Immediately Categorize Inflows or To-Be-Budget it?

Good afternoon, friends! I would love your opinion on the following. My wife is enrolled in a Master's program and I am using a dedicated YNAB category to budget having her tuition in place well ahead of time, and help me know when I am done as soon as possible. As I was looking at the balance in that dedicated account, versus what is budgeted for it so far, I got a little sideway (and figured that out), but what led me to ask a question was the following:

After recently refinancing our mortgage, we received an escrow refund of $1,990.43. Since this was an unplanned windfall (as the Master's was an unplanned outlay), I mentally dog-eared that money to go directly to the Masters's savings account.  When it showed up in my importable transactions as Inflow, I immediately categorized it to the USM:Tuition category instead of leaving it as  Inflow:To be Budgeted. Was that ultimately a mistake, meaning I should have simply left it as Inflow:TBB and instead added the 1,990.43 amount by entering it in the Budgeted column in the budget?

The reason it came to my attention is because I noticed it in the "Activity column", where typically I only see expenses...Thanks!

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  • Yes, most income should flow through TBB. The only time I categorize directly is for refunds.

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  • Do you need the separate savings account for the Master's tuition? The money is already set aside by the category in YNAB. You may want to put it in a savings account for the interests but it doesn't have to be a single-purpose account. 

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  • As Superbone mentioned, it should go through TBB. Mainly because otherwise the reports will be messed up.  If you do the report as you have it, it will show a negative expense for the tuition. Run it through TBB and then budget it. Especially since it will not be spent right away. See my university category group below.  If the inflow were to go right to the tuition, it would look like the tuition cost less than it really did. 


    That said, since this was effectively a refund of the escrow amount, I probably would direct categorize it to the escrow expense category and then move the available to the tuition. This would ensure the escrow is not overstated in the reports. Depends on whether you expense the escrow as it happens or if you manage it like a savings account.

  • Fantastic, thank you Ceeses , MXMOM and Superbone for your responses. Very helpful, I will go back and adjust that entry. Ceeses , negative, I don't really need a separate account. I just so happened to have it and as long as there is a balance of more than 150 a month, there is no fee, and ultimately so I thought it would be handy to have it in its own separate and dedicated envelope. Just a silly mental game I appear to be playing with myself. That said, I historically run an "allowance", "bills" and "savings" account structure, but my journey thus far with YNAB is helping me maybe understand that I don't need all of that. 

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