How can I use my investment accounts to save towards goals?

Hi, I'm new to YNAB and am working on how best to get it to fit my needs.

For short term expenses and goals it seems to fit really well but for longer term things I'm struggling as my long-term savings/planning is generally in the form of investment accounts. I really like the philosophy of accounts are for WHERE budgets are for WHAT, but YNAB doesn't seem to support that with investment accounts: the WHERE overrules the WHAT.

For example, I want to save $X to remodel my home (I don't own a home but as an example). I decide I'll do this in 2 years and so a savings by a specific date goal seems to fit well.
But I also don't want to leave that money in a savings account, I'd rather invest it in the medium-term. Accepting risk tolerance and understanding that if the investment goes poorly this may impact how much I have to work with or may mean I need to wait longer, that's fine.

But it seems like transactions to investment accounts are "activity" that deducts from budgets not transfers that are budget-neutral.

So... is there an accepted solution for how to do this? Am I overlooking something? Or am I out of luck and need to track this independently?

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  • To do what you want would require having your investment account in your budget. Your investment account would need to have a surplus beyond your savings goals which you would hold in a separate category, and that category would absorb the gains and losses so that your other budget categories don't take the hit.

     

    Half the money in my budget is in my investment account, but only a small part of that belongs to money that isn't purely investing.

    You need to realize that even over 5 or 10 years the returns won't make that significant an impact on when you can reach your savings goals. The amount you save will have a larger impact. Personally I don't recommend investing  money for budget categories until you've already built up a reasonable investment account that has no purpose other than being invested, because taking large losses early will hurt your timeline. This is called sequence of returns risk.

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      • Beige Boa
      • Beige_Boa.15
      • 1 mth ago
      • Reported - view

      nolesrule Right "having my investment account in my budget" sounds like exactly what I'd like to do with YNAB, but that didn't seem like an option? When I linked my investment account it automatically became a "tracking account" and I don't see an option to change that classification anywhere?

      I do already have more than my intended budget categories in investment accounts, I'm trying to figure out a way to make YNAB work with that rather than change how I leverage my money in order to make YNAB fit.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • 1
      • Reported - view

      Beige Boa Set it up as an unlinked account of type checking or savings. Even if you link it, you will not get the transactions or the market value after the initial balance import, so linking is useless.

      Enter the Current balance of the account. Then just update the balance at the end of every month by reconciling, and change the category of the adjustment to your investment category.

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  • You'd have to track it independently if using an off-budget investment account. You can use YNAB to help you set aside the investment goals each month but then it would leave the budget when you send it to the investment account. Alternatively, you could add your investment account as an on budget account and then you could have a category to track it like everything else. However, you have to be handle the market swings if you do this.

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      • Beige Boa
      • Beige_Boa.15
      • 1 mth ago
      • Reported - view

      Superbone 

      I'm perfectly happy to account for market swings but I don't know how to actually get my investment account set "as an on budget account"?

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      • Ceeses
      • Ceeses
      • 1 mth ago
      • Reported - view

      Beige Boa Don't link it. You'll have to manually input transactions for this account. 

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    • Beige Boa use a checking account type in the account creation. Update the balance periodically by right-clicking on the account. I would also edit the adjustment transaction to use the Unrealized Gains/Losses category you created instead of To Be Budgeted.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      Beige Boa Just choose a Savings account type.

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