Mutual Funds & Offer vs Bid price

Hi, I'm a long time YNABer and it truly has given my family a very comfortable financial position.

I have something new I'd like to do in YNAB and I'm hoping someone can help advise on the best way to do this.

Till now, my accounts have been pretty standard; put money in, take money out, get (small) interest and assign that to a category.

My emergency fund has been in a mutual fund that I do not have in YNAB, since that money is not used in the budget. However, I now want to put most of my New Car category into the mutual fund since it's medium term returns are pretty good. This would mean adding that mutual fund to the budget. When I do this, to protect the current balance, I would just put it into a category called Emergency Fund and hide it in the budget.

The issue is, this particular mutual fund is not like a savings account, it is more like an investment. Details on the difference is at the end of this post, for those that are interested.

How do I handle the variation in the investment value? Any gains or losses should impact these two categories only. Dividends/interest should also be allocated to these two categories, though I guess it could be allocated anywhere, since this will be an on-budget account.

Details of this particular mutual fund:

When you put money in, or invest, you buy "units" at the current offer price. However, the moment you do that, your available balance is based on the number of units owned and the current bid price, which is always slightly less than the offer price. See "Fund Preview" about 1/2 down this page:

Even though this seems like a disadvantage, the price of the units fluctuates, generally upwards, and in addition the fund gets dividends twice annually in the form of more units. The overall result is usually much better returns than any local bank.

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  • Adjust the account balance once a month based on the current market value. Any dividends or interest should be added as transactions too. To make the monthly balance adjustment, right-click on the account on the left side and change the balance. This will add an adjustment transaction. Call it Market Changes or whatever you want.

    It’s up to you to only let market changes affect these two categories. Any changes will affect your To be Budgeted. Add surpluses or subtract losses to/from these categories.

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  • Thanks, I'll try that.

  • I'll also have to adjust the balance right after making the initial transfer. Since I'll transfer out (for example) $100, but the balance will only increase by $95 in the investment account.

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