YNAB Savings Account

Hi, I have set up a TFSA account in YNAB and transferring money from my checking account. The transaction shows up as "category not needed" yet I also have set up a budget line item "TFSA" savings. How is this transfer reflected in the budget? Does it reduce the amount "to be budgeted for" or shows up else where?

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  • Transfers between on budget accounts have no impact on the budget - it is analogous to moving a $20 from your left pocket to your right pocket. If you want your TFSA category to match the account, you will have to manually move money from TBB or other categories to get the two numbers in sync.

    BUT, I don't think you should do that. It's basically busywork to make your category and account balances match each other. Take a look at this article and this article both from YNAB, on how accounts and categories interact. Also, "TFSA balance" is not really a good category. What is that money for? Income replacement? House down payment? Car or home maintenance? Future vacation? Give you money specific jobs. Because if say there is a balance of $3000 in the category but it's just for "savings", it is easy to essentially double count it in your head when you are trying to figure out if you can buy those plane tickets in the same week you need to get the boiler replaced.

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  • Hi, Slate Blue Lion

    I would not keep a TFSA or any other investment account such as LIRA, RRSP, RESP, pensions, etc. as an on-budget account. 

    TFSAs are Tax-Free Savings Accounts, yes, but they are registered accounts. You can't spend directly from a TFSA, your contributions and withdrawals are reported to the federal tax authorities, and while  you can liquidate some/all of the funds in it without paying tax or incurring penalties, you need to engage with the financial institution in order to do that. For those reasons, I would keep a TFSA off budget.

    I use TFSAs for both long-term retirement investing and for shorter term tax-sheltering of some of my emergency fund and saving up for my next car in a couple of years.

    In YNAB, I budget to categories like:  next car, investing, and emergency fund

    When I make a transfer/contribution to any of my TFSAs, that is entered as a transaction, categorized to whichever category the funds are coming from, and the funds are no longer in my budget.

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