Saving for a goal and then spending
Hi! I'm just getting starting with YNAB and really loving it so far. Everything seems to be "clicking" with me which hasn't happened when I've tried budgeting before. So thank you for that!
One question so far - I have a category for "Gifts for Birthdays" where I'm putting say $50.00/month to use for presents/cards for family and friends throughout the year. I have a friend's bday coming up and I'm getting her a card and a little gift. Does the 'spending money' transaction come out of that saving category? Or do I create a different category for the actual gifts and move the budgeted amount over to that?
And does the same strategy apply to similar 'savings to eventually spend' categories? Like my Car Insurance that I'm saving up for when it's due next year? Or vacations, etc?
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Yes it will directly come out of that category, no need for an additional one. You could do a test transaction to see where the money comes out as well 馃槉 Savings categories behave the same as spending ones. The goals are the only things that react differently
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Emma Catherine Thanks! That is kind of what I was thinking but I've seen some articles on the Wish Farm idea and people saying they moved from the wish farm budget to another category once the wish was fulfilled. I just wasn't sure if my "gifts" category should work the same. I guess its really whatever works for you, huh?
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Gabby G That's a good thing to bring up actaully! So the wish farm wishes are purely wants. Whereas the gifts are "true expenses" ie things that will happen inevitably, so you create a category for it and budget throughout the year. And then when the holidays pass, you still need that category for the next year. Whereas wishes are like a new kitchen table; you don't neeeed a new table because you have a perfectly good one, but you want one eventually because it doesn't match your chairs or something like that. So you move the new table from your "wishes" group to the "wish farm" group, then start adding money when you can. And then when you actually buy it, you move the money from the table budget to say "furniture" or "home improvement", some category that will always be there. And then you delete the table category. I hope that helps distinguish the difference between true expenses (which I didn't really understand until recently) and wishes 馃槉
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Emma Catherine Yes actually that's a great help with the difference between wishes and true expenses!! I guess something like Travel could fit into either group. A trip that you have to take (work, family, medical) would fall under a true expense but a dream vacation could be in the wish farm to build up to.
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Gabby G Yeah I haven't found where I like to keep vacation yet lol. There's also no vacation in my near future so that's not a problem haha
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It comes out of that category! Think of it like an envelope that you are putting money into and then spending money out of. You got it!
Also, when you feel like you have that down, take a look at the YNAB videos around setting different types of goals. This can help you down the line learn to budget inside of those categories. There is one type of goal for if you want to contribute $50 a month to that categorey. There is a different type of goal if you want that category to always sit at $150 or above. After mastering level one of YNAB we started diving into the goals for more awesomeness!
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Wiecked Thanks! I actually used to squirrel money away in envelopes when I was a teenager for different goals. That's the closest I got to budgeting for a long time.
There's a ton of YNAB info and videos and articles - it's a rabbit hole I'm happily falling down!
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Gabby G Welcome to YNAB! I'm so glad to hear that things are going well. If you have any other questions, just let us know!
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Gabby G yay! you are killing it!
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