How do you plan your invested money for future budgets?
My situation: I'm keeping money for 3 thing in a distant future. I invest all that money. How to keep track of the amount I have for each of these 3 things while using tracking accounts to know that I don't have that money available at the moment?
Hi Igorzovisk !
If you add those investment accounts in YNAB as Tracking accounts, you'll be able to keep track of their balances, but those balances won't be included in your budget. We suggest Tracking accounts for Investment accounts because this allows you to keep an eye on those balances, without budgeting those funds.
Here are the steps to set up that Tracking account:
1. Select to Add Account
2. You can skip the Direct Import screen, and select Investment Account (under Tracking) as the Account Type.
3. Afterwards, create an Investments category (this will be used when you transfer funds from your Checking or Savings to the Investment account).
Give that a try and let me know if you still have questions!
Hey Igorzovisk I had a similar issue. I understand the purpose of budgeting just for checking/savings/credit cards but I keep my long-term goals in an investment account. Volatile or not, I wanted to be able to track the purpose of these funds within YNAB. I do the following to make it work. It's not perfect, and requires some maintenance, but I'm happy with the results.
1) Create a grouping titled "Goals: Future". Under this group I have a category called "Offset: Investment Balance." I also have categories for each of the items I am saving within my investment accounts for.
2) After categorizing all of my regular expenses and updating all of the tracking accounts, I add up my investment account totals and enter the balance as a negative amount in the "Offset:Investment Balance" category. If the "Goals:Future" grouping does not net to $0 then I update the items I'm saving for accordingly.
4) Next month, the totals at the top will show that there is an overspent amount from the prior month. This overspent amount should match your investment account balance. Enter your investment account balance into the "Offset: Investment Balance" category as a negative amount and the "to be budgeted" total at the top should now be accurate.
P.S. I only started doing this in YNAB once my Age of Money increased to 60+ and I felt stable. I think with a lower Age of Money, it's better to work with just your checking, savings, & credit card totals so you are clear that you are only spending what you have. With a longer Age of Money, my month-to-month spending is a little more flexible.
I don't know if there are any long term consequences in YNAB for using this method, but it is portable and easy for me to see how I'm doing in the long term. I would love if YNAB would add a module that allows the allocation of the tracking accounts but until then, this is what I plan to do.
This is kinda here nor there, but I've had one investment account on-budget for a year and a half now. When my Ally Savings account is built up to a certain limit, I shift funds to an on-budget Schwab Intelligent portfolio of their most conservative option. It generates monthly income. I send that income to next month. I never adjust the balance of the account other than the dividends it accrues.
This was working well for almost a year, as the actual balance in the account was always comfortably higher than the YNAB amount. And then late March '20... I never thought I'd see it, but the actual value of the account went considerably below the balance in YNAB. All gains, including earned income, vanished and then some.
I knew this was a risk from the start, and I did not want to pretend like those losses didn't exist, so I did balance adjustments each month and made up the difference from my never touched "Emergency Fund." As the balance crept back up each month, I replaced the money in the EF until it was back to what it was, and returned the YNAB balance to the principal plus dividend income earned. Thankfully, it only took a few months.
I'm not sure if there's a lesson here, but I took the risk, unfortunately experienced the exact scenario that would have been the 10% chance in a monte carlo simulation, and faced reality and rolled with those punches. If it had continued to drop I would have had to put a "stop loss" on the Income Replacement/EF category and started taking from some lower priorities. *Whew* 🤞