Teacher Summer Pay

I am a public school teacher and get paid 10 months of the year.  When I started using YNAB years ago, the county was pulling money out of my paycheck monthly to cover the other two months.  Two years ago, the county stopped doing this.  The first year that they stopped, I tried to save the money in my budget myself.  Let’s just say that I am not as dedicated as some YNABers are and I did not have enough money saved when the summer months of no paycheck came (also didn’t help that my husband was surprisingly unemployed that summer).  We survived but decided we needed a new plan the next school year that would keep the money where we couldn’t touch it until those summer months.  Our bank has a “teacher summer pay” account.  They automatically move the needed money from my paycheck monthly to the account and then pay it out during summer months (the move it from an untouchable savings account to my checking account).  This worked much better this summer.  The problem and the reason why I am posting is that I cannot figure out how to do this correctly in YNAB.  I made it a tracking account but it still asks me for a budget category.  Since I can’t spend that money in my monthly budget, I don’t want it in my budget at all (because then I think I have more money to spend monthly than I really do have).  The money is deposited into my regular savings by the school system, then my bank moves a portion of it to the teacher summer pay account. So I somehow need to show in YNAB that the money has been moved.   Then I need to show in the summer months that the money in the summer pay account is my income those months only.  Help!  Thanks!

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  • I would personally do one of two things. Either I wouldn't have it as an account at all, not even off budget, and just treat the transfers into my checking account like paychecks out straight to TBB. If you're not tracking all your net worth, and you don't ever look at that account, this might reflect reality best. 

    You could even do this with the off-budget still showing and having the category be TBB. 

    The other option I would consider is having a category called "Summer Pay" or something that is a pass-through category, so the transfer would be categorized as Summer Pay, and then you could transfer those funds to TBB to be allocated out. 

     

    I think ultimately I would personally choose option 2, but the other ways might work better for your goals. 

    Like 1
    • Aritavashkai I tried option 2 this past school year and it was just a hassle to have to do the transactions with the summer pay category every month.  I was hoping there would be a way to not have to do that step monthly.

      I am thinking that option 1 may be best.  Thanks for your response.

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    • WordTenor
    • Can we agree that goals are dumb and immature? Sure.
    • WordTenor
    • 3 yrs ago
    • 1
    • Reported - view

    If it is going through an on budget account, you have to account for it in the budget. So you’d deposit it into your account with the rest of your paycheck, budget the amount for the summer account in a “summer account” category, then use that category when you remove the money to the tracking account. 

    ...which should prompt you to kind of go “huh. If I have to put it into a category, why move it to an account?” And you would be right. The “no training wheels” version is to just budget the money to the summer pay category when you get it. And then don’t move it. When you need it, it will be there, waiting to do its job. 

    Like 1
    • WordTenor thank you for your reply.  That is what I tried the first year that the county did not pull the money for me.  Honestly my husband and I are just not that disciplined.  We would look at the money and when a crisis happened (my husband losing his job), we said “well it’s April and we need that money now to pay bills.  Hopefully I will have another job by summertime.”   Because the first YNAB rule is to pay your bills with what you have at the time.  Honestly I was very grateful that we had been doing YNAB for a few years at that point because we did have some money saved and we were at least able to make decisions to use the summer pay money in April.   But the bottom line is that I really want the summer pay locked up so that we can’t touch it.  

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 3 yrs ago
      • 1
      • Reported - view

      Orange Welder If you don't have enough money to pay the bills in April, then how would keeping the money in a second account magically enable there to be money to pay the bills in April? 

      I suspect the answer is, "We are able to rein in the rest of our spending because the account balance being $0 is meaningful to us, but our category balances being $0 are not." 

      If you spend beyond what's in your spending categories and dip into your savings categories, then you have to reckon with the results. It's no different than spending beyond what's in your account balances, except that you don't get a nasty slap on the wrist from the bank in the form of an overdraft fee. I don't mean that in a mean way--I was the queen of budget by account before I found YNAB. I had seven savings accounts and four checking accounts and I had this whole hoopla of transfer here, transfer there, transfer transfer everywhere because I was great at respecting the idea that I had to keep my spending within the confines of what was in one particular account. Learning to respect a category balance in the same way you respect an account balance is definitely a skill, but it's one which pays dividends in...well, it pays actual dividends. Recognize that the two are no different. If you're able to refrain from transferring money out of a savings account because that feels like a line you just can't cross, draw the line in a different place. "I can't pull money from this category. We have to make it work with the money in these other categories." It's the exact same thing. 

      Like 1
    • WordTenor while I totally “get that,” it’s just not what works for my husband and I in this scenario.   Would we have made a different decision in that April of crisis if we couldn’t touch the money?  I don’t know.  We did what worked at the time.  Do I want to have this money “locked up” by my bank until we need it in the summer? Yes.  I didn’t post on here asking for how to do YNAB better and I am an experienced user.   I just needed to know how to show (or not show) this “income” in YNAB easily.  

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 3 yrs ago
      • 1
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      Orange Welder Part 1 still applies. If the money hits an on-budget account, you have to account for it in the budget. There's not a real way around that. The way to eliminate the double work of accounting for the money being deposited and then transferred back is to not transfer the money and use the categories to guide your spending. Those are the two options for the setup you've described. 

      You can also work around the budget entirely by having the money go straight from your paycheck to the extra account. To me, having to make a real-world change to how my money was deposited vs. just changing how I interact with my budget is the more onerous option, but perhaps it isn't for you. So that's option number three. Option number 2 is the one which, after much consternation and work, I've found to be most efficient, and many experienced YNABers would say they feel the same. But options 1 or 3 might be the best fit for you right now. 

      Like 1
      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 3 yrs ago
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      • Reported - view

      WordTenor Ultimately the issue that Orange Welder suffered from in April was not having an adequate emergency fund to handle loss of income, so they used the money intended for the summer as income replacement. And of course when one loses income and doesn't have a replacement for it, something has to give, as you have pointed out. There's nothing wrong with that, but there will be consequences.

      Like 1
      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 3 yrs ago
      • Reported - view

      nolesrule Exactly. That’s why I was pointing out that thinking this is a matter of having the money separate or not isn’t the answer. If the money is needed, it’s needed no matter where it is kept (and there’s no shame in that). But if having it in a different account would help, then something else is happening and thinking differently about the category boundary would create a more streamlined budget *and* solve the problem. 

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  • Orange Welder, if you have a recurring transaction for your paycheck, could you build the transfer into the splits?

    I have done a similar thing for my husband's Flex Spending Account deposit each paycheck. The main inflow number is the net deposited to our checking account (does not include the FSA amount), his gross pay is categorized as Inflow:TBB (this includes the checking deposit and the FSA deposit), his FSA deposit is an outflow with a payee of "Transfer: FSA Tracking"  and a category of "FSA Funding". The "FSA Tracking" account is a YNAB tracking account. 

    If you use downloaded transactions instead of manual entry like me, I don't know how to set that up, but the concept would be the same, I think.

    I can post a screenshot of the transaction if my description doesn't make sense.

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    • Pezimaniac that makes a lot of sense!  Thanks!

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  • Orange Welder

    I know you mentioned trying the "Summer Pay" category, but have you tried the category without including a Tracking account? I'm wondering if it would help if you didn't see that account in your budget at all. When you transfer the funds, you'd just categorize them as Summer Pay and view them as "Spent" instead of transferred. Then, come summer, the inflow hits your Checking account and you categorize it as Inflow: To Be Budgeted like any other paycheck.

    There isn't a way to exclude that income once it hits your budget. We suggest Savings be included in your budget, but if that absolutely doesn't work for you, removing it completely would prevent the juggling of those transfers. :)

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    • nolesrule
    • Stealing From the Future fix is an improvement but is incomplete....
    • nolesrule
    • 3 yrs ago
    • 1
    • Reported - view
    • nolesrule Good catch - thanks for pointing that out!

      The funds could be categorized back to the Summer Pay category to prevent that, then moved to other categories for budgeting. It's a clunky workaround but would allow the funds to be removed from the budget until they're wanted.

      Like 1
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