Issues with Savings Account Consistently Matching Savings Category

Greetings fellow YNABers!

I've noticed it to be a HUGE issue for me to keep my savings category in sync with my "Savings Account". I have an automatic transfer for a given dollar amount to be transferred to it each paycheck from my main account. YNAB reads this correctly as a transfer between those accounts but of course that then throws off my savings category since I can't categorize transfers between accounts.

 

How do you manage your savings account/categories? Do you experience similar issues? Am I failing to understand how savings accounts work within YNAB so it can gain (what little) interest the bank provides?

 

Edit:

Should I just hide the account since it has my starting balance still there? Should I delete the balance and category entirely?

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  • The first thing to remember is that in YNAB, money is saved by budgeting it to a category and then not spending from the category.

    There is no reason for an account to match a category, because accounts don't define the purpose of your money. You'll find YNAB is a lot easier when you just stop trying to keep them in sync, but rather keep what you need in checking based on your upcoming cashflow needs and put the rest in savings.

    Read this:

    The Relationship Between Your Budget & Your Accounts: It’s Complicated

    Like 3
  • Additionally, you might be better off  not with some generic "Savings" category, but figuring out what that money is for and assigning it to appropriately named categories.

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    • Matt C
    • Age of the Geek baby
    • Powder_Blue_Cleric.2
    • 1 yr ago
    • Reported - view

    Thanks for the reply and link. I'll take a look at it in a minute. The savings account and category do have the purpose of being emergency cash savings, I just didn't specify it since I didn't think the type of savings was relevant to the issue.

     

    I'm not sure I understand your last sentence in your first post. To me a separate account, that is a savings account as defined by the bank, is indeed a label/category since it gives it a purpose in my head. I do save for other items such as items for baby #2, a new laptop, flight lessons, etc via the checking account but those items are spent rather quickly compared to the emergency fund which does at least have a slight amount of interest gained.

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      • jenmas
      • jenmas
      • 1 yr ago
      • 2
      • Reported - view

      Matt C based on my historical spending patterns, I keep $X in my checking account. Everything else goes to a high yield savings account. For example, I looked at my checking account today and realized that I had $1300 + $X in my account so I initiated a transfer. However, if I knew that I was going to buy a new laptop next week because I had fully funded a category for it, I would not have bothered to transfer the $1300 knowing that I would have to pay a credit card bill shortly. That's what @nolesrule means by cashflowing your expenses. I have 60+ categories. I also have 3 checking and 3 savings accounts. None of my account balances matches the balance of any category or group of categories. I have a 6 month income replacement fund and as far as I am concerned, it lives in any and all of my accounts.

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    • Matt C
    • Age of the Geek baby
    • Powder_Blue_Cleric.2
    • 1 yr ago
    • Reported - view

    Guess I should have read through the article a bit to understand a bit about the mentality with transfers. If I'm understanding this correctly, since I prefer the money in a "bank savings account", I can simply delete the category of Emergency Savings because the money doesn't truly touch my budget for spending. Upon needing it for major car repairs, or some major randomly life event, I can transfer it to the checking account then categorize it as needed from there.

    Am I thinking a bit more clearly about this now?

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      • jenmas
      • jenmas
      • 1 yr ago
      • 1
      • Reported - view

      Matt C No. Budget for car repairs. Budget for a broken dishwasher. But don't waste your time trying to match a category balance to a bank balance. As long as all of your categories are green and all your account balances are accurate, then you have the money saved somewhere and it only matters where on the day that you pay a bill. Money is saved as soon as you allocate it to a category, not when you transfer it to your savings account.

      Like 1
      • Matt C
      • Age of the Geek baby
      • Powder_Blue_Cleric.2
      • 1 yr ago
      • Reported - view

      jenma  So maybe I'm having a hard time accepting/shifting-to a mentality change from a generic emergency savings that can be used for any major reason that requires a $4k+ charge all at once, to a category spending one. You can't possibly plan for any and all emergencies that pop up in life so why not keep the emergency savings generic?

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      • jenmas
      • jenmas
      • 1 yr ago
      • 2
      • Reported - view

      Matt C I find that there are very few things in life that really are unexpected - cars need to be repaired. Washing machines start making weird noises. Layoffs happen. The human body is subject to injury and illness.

      I don't have an emergency fund. I have a 6-month income replacement category (a little closer to 6 months expenditures than income if I'm being honest), a car repair category at several thousand (car is paid for and I'm saving for the replacement vehicle I anticipate buying in 2028-2030), a home repair category at several thousand (I would keep it higher but I just replaced the HVAC - I started saving about 18 months in advance of when I wanted to replace it; and kitchen appliance replacement is covered in my kitchen remodel category and since I live in a condo, I don't have to worry about roof - though if I owned a home, I would start saving for roof replacement 10 years before I anticipated needing it), I start each plan year with the Out of Pocket max for my health insurance fully funded plus whatever I have funded to my FSA. So if I'm driving home in a snow storm and get in a car accident resulting in broken femur and while I'm in the hospital a frozen pipe bursts, I'm good.

      If something outside of those categories happened, I would reallocate funds from other categories to top up the needed category.

      Like 2
      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 1 yr ago
      • 2
      • Reported - view

      Matt C There's nothing fundamentally wrong with having a budget category called something like "Contingencies" or "Unexpected Expenses."  But the amounts in those categories do not need to match the amounts in specific accounts, and it's simply a lot of busy work to try to make them do so.  Having the categories is liberating, because it tells me what I can spend money on without worrying about drawing down a savings account too far.

      Example:  I pay property taxes twice a year.  Each payment is a significant fraction of my normal total monthly budget; but I budget a flat amount per month to the Property Tax category, and spend from the category when the bill is due.  If there is not enough in checking to cover the property taxes when the bill comes due, I will transfer money from savings to checking.  The amount transferred does not necessarily match the amount of the property tax bill, it just needs to be enough so that all committed payment will clear from checking without issue.

      When I transfer money from savings to checking to cover a property tax bill, or a new car purchase, or any other infrequent, major expenditure, that has no impact on the amount in my Unexpected Expenses category.  The Unexpected Expenses category will only be reduced if I need to use it for something I didn't expect.  Hence, the category name.

      And if I have an unanticipated auto accident, and need to use $1000 from Unexpected Expenses to cover my deductible, that money may or may not need to be transferred from savings to checking.  It depends on how much is in checking when I need to pay the bill, and how much I need to cover all committed expenditures.

      Like 2
      • Matt C
      • Age of the Geek baby
      • Powder_Blue_Cleric.2
      • 1 yr ago
      • Reported - view

      jenmas Thanks for clearing up a lot of my confusion as to the planning technique. I think I understand what you are doing by transferring unspent money into the high-yield account then make the appropriate categorizations for various future items (washer, car replacement, etc). 

      Thank you again for responding and helping me understand how savings works for you!

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      • Matt C
      • Age of the Geek baby
      • Powder_Blue_Cleric.2
      • 1 yr ago
      • Reported - view

      Patzer I think this is basically what I was attempting to do but failing on the execution because when I first linked my savings account to YNAB it had entered the starting value and linked it to a category. I was expecting the category to be updated and not draw out of the to be budgeted funds but that obviously wasnt the case.

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