Making a Transfer an activity in a category - for savings

Still new to this and learning.

I struggle understanding how to visualize the connection of YNAB to my real account balances.

 

When I started I had $3k in a savings account specifically for "college fund."

So I made a category called "college fund" and put this money in it.  The "activity" column shows $3k now and the "available" column shows $3k.

Great!

However, I transfer money from my checking account into the college fund to "pay it."

 

How do I mark this as "activity" money for the "college fund" since its a transfer between accounts?  I'm missing some basic concept here.  Or, how do I properly deal with savings and/or categories which are for long-term goals?

 

Thanks!

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  • Similar question - I have another savings account labeled another category - call this "My Savings".

     

    It has an "available" amount of $500.

     

    $100 in real-life gets transferred OUT of this account to cover groceries (or whatever).  This is now an "activity" in the "My Savings" category - how do I make this transfer an expense/activity and decrease the "available" money in the "My Savings" category?

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

    Short version....

    Accounts tell you where the money is.

    Your budget categories tell you what the money is for.

    Don't confuse the two.

     

    Your budget should not have activity when transfering money between accounts in your budget, because transfers between accounts in your budget should not have a category. If you are creating tracking accounts, then you are doing it wrong and making it more complicated.

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  • Activity captures spending, which is the opposite of saving. Money is saved (reserved for some purpose) the instant you budget to a category.

    Where that money is located is independent of purpose: you can keep that $5 cash you intend to use for coffee in your front or back pocket as you choose.

    Read the link nolesrule provided for the recommended practice.

    Reply Like 1
  • Attempting to match category balances to account balances creates a lot of extra work for no real benefit. If you insist that you must do this, you must go to your budget page an reallocate those $100 from your savings category to where ever you like. For example, if in July you allocated $500 to the category (left column), you need to change that number to $100. That will put $100 in your TBB that can be allocated elsewhere. Alternatively, you can click on the green $500 in the right column and the Move Money Tool will open and you can move that $100 to some other category.

    Personally I see no benefit in trying to match categories and account balances. I have 3 savings accounts, 3 checking accounts, 2 cash accounts, 5 CDs, I bonds, and gift cards all as on budget accounts. Right this minute I have $65.77 in my Grocery category. Which account has that $65.77? All of them and none of them at the same time. I can tell you that I'm 95% sure that money will be spent using the credit card that gives me 6% cash back for grocery stores (can't guarantee it will be this payment method because what if I stop at the farmer's market on Sunday and I know the vendor doesn't code as groceries, in that case I'll be better off using the card that has a promo of 3% cash back on all purchases until next May). When the time comes to pay that credit card bill, the statement balance will automatically pull from Checking Account #1 because that's how I have the credit card set up. But that'll be in 2 paychecks from now so money will be flowing in and out of Checking Account #2 (where my direct deposit goes) to make sure that Checking Account #1 has $X in it by August 1 (other than mortgage and condo fee, most payments come out of Checking Account #2 because it's bill pay interface is simply better). I know that if I have $X in this account by the first of the month, everything that comes out over the course of the month (ie all the credit card payments because I pay with my cards for the vast majority of my spending) will be covered. And if I have to make a big expenditure for some reason, I'll have plenty of time to move extra to this account before the payment is due.

    Reply Like 1
  • Cyan Wizard said:
    So I made a category called "college fund" and put this money in it.  The "activity" column shows $3k now and the "available" column shows $3k.

    That's not the correct way to put money into the category. You should have categorized the starting account balance as To Be Budgeted and then allocated/budgeted (enter a number in the first columns in the Budget screen) the same amount to the College category. Activity should be $0.

    Reply Like 2
  • Hi Cyan Wizard ! We think of savings a little differently at YNAB.

    For transfers between Budget accounts, it's important to choose the right Payee. Scroll to the section with the title Transfer to/from account: and select the name of the other account you're transferring to/from. 

    In addition to that article on The Relationship Between Your Budget & Your Accounts, here are a few resources:
    – Here's an article showing you how it all works.
    – Take a look at this 7-minute Whiteboard Wednesday about savings.
    – Attend a free workshop about savings called Reach your Savings Goals!

    Let us know if you have any questions!

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  • Thanks all for the replies!

    Here is the REAL scenario: I get paid (into my account).  After I get paid I still move money from my checking account to my kids savings account for college.  This takes $50 out of my account and puts it into his account.

    Since my accounts are linked I get a transaction in YNAB to reconcile.  The way I'm thinking of this today is that I SHOULD be able to take this "linked transaction" and categorize it into a budget category ("College Fund").  

    The reality is YNAB does not care about transfers (I completely understand why) and so to properly account for this activity the solution is:

     

    Add $50 as a budget item into the "College Fund" category.

     

    My Conclusion/solution ( please correct  or reply if there is still another/better way):

    a "transfer" between your account which ends up as a "transaction" that you review cannot be considered in any way shape or form a "budget" item.  You need to discount transfers absolutely 1000% when "budgeting".  A transfer is a transfer is a transfer.  For YNAB it quite simply does not exist or impact the "budget."  If this transfer (transaction) is also intended to increase the "budget amount" for another category (e.g. my Kid's College Fund) then you, simply, MUST add the $$ amount transferred as money $$ budgeted in the destination category.

     

    Thanks again for the help and replies.  I hope my solution helps others!

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    • 4 mths ago
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    Cyan Wizard said:
    you, simply, MUST add the $$ amount transferred as money $$ budgeted in the destination category.

     I want to tweak one thing for you: don't think of it as "adding" money to the destination category. Where is that money coming from? It didn't poof out of thin air. All of your money is accounted for somewhere in your budget. So you have to MOVE it from some other category to the College Fund category.

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