Savings & Ynab

Hi Ynab community!

I'm a relatively new Ynab user (3 months) and have been struggling with how to deal with pre-existing savings.

Let's say I have $100,000 in existing savings that I have yet to add into ynab, what would be the best way to add this into my budget and continue to add to?

I assume if I add it as a new account, it will simply be added to my "to be budgeted" amount. What would be the next step though?

Apologies if this is a little vague, just not super sure how to phrase the issue.

If anyone can assist, it would be greatly appreciated, or if you need any further info, please let me know.

Thanks!

5replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • What are your intentions for this money? Make categories and allocate various purposes. Income replacement? House down payment? Whatever.

    I also suggest that you structure your budget so you can push all your income into next month's area. YNAB becomes much simpler when you can budget on a calendar basis.

    Like 1
  • A bit of context, I'm a freelance graphic designer and the money mentioned earlier is realistically money that currently sits in the business account at the moment. This money is yet to be taxed (will be done at the end of the financial year).

    This money is where I draw my monthly income from (~$10,000 at the start of each month), which then funds the budget for the month.

    Due to this, I have been reluctant to include it in my budget. Do you think it is just easier to keep it separate?

    Like
      • Green Yeti
      • Green_Yeti.5
      • 1 mth ago
      • 2
      • Reported - view

      Turquoise Mare Hi! I'm an accountant by trade and our boilerplate advice for small business owners is to always keep business and personal finances separate. Try not to muddy the waters by thinking of the $100k as your own personal savings. The only money you should be budgeting into your personal finances is the $10k monthly distribution. You didn't mention business structure (I'm assuming sole prop/single-member LLC) or if the $100k was profit or gross revenue, but you should also be considering setting money aside for estimated tax payments prior to funding your personal budget for the month.

      Hope this helps and happy budgeting!

      Like 2
    • Green Yeti  Thanks for the reply!

      The business is currently set up as a family partnership, and the money is gross profit, so will be taxed at the end of the year.

      What you mention makes the most sense to me and is in line with my original thinking, the only difference is now I have set up a savings account and set aside a rough estimate of funds to cover tax.

      Thanks for your help!

      Like
  • Best practice is to also set up an entirely separate budget for the 100K as well. You’llprobably still need dedicated software for invoicing, etc. but YNAB can do at least some of the management of business capital, such as ensuring you’ve set aside enough for taxes.  The 10K owners’ draw will be a straight outflow from the business budget and a straight inflow to the personal budget, as though it is a regular transaction in both. 

    Like 2
Like Follow
  • Status Answered
  • 1 mth agoLast active
  • 5Replies
  • 74Views
  • 4 Following