Savings- activity or budget?

Hi! I can't for the life of me wrap my head around how to budget savings. 


I set target balance goals on my six "quality of life", or long-term savings categories. In my accounts, I split the "to be budgeted" inflow between these six categories which counted as an activity on the account. Is this correct? Or should I simply budget the savings to each category, carrying over the budgeted amount month to month?

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  • Either way will technically get what you want done, but I personally put all starting balances and inflows as To Be Budgeted and budget to where I want them. 

  • Once you add money to the category it stays in the category until you spend it or move it to another category. You don't have to manually carry it over.

    Just inflow as, TBB, budget it to the appropriate categories, and leave it there. In the future, you can add to it or not as you wish.

  • Bring in new money as Inflow:To Be Budgeted and distribute the money to categories with budget entries.

    Putting money into a category directly from a transaction is not typically what you want, because it reduces the total spending. The only time this is appropriate is for a return or a reimbursement.

    Like 2
      • Birdie P
      • birdie
      • 10 mths ago
      • Reported - view

      dakinemaui I guess I should also add, I just started so this the money was coming from my starting balance inflow. Does this matter?

      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 10 mths ago
      • Reported - view

      Birdie P No, it doesn't matter. It just means the month you start isn't going to look anything like a typical month where the only inflows are generally going to be from income sources.

  • Just to fill in the "why" here, because this was something I wondered about too when I first started YNAB. Why do the two-step process of categorizing into "To Be Budgeting" and then distributing that money into various categories when I could take a shortcut and directly categorize them into those categories? Same result, right?

    It's mostly about reporting and making the various goals and quick budgeting features work properly. YNAB classifies "To Be Budgeted" transactions as "Income" and all other transactions as "Expenses." So if you record an inflow directly to (say) "Vacation", that'll show up in a report as negative vacation spending. Probably not what you want, unless that inflow truly was some kind of refund/reimbursement for prior vacation spending.

    Likewise, quick budget features and some goal types are based on budgeted amounts -- i.e. the numbers you enter in the "Budgeted" column. They won't work properly if you're not actually setting any budget amounts.

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  • 10 mths agoLast active
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