Excluding expenses for big projects that don't represent regular spending habits

The critical function that YNAB provides is the ability to manage a relatively stable inflow/outflow pattern on a monthly basis.  At least that's what we want.  We ran into a point of confusion when we started a renovation project.

Here's what happened.

1. We refinanced and took out cash.  This reduced our home equity, increased our cash, and the only aspect of the transaction that was recorded as an expense was the cost of refinancing, which was rolled into the mortgage as a liability.

2. We put the refinanced funds into an account and added that account as a tracked account in YNAB.  I think that is where we made the mistake, but I'm not sure.

3. We have regular income and regular expenses that are critical to our financial success.  Being able to report on just that activity is important.

What we've found is that any transaction that is spent on the renovation which comes out of the account that holds those funds appears as an expense for that month, which skews the reporting for our regular income and spending patterns.

QUESTIONS:

1. Is there a way to do what we did, but exclude transactions from this account from the regular reporting?

2. Is there a better way to track this type of scenario?

3. If I remove the budget category that I placed the renovation funds into and remove the account from tracked accounts, will there be any adverse effects on our current records in YNAB?

Thanks!

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  • SmashCrashBoing said:
    the budget category that I placed the renovation funds into and remove the account from tracked accounts,

     If your money is truly in a tracking account, then it can't also be in a budget category. 

    If you want to plan with that money, you'll want it on budget. If you're going to spend from any on-budget accounts for this renovation project, you need that money on budget. You can filter that category out on reports.

    What's the point of excluding the renovation from the budget? Why sequester the money in an account instead of a category, anyways? 

    Categories are how you define the purpose of money in YNAB. 

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    • When we did a similar thing, we inflowed to RTA, with a distinct payee.

      That money was sequestered in a category for the renovation. We look at that category balance to make decisions. 

      YNAB's budget isn't just your monthly plan. Having a normalized month helps in terms of allocation decisions, but on the spending side, there is no normal month. 

      If you had saved up the money instead of taking on new debt, that would have all been in the budget. 

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    • Move Light Sound Life It's not a tracking account.  It is in fact a budget account.  I mixed up the terminology.  

      "Why sequester...?"

      Not sure what you mean by this.  The money landed in an account separate from our primary checking because it has a higher yield and because we did it before YNAB was on our radar.  It's also to clearly document expenses related only to the renovation.  We understand the category functions in YNAB.  What we didn't know is that we can exclude expenses from this category from the income/expense report.

      Problem solved.

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      • Yes I can
      • yesican2020
      • 1 mth ago
      • Reported - view

        SmashCrashBoing  Excellent.  I was just reading through the thread to suggest the same thing in terms of excluding it from your reporting. 

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    • SmashCrashBoing It seems like your problem is solved, but to answer this: 

       

      SmashCrashBoing said:
      "Why sequester...?"
      Not sure what you mean by this.

       A lot of people come on here trying to budget by accounts instead of categories, and they typically try to do gymnastics to make categories and accounts (on budget) sync up. Or, they'll use tracking accounts to make that gymnastics easier, but of course that skews reports and renders the budget useless for planning whatever saving/spending is off budget.

      I asked the question to see where you were on the topic, before I wrote out an answer to all possibilities.  Now I don't have to!

      If you want more info on any of those concepts, I'm sure people on here will step in if you ask. 

      Like 1
  • When you view your Income v expense report, you can use the drop down option (top left hand side of the screen) to exclude certain categories from the display. I tried to post a small image to demonstrate how to do this but it was blocked. I prefer to do this because all the money spent on such projects is money which I have saved for the purpose so no loans/repayment is involved.  I do prefer the regular reporting to reflect day to day expenses so I can better monitor my essential outgoings (to see how much I really need when I retire).

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