529 accounts: worried about double-counting

I have two 529 accounts for my son, both of which are in the asset watch category (not the budget accounts).


When I auto-pay from my checking account into either of them, it counts as a transfer. HOWEVER, YNAB also demands a category for the payment. So a pot of money builds up in my YNAB budget, under the categories 529 Utah and 529 Maryland.


Doesn't that mean it's being double-counted? It looks like I have a pile set aside on-budget, but  the money really exists off-budget, in an asset account. Something seems off here that could hurt my budgeting.

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  • Moving money out of the budget requires a category. It is no different than any other spending. Each transfer should be categorized to the respective 529 category, which will reduce that category’s balance. 

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  • Silver Lion said:
    So a pot of money builds up in my YNAB budget, under the categories 529 Utah and 529 Maryland.

     Realistically speaking you are not building up a pot of money in your YNAB budget.  The 529 accounts are outside your budget, they are tracking accounts.  The budget does not even know they exist.  As WordTenor  said you will have a category in the budget called 529 that you fund monthly from the budget and then spend that money with payee as a transfer to the tracking account.  YNAB just provides a method of handling tracking accounts but their balance does not have any affect on the budget.

    Ex: On the first of the month you fund $100 to the 529 category and within the same month you transfer $50 to each 529 asset account.  Your budget category will go from $100 to $0 within the same month and your asset 529 accounts will increase in value but those are just tracking accounts, the funds in those are no longer available to the budget.  The budget does not even know or care how much is in those accounts.  

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    • Silver Lion  I want to affirm ynaber2613 's response here, and give some additional context, as this can feel tricky! ;)

      Here's what's happening in your budget when you transfer money to the 529 Tracking Accounts:
      1. You're setting aside money in a "529 Investments" category in your budget every paycheck to give that money a specific savings job: it's for college savings. You do this by assigning the amount you plan to transfer directly to the "529 Investments" category.

      2. You're logging that you've transferred money to these accounts. You do this by adding transfer transactions and categorizing those transactions as "529 Investments." This tells YNAB that the money you already assigned to the "529 Investments" category is the money you want to transfer.

      3. When you transfer money to those Tracking Accounts, that money leaves you budget. You'll see your "529 Investments" category reflect this—your Available amount will go to $0 after the transfers for the month are complete. This is because the money in the 529 Investment accounts isn't available to be assigned to categories on your budget once you transfer it off the budget.

      4. You still have that money, it's now tracked in the Tracking account, rather than tracked in a category on your budget.


      Here's more on making transfers and on Tracking Accounts, in case its helpful! :)

  • Got it. Since I don’t have my asset accounts linked, the money won’t show up till I manually adjust, but I get the concept now. I am effectively SPENDING the money in my 529 category (spending it into an account not in the budget). It doesn’t build up in the budget.

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  • Silver Lion said:
    the money won’t show up till I manually adjust,

     The money will show up in the tracking account as soon as you enter the transfer in the your account register. So if you enter a transfer from your checking account to the first 529, the balance in the checking account goes down and the balance in the 529 goes up.

    The interests earned won't show up by themselves, you'll have to reconcile the 529 account to take them into account.

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