Savings Goals Category for Starting Balance

How do I categorize a starting balance in an unlinked account towards a savings goal in my budget?

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  • Starting Balance should show up in TBB (To Be Budgeted) up at the top of your budget.  Just click on the TBB button, and it will ask how much you want to move, and allows you to select the category to move it to.  Simply put the amount that you want into the Category that you'll be using for that particular savings goal.

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  • I see I was unclear. This account is a "tracking" account listed as an "asset". I am able to categorized transfers into those tracking accounts towards my savings goal, but not the starting balance. Note that the tracking account doesn't even have the category column.

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  • You can’t. The account must be a budget account to put it in the budget. 

    Keeping savings on budget is the smart and correct thing to do. You’ll want to digest this: https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

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  • I really do get that and have read it previously. The thing is, I already had $5000 in my Investment account and I had already given those dollars a job before I ever met YNAB. So when I setup my budget in YNAB, I had a savings goal for investment dollars of, say $12,000 by June. I was already half way there. But YNAB doesn't show that progress unless I can categorize my starting balance of $6000 in the same way I can categorize any outflows from my main checking account towards that savings goal. It wouldn't do to claim my savings goal is only $6000 by June. How can I accommodate this reality?

    P.S. The answer to "maybe I don't need those other accounts" is, "Yes I do because those funds are earning a better rate of return," albeit at a higher risk than I'm willing to keep all my money at.

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      • MadDog
      • Navy_Blue_Pegasus.2
      • 3 mths ago
      • 2
      • Reported - view

      TamaleLlama Because the investment account is not linked, you will not be able to "see" that money in your budget and savings category goals. If your goal is to have $12000 total and you already have $6000, then set the goal in YNAB for $6000 to save the remaining amount. You can then move that money into the tracked account. 

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  • What is ironic is that if I create my Investment account as a regular savings account, I CAN categorize the starting balance, but I CAN'T categorize the transfer between the main checking and investment savings account.  Navy Blue Pegasus I find it unfortunate that I can't set a savings goal for the full amount and categorize what I've already saved OR give the savings goal a starting amount already contributed. It's dollars that "I've given a job to" but I'm not finding a way to track that reality.

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      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 3 mths ago
      • 3
      • Reported - view

      TamaleLlama What you are missing is that in YNAB the Savings amount for a particular category is the Available amount in the category balance. The Budgeted amount just represents what you have allocated in the current month for that purpose. When you send money out of the budget, it literally removes it from the category.

      So you can't accumulate in your budget what is being sent out of the budget. And you cannot represent in your budget what was never in your budget.

      You are right that to do what you want would require the investment account be part of your budget. Whether that is ideal or not is an entire other discussion.

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      • Ceeses
      • Ceeses
      • 3 mths ago
      • Reported - view

      TamaleLlama In that case, you create a category for the goal you want this $6,000 starting balance to go to. You budget those dollars to that category. Then you BUDGET every month to that category to reach the total goal of $12,000 of savings. Where the money lives is irrelevant to the fact whether you have reached your saving goal for that particular purpose or not.

      If you leave aside interests/dividends for a moment, I am sure you agree you could transfer the $6000 to your checking account and keep putting aside in the budget $1000 every month and keep it in your checking account and you would still have $12,000 waiting to be spent by August. Whether you are moving the money to account A or account B does not change the amount of money you have. Now in reality, you can get more interest/dividends in some accounts than others but over 6 months, this is a negligible amount and usually just an extra. Your goal is to save $12,000 for your purpose and to pocket some extra interest/dividend in the mean time for other purposes.

      In the scenario 2. you are listing, you forgot you need to BUDGET the money every month towards that same category you used for the starting balance. You want to put a monthly contribution towards that goal which means you need to budget monthly to this category.

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  • So, I'm interested in how someone else would handle having $6000 already saved towards a savings goal and tracking their total amount saved when there are subsequent outflows from another account.

    1. I've tried recording them as transfers to a tracking account, but am unable to categorize the starting balance for that account.
    2. I've tried recording them as transfers to a savings account, but am unable to categorize them at all except for the starting balance for that account.
    3. I've tried recording them as outflows from my main checking with a category for the savings goal and a manual transaction inflow in the savings account, but the net effect on the savings goal is zero.
    4. I've resisted a fictional savings goal of the amount actually remaining towards my goal (i.e. $6000 instead of $12,000). This would work until or unless I took more than $6000 out for a particular investment. The budget category would go negative with an $8000 investment when in reality there may have been $10,000 already in there.

    I'm open to ideas for my reality.

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      • jenmas
      • jenmas
      • 3 mths ago
      • 2
      • Reported - view

      TamaleLlama Slightly off topic - If the money is sitting in your checking account right now, why don't you transfer it to your investment account right now rather than waiting to save up more? Time in market is important.

      I don't know if this answers your question but here is what I did when I set up my YNAB:

      1. My investment account was set up as a tracking account that had money in it already. The starting balance was not budgeted anywhere because tracking accounts are not part of the budget.

      2. Every month I have an auto debit from my checking account to my investment account. So I created a category called Investments. Every month I allocate the amount of the auto debit to the category. Period. I never reallocate from this category.

      3. The auto debit is on the 30th and so I have a scheduled transaction set up in my checking account for the 30th for the amount that gets transferred. On the 30th it shows up as an expense in my budget.

      4.  Also I don't use Goals at all in YNAB. I use the Quick Budget to allocate amount spent last month every month. Also I know exactly how much it should be so I don't need a goal to tell me whether or not I've hit that number because I can see just by looking at the available balance.

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      • MadDog
      • Navy_Blue_Pegasus.2
      • 3 mths ago
      • Reported - view

      TamaleLlama There is a difference between on-budget and off-budget. The $6000 you have already saved is now considered off-budget because the account is a tracking one. Until the investment account is on-budget, you will never be able to see the total savings.

      Many of us have investment or retirement accounts outside of YNAB. And most of us handle it like jenmas explains. We figure out our long term goal, set up a recurring transaction to send that money to the tracking account and budget for that monthly outlay (or whatever timeframe you send it out). Then we track the balance of the savings in the tracking account for that particular item.

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    • TamaleLlama You probably want option 1 (a tracking account).  The balance of the tracking account is your total amount saved.  Your category tracks how much is leaving your budget.

      I personally would prefer a different option.  I would put the savings account on-budget and immediately budget the current balance into a savings category. From then on, I would budget further savings into the category, and not bother transferring into the account.  The category Available is the total amount saved.

      You refer to it as a savings account, so we're talking about interest, not investment gains, right? Remember that categories don't live in accounts - interchangeable dollars live in accounts.  You can move excess cash into savings accounts for the interest, but that has nothing to do with categories.  And right now the interest may not be worth the effort of making the transfers.

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    • TamaleLlama By re-reading your #4 it appears that maybe the account you are calling "investments" is actually a Savings account intended to hold money you plan to invest in the future? Not an actual investment account?

      If this is the case, you should put it on budget and create a category for it with a starting balance of $6,000. If you want to add to the category ("save"), you budget whatever amount you want monthly to the category. The category balance shows how much you've saved. If you insist on having the actual bank account match the category balance you transfer the budgeted money in real life from your checking account to this account. 

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  • IMO, while invested, you shouldn't think of those same funds as available for savings goals. The volatility of investments requires that you have sufficient liquidity/flexibility to reflect any significant market pullbacks as categorized outflows. It gets messy. The income/expense reports become a total disaster. If the account drops $10,000 or $50,000, how do you categorize that outflow?  For that reason it's best to leave them off budget or as tracking accounts, where the ups and downs don't have to be categorized.

    The COVID-effect in 2020 was a rather wild ride for many of us even if we managed to stay employed at pre-COVID income levels. I know that my investments swan-dived by nearly $50,000 in the first quarter of 2020, dramatically belly-flopped, floated like something dead in the water for the second quarter, then suddenly and very dramatically recovered to grow by six figures in the last half of the year.

    I invest regularly and systematically. The funds leave my budget for that purpose, categorized as "investing" and show up as expenses in my monthly income/expense reports.  The investment accounts aren't in my budget anymore, not even as tracking accounts. I'm also shuffling some medium-term saving funds to investment accounts with the notion of eventually buying something with those funds (example: a replacement car), but while invested, I consider those savings dollars to be working as investments and not available for the purchase. Until I transfer funds back in to my budget for that car purchase, my budget and the "next car" category reflects my current reality, that I cannot handle a car purchase right now.

    I make different (better) spending, saving, and investing decisions when my budget accurately reflects my actual current liquidity versus my best-scenario, future liquidity. 

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  • I think it’s important to remember YNAB has budget goals. Your goal now is to budget another $6k to reach the total you’re looking for. 
     

    This was the biggest thing I struggled with when I stared (a whopping 58 days ago!), but I learned to stop caring about what account the money was in when I thought about my budget (I still have auto-transfers for certain things, I just don’t worry about them when I’m using YNAB). So to check my progress on say “saving for a new car”, I look at the available balance for that budget item in YNAB and I trust the money is in some account somewhere. 
     

    To be fair, I’m not entirely in love with this idea, but I’m choosing to trust the process for now.  I keep a bit of a buffer in my checking account in case I screwed something up, but my generally feeling is YNAB has helped a lot of people and it has a pretty robust methodology, so I’m going to try it for a year and then asses. 

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