Allowances best way to manage in YNAB

I have 2 savings accounts for my kids at BOA (under my name but nicknamed for them). Every week I automatically xfer their allowance. I set this up in YNAB as an auto transfer and have allocated the right amount as a monthly budget for YNAB. So far so good.  I have not set up these accounts in YNAB (the banking accounts). So now when a kid wants to buy something I charge it on my (linked in YNAB) credit card and then move the money from on my BOA app. How best to reconcile all this in YNAB. Do I just go ahead and set up kids bank account in YNAB and then what about the txn on the credit card. SIGH it seems rather complicated to manage a single $10 purchase (baseball cards for my son). 

 

Thanks!

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  • I have spending categories for each kid in the budget. I use that to run all transactions through that are paid by us for their personal purchases. If it goes negative, then they pay me back, either from their own bank account or in cash from allowance.  All inflows and outflows go through that category. The goal of the category is to generally keep at zero at all times. At times it does go positive, for example if they get a gift card as a gift and we "buy" it off them.

    When it is positive, I keep them apprised of their "Bank of Mom and Dad" balance.

     

    Personally, we don't let them spend from the money we put in their savings accounts. They get their allowance in cash (and have their own YNAB budgets). The money we put in their savings account is for the long-term.

    Also you need to keep in mind that savings accounts can only have 6 outgoing transfers max per month.

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  • I find that until the kids are teens, it's better to give them cash and let them navigate spending with that so it's a tangible concept.  Once that's mastered/understood, then the virtual money can be used.  We haven't had them document their budgets yet (ages 9, 7, 3), but rather they have jars they count regularly to see how much they have, especially when considering a big purchase.

    Reply Like 2
    • Dazed
    • and a little less confused
    • dazed
    • 1 yr ago
    • 2
    • Reported - view

    Fairly new to YNAB ourselves, but I really value it as a way to introduce and effectively manage money with our girls (11,7,4).  We created a YNAB budget for each of our girls.  They each have student savings accounts that garner 2%+ interest at our local credit union.  The 11 and 7 year olds get an allowance equal to their age weekly.  So, for example, my 7-yo gets $7.  10% is allocated to their giving category.  Then of what remains, 25% goes to future education, 25% goes to future retirement, and 50% (or $3.15) is TBB.  Every 1 or 2 weeks they'll budget their spending money into categories.

     

    I find it so much easier than trying to manage cash, and since so much of what we do is cashless, I think it's appropriate, even given their age, to teach them how to think about money in a cashless economy.  And when we used to operate in cash, most of the time they didn't have it on them when they wanted to spend it or were apt to spend it on a vending machine.  Now that they have a view of their financial worlds in YNAB, they are making pretty decent decisions about their money.  I encourage them to keep money in their snacks or fun money categories, so if a friend invites them, say, to go ice skating, they have the money to go already saved.  My 7 yo recently saved up $15 over about a month and a half, and sought out ways to earn an extra dollar here or there, to buy herself Instax camera film.  She was motivated by seeing the available balance go up in her YNAB category. 

    We are almost always with them when they want to spend their money, so it's very easy to whip out the phone and show them their budget.  If I make a purchase on their behalf, I apply the transaction to my Kids' REIM category.  When I transfer the money from their savings accounts, I assign that inflow to the same category, netting to zero.  And in their budgets, the outflow from their savings account to mine gets assigned to the relevant spending category.  They aren't buying things so often that it is very burdensome.

     

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  • I personally give my kid the cash (log it as an expense paid) and then have him manage his cash on his own. I find that he forgets and doesn't care as much because he can't see the money. I do have to buy things for him from time to time, but he would give me the cash, I buy and pay the card back. Also, I don't let him "borrow" and pay me back. He has to have all the cash upfront to avoid him thinking of creating debt as an option.

    Reply Like 3
  • I was curious for those of you that use YNAB budgets for the kids. How do the kids access the budget to view it? Do they have their own phones, or do you just login to it on your phone and show them?

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    • Teach Girls Mine have iPod touches, so they can sign into their budgets on there. But I usually find it easiest to just check their budgets from my app instead!

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      • Tray Zeus
      • Mistake Trooper, Droid Hunter
      • Orange_Router.3
      • 5 mths ago
      • Reported - view

      Veronica at YNAB can you elaborate on what you mean by "their budgets?"  I really want to help my 15YO start budgeting with YNAB, but have not found a method to do this without either giving him my YNAB username/password for a separate budget OR paying for a second premium account so he has his own.  

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      • mamster
      • mamster
      • 5 mths ago
      • 1
      • Reported - view

      Tray Zeus That's correct. My 15yo has a budget, and I just don't care if they look at our family budget, and I trust them not to mess with it.

      Reply Like 1
    • mamster I actually have been thinking a lot about this as my kids are getting older. Should they have access to our budget?  

      My dad was really good about talking me through making a budget while in high school, college, and as I was looking for a full time job after graduation.  But he never talked actual numbers in our family budget. 

       

      Ibe already atarted talking about number with my kids. Not necessarily salaries, but I do talk about house prices. I say what our house cost, and relate it to other houses around us since we live on the fringe of some multi-million dollar properties. Also I use it when talking about inflation - what we paid for ours, and what houses are selling for now, only 2 years later (I’m a real estate geek!). 

       

      I also use numbers for heating a cooling bills, or the water bill, especially if they are high because of, ahem.... extra consumption.... (leaving the hose running over night!!!)   

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      • Teach Girls
      • Teacher
      • Gray_Sloth.3
      • 5 mths ago
      • Reported - view

      Tray Zeus  we have digital ynab and it lets us set up as many budgets as we want. So I created three budgets: Family budget, Kid 1 Budget, Kid 2 Budget. The two kids budgets I set up just liked Dazed did above (thanks!! It’s working great!) As far as where the money sits I have two savings accounts and a checking account without Ally, an online bank. Once a month I have an automatic transfer of $72 from my checking account (at a credit union) to the Ally checking. I just pay it like a bill. Then every Friday I have an automatic transaction that takes part of that $72 and automatically transfers $9 to each of their savings accounts. I like the savings accounts because they earn a strong interest rate and my kids are getting to see that extra bump in money being deposited into their account. My kids are both nine so each Friday they get 9 dollars deposited into their accounts and they decide how to budget it using the YNAB app on my phone. I require them to split the $9 equally among the larger categories ($3 in Just For Fun, $3 in true expenses and $3 in savings). But they get to choose which sub categories get priority. One of my girls loves clothes and the other loves snacks so their interests dictate where they put the money. They already had money from their piggy bank saved up for 8 years so they started their accounts with a couple hundred bucks so their minim balance sits at $100 and is never touched and they have $100 or so in each of their savings goals. My goal is for them to have about $500 of their own money saved by the time they are 16 so they can put their own money toward an IRA (once they start working) or a car. So I set up a savings goal for each one that reminds them to put $ in those goals to reach that goal. 

       

      As as far as spending goes, say we are at the grocery store and I am buying my regular but they want a bag of potato chips.  I have a separate transaction and I pay with my ally checking account. They have their own receipt and I open up the YNAB app to their budget and they add in their transaction store price and category and then save it then throw the receipt away. At the end of the month I ads up their spending (usually only 3-4 purchases), create a split transaction with those 3-4 purchases) and transfer the money from their savings to my checking. So the YNAB app is always correct with balances and they know how much they can spend but the bank accounts are accurate once a month. Then I delete the individual transactions in their budget and reconcile. I just figured transferring the money from savings each time might run me against the 6 transfer limit as a savings account so I would do it this way for a while. 

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    • Tray Zeus Each of our kids have their own budget within our YNAB account. They usually have no interest in our budget, but we will show them especially if we're talking about things like priorities and vacation budgeting. 

      We do offer a free year to students, but if your 15YO isn't going to be getting a job in the next year it might not be the best time to start a new account for them!

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      • Khaki Storm
      • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
      • Khaki_Storm.1
      • 5 mths ago
      • Reported - view

      Veronica at YNAB is that one free year only, or free as long as they are students?

      Reply Like
    • Hey Ben Khaki Storm ! We offer one free year to current students and then a 10% discount on their second year, if they choose to subscribe. :)

      Reply Like
      • KD603NH
      • KD603NH
      • 4 mths ago
      • Reported - view

      Tray Zeus Use Family Budget, a YNAB addon, if you don't want them to be able to see your budget. https://familybudgets.online/login

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