How can I link a savings goal to a savings account
As stated in the title, I would like to be able to link my savings goal to a specific savings account. This would mean that every transaction onto this savings account, gets me closer to my goal.
Now this is not the case and I have to manually keep track of my goal by puzzling my way in my transactions.
This I understand, but when I budget 500 EUR in my savings category (the one where I have a savings goal) and I transfer 300 EUR from my checking account to this category, it states that I only have 200 EUR left for my goal... (and also that I'm 200 EUR closer to my goal, AFTER I just 'saved' 300 EUR..)
I'm doing something wrong and I don't know what it is.
esther michiel said:
I transfer 300 EUR from my checking account to this category
Straightening out terminology will help:
You budget and move money into and out of categories.
You transfer money between accounts.
You use the categories to plan and reserve money for jobs.
You use accounts to physically store (and physically spend) the money.
Do you have your savings account in your budget? That's probably where the confusion is, based on what you've said.
He says some things that are sort of sacrilegious for the YNAB community, but this guy explains different ways you can do savings in YNAB. If you like having separate accounts for reasons other than administrative (for me it's psychological) you have to do a little more effort. It is not necessary to have a separate account, that's the beauty of YNAB, but I still like to have a few goals in separate accounts, ex Emergency Fund and other Long Term goals are kept separately, so I can keep my Emergency fund account separate psychologically.
Faness Superbone WordTenor All fantastic responses and much appreciated. I think it's a psychological thing for me as well. I like my "Emergency" money to have it's own house so that it stay clearly defined.
And let me lead with this: I LOVE YNAB. It's been an amazing tool. That said, maybe y'all could help me with a problem I run into a lot and partly why I may not fully trust YNAB with being the only way to separate my savings categories. I have had to "make a fresh start" 5 times in YNAB and have recently completely started over again from scratch. I run into the issue that my account balances in YNAB are way off from my real world accounts. Therefore, not fully reliable... (i.e. YNAB checking is $5,000, but real world checking is $3,800)
Any ideas what I keep doing wrong?
Still not clear about savings goals and how to handle using funds from them to pay bills in real world accounts:
So lets say I have $4800 in Trust Fund - real world and in the budget aka Trust Fund under Savings Goal Group.
I just paid $500 from it to pay something - "Fit up" expense - now do I create a category named "Fit up" and apply the monies spent on that OR do I initiate the expense from the real world account and use the Trust Fund as the category creating and "activity" in the budget?
My Idea is to NOT touch these funds in the budget of course unless I really need to like I needed to today :(
I've got the same issue, trying to figure out how to save money in YNAB.
Logically, it seems like the software should handle it like it does credit cards, except in reality, the funds get all mixed in with bill money, and it can be moved around to cover overspending without concern to where the funds are, which can lead to overdrafts.
Additionally, as I learned this month, YNAB does some fancy magic with categories that have money just sitting in them, but then if you move a little to cover overspending, the next month it drains off a little more, then the month after that it drains off more, until finally after a few months the savings bucket is empty. I'm not sure what that feature is for, but its weird.
If savings was handled like credit cards, it would be completely off limits in terms of moving money around within the budget. The only way around that, (say if you needed to pay a bill), would be to manually create a transfer between accounts to mimick the real world. I'm not sure how people save money in their checking accounts, it seems simple in theory, but I've got two problems with it, in that if anything ever happened to your checking account, it'd goof up your savings, and it makes it way to easy to steal from savings to cover bills.
Wish list... Add a "Savings" feature to YNAB.
Silver Inspector said:
Not having a savings feature in YNAB still seems like an oversight
Completely wrong. Every single category is savings. Savings is merely delayed spending.
Budget money to a category and it's saved. Want more interest? Move it to a higher rate account. Read this repeatedly until you realize location and purpose are separate concepts:
And discussion of why things are recommended should not be viewed as religion. Religion is saying do X without explaining why (other than "take it on faith").
Thank you for that first sentence.
Also, made me look it up - Britannica has my favorite definition of religion, with "human beings' relation to that which..." matching the noun characteristic of the word.
But, Dictionary.com and Merriam-Webster both have good, concise definitions as well. Oxford's definition (the default Google one) is a bit lacking in understanding or at the least, not very inclusive.
esther michiel said:
In the previous YNAB your saving accounts didn't affect your budget, which made it a lot easier for me to 'save' money.
That sounds good. How did that work? Until you mentioned that, I was thinking that the current method was made up because the software was unfinished. When setting up accounts, its got "Savings" as a type of account, but it doesn't do anything like one might expect the savings to do. By contrast, when setting up a credit card account, that account behaves like a credit card. It seems like the "savings"account could do the same thing except flip flopping the positive and negative. In theory it should be able to handle the interest as well.
I tried setting up a lazy way category for savings as YNAB suggests, (just another category within the budget that gets fed from checking or wherever), but its behaving strangely and its not carrying the positive "Available" amount in the green oval, over to the next month, and then by the 3rd month its gone completely. Support is helping me try to figure it out.
I'm not complaining or criticising the YNAB method or software, I'm just trying to get a grasp on it and the savings thing is kicking my butt. I'm thinking about just taking the savings accounts out of the budget completely and just send money to them like I'm paying a bill. That's how Jesse suggests doing cash, instead of having a cash account, so I imagine it would work for savings as well. And then, when I'm ready to spend savings on something I'm saving for, I could just bring it into the budget like any other income.
Your exact wording:
Move Light Sound Life said:
YNAB is a methodology. If you're doing something different, you're not only not in line with the methodology, you're also not maximizing its benefits. That's not a judgement call on a person's worth, but an evaluation of their approximation to the method.
I didn't say your exact wording precisely, but you do imply if you're not doing it this one way you're doing it wrong. I don't think that's helpful when it's a style choice rather than, say, going against the 4 rules as a way of budgeting.
I really don't understand why it matters so much that some people prefer to do YNAB their own way if it's helping them achieve their goals
To address this specific point.. because someone else thinks a different approach is better -- usually because they have tried it both ways and have made an educated comparison based on their own scenario that seems similar. Usually that someone else doesn't know if the first person even knows about or understands that second approach, so they tell them about it. Hopefully also explaining WHY they think it's better so the first person can then make an informed decision.
So, if you do it your way, how do you decide what to move into a savings account to earn higher yields?
I move as much as possible to keep my checking acct from going in the red. Some people keep everything in their checking account they will need for a whole month. I can't do that, it's just too much. From 2016-2018 I had no cash savings except for my property taxes account, so everything went in and out of my checking account. Now I have some cash, but it's like 50-50% long term and short term savings. And when I say short term, I mean monthly. So that money is coming in and out of savings constantly. I schedule everything in my checking acct and watch for red numbers. Then I make a plan for scheduling a transfer and lock it in when I'm ready.
I have 2 checking accounts and 3 savings-type accounts (not counting my HSA which is on budget), and I have all kind of crazy stuff going on between them, but trying to make any sort of decision about what category is in which account would be bonkers.
On Feb 1 after I pay my mortgage I'm gonna have $398.03 in my checking account. So then I gotta haul in cash from 2 savings accounts to cover two property tax bills. On 2/3 I'll have $13,678.03 in checking, and on 2/5 after paying another visa bill, $118.37 until payday on 2/7. I like to live on the edge, but I can afford to keep an eye on things. People who don't have the time would do better to keep all the month's expenses at the ready in checking for the month.
You got time, just keep thinking about it. You're still a YNAB newbie :).
I asked some more specific questions to try to understand how totally decoupling accounts and categories would work, so if you can scroll up and answer those maybe you can convince me your way is better. Because to me it seems more complicated,
What seems complicated? If my Kitchen Remodel category has a balance of $22K in it, then I have $22K to spend on a Kitchen Remodel. It's highly unlikely that I'm going to pay that in a lump sum so I have plenty of time to transfer from an online savings account to the checking account that my payments go out of. Same with credit card payments. If I put a cruise on my credit card today, the statement closes on Feb 2 and payment isn't due until Feb 27, more than enough time to get money out of a savings account.
For non budgetary reasons, I have 2 checking accounts that payments come out of. Checking Account #1 is there because it's the bank account I've had since I was 18 and it's the account I had when I bought my place 12 years ago so it's all set up for my mortgage and I'm too lazy to get rid of it. Checking Account #2 exists because #1 has a stupid bill pay interface and I wanted something easier to use. Account #1 has $X in it on the first of the month since about 4 years ago. Account #2 has $Y on the first where Y is all the credit card payments that need to go out in the next month plus a cushion. Everything else goes to my online savings account on my paydays (2x month). Now for example, I know that I'll be making my 2019 IRA contribution at the end of Feb/beginning of March (have to wait until I have my MAGI from my taxes because it impacts how much for my Roth and how much for my TIRA), so I'll actually let extra build up in Account #1 between now and then so that the $6K plus $X is available by March 1. But if I forgot to hold back money in the checking account, all I have to do is remember to send $6K from savings to checking by April 1 to give me cushion of when it clears in time to make the contribution by April 15.
Well for those who were urging me to try to de-couple my accounts from my budget categories, I dove right in so we'll see how it goes. I moved all my personal money into one savings account and combined the two categories for buffer and E-fund, so now the balance in my savings has no correlation to my budget at all, it's just ~>$2k so I can cover my bills in case of debit fraud. I don't really need a buffer like the traditional YNAB kind, since I'm paid my whole month salary at the end of the month, but I was trying to make a goal to save up one month's buffer bc I still have an attachment to the "live on last month's income" old YNAB rule from back when I first did YNAB in 2011. I never reached buffer zen back then, so I wanted to have one now.
Thanks for your patience, ya'll. Hopefully I like this better in the long run, once I'm used to it. LOL, if I do, then this reminds me of when I was a kid and I wouldn't let my parents take off my training wheels on my bike bc I was a fraidy cat. So my dad took them off without telling me and I didn't even notice!
On the other hand, this really means I need to stick with my YNAB budget, which I intend to do but this means I really have to. I think this is probably the fear in a lot of newbies. They are worried they won't stick with it, or that having the money in the same account will tempt them to spend it. But with the app on my phone and the easy synching with my bank, I don't see why I wouldn't stick with it. I really enjoy YNABing, it's a fun nerd activity.