for medical, dental & vision. When handling HSA reimbursements I just categorize the reimbursement "to be budgeted" then move the amounts to zero out my medical, dental or vision categories.
In the past I would categorize the HSA reimbursement directly to the categories, however when I looked through my reports it always showed I didn't spend anything for medical, dental or vision.
Is this the way you all are handling the HSA reimbursement?
I have some old medical debts, for which I'm on a payment plan. I have them set up as credit cards in my budget. I tried setting up my HSA as a tracking account, but when I transfer money from my HSA to my old debts, it asks for a category. But if I categorize it, YNAB thinks I have had income and shows it in the relevant category (e.g. Medical or TBB). I don't know what to do with this... Should my old debts not be credit cards? Should they also be tracking accounts? Or should my HSA be a budget account - but then how would I stop myself from giving those dollars other jobs by mistakes? I have really thought myself in circles here. Any advice? Thanks.
Thank you everyone for all the ideas. Ceeses - I think I do need to set up the debts as tracking accounts, and also create a budget category for each one (so that I can budget for the regular monthly payments). The HSA will have to be on-budget, so that I can assign dollars from it to the medical debt categories. There will have to be a separate HSA category, which all HSA dollars will be assigned to, until I assign them elsewhere. That money will never go into TBB, so I'll never assign it elsewhere, but it will be available to use to pay other medical expenses.
Faness - The system you described doesn't give me a way to budget for payments, only to track them. But I think by doing what you described, and adding categories for the debt payments, I should be able to make it work.