TFSA's

First of all I am so glad I gave YNAB a chance. I've been using it for not even a month and it's changed the way I think about finances completely. I'm still getting used to it and I'm still trying to figure some stuff out. So here's my question:

I have a TFSA account set up and a category to go with it. Hypothetically, let's say I have $1,000 in my TFSA and I entered that as my starting balance. Then I assign $100 to my TFSA category. My available funds in that category will only be $100, not $1,100 like I would have in my account. How do I make my available funds in that category match what I actually have in my TFSA?

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  • Hello fellow Canuck! When you set up the TFSA with the starting balance of $1000, that amount was added to the Ready to Assign (RTA). If you did not assign it to the TFSA category, then you need to take the money from other categories and assign it there. 

    Having said that, another thing to remember is that there is a difference between accounts and categories. Highly recommend reading this document many times to get the hang of it. It is not recommended that you make the category match an account. Rather, what do you want that $1000 to do in your budget? Emergency fund? Put it in that category. Car repairs? New car fund? Basically you have already done this without realizing it. 

    The difference with YNAB is that when you want to make a purchase, you first check your budget to see if you have enough set aside. If yes, then you check the account you want to use to make sure that there is enough there. So, if you wanted to say pay for car repairs, and needed to pay from chequing but there wasn't enough there, you would move money from the TFSA to chequing to have the funds needed. Separate but related.

    https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

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  • Another Canadian welcome! I have 2 TFSAs. One is a “holding account” for my longer term goals that I am saving for (car, etc.) and one is an put it in and leave it account for waaaaaay in the future. The first one is a budget account in YNAB. As MadDog stated, the budget accounts are included in your overall money to assign so if you plan for it to be “savings”, you must have a category that is called “savings” and assign the account balance to that category. 

    In my case, I have several categories that have money parked in that account. 

    The other TFSA is set up as a tracking account. That means I consider that money “spent” when I transfer it to the TFSA and never include that in my budget. 

    You will lose your mind if you try to make categories match accounts. Make sure you read the article  linked in MadDog response) about the relationship between categories and accounts and truly understand it.

    My (hopefully) simple explanation of budget accounts is pretend you want to grab a burger and need $10 to do so. Now pretend you only have $5 in your front pocket of your pants. You also have money in your other front pocket and in your back pockets of your pants. Those pockets are your (budget) accounts. Your category doesn’t care that you used money from 4 different pockets. The budget sees all 4 pockets in one pile called Ready to Assign. You can only spend what you have in all your pockets. 

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  • Hilariaun said:
    Hypothetically, let's say I have $1,000 in my TFSA and I entered that as my starting balance. Then I assign $100 to my TFSA category. My available funds in that category will only be $100, not $1,100 like I would have in my account. How do I make my available funds in that category match what I actually have in my TFSA?

     But to specifically answer your question, if you see the TFSA money as “savings” then when you first set up your budget with $1000 TFSA account starting balance, you should have assigned $1000 to the TFSA category. 

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  • Thank you for your replies. I noticed I made a mistake as I entered my transaction. I didn't select the correct category. I will definitely read over the article posted as well. Thanks!

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  • ty 

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