One YNABer/One Not Household
Moved in with my girlfriend recently. Haven't really merged finances much yet but it's coming up. Trying to figure out the best way to track it and keep it reflected for my budget and my analytics.
Here's the situation:
The bills have been in her name so I had just been Zelling her for my half. We bought a security system this month on my card ($315 each). We decided to just take my half of the bills ($292) out of the $315 for her half of the security system.
I tried creating "fake" transactions for the bills so costs would be represented in analytics, but I took them out of my checking account. I tried creating a "fake" transaction for the $292 from her to me but I don't know if I should stick that in my checking account or...?
I know this is probably a pedantic question. I'm a pedantic person. Help a guy out. What's considered the "best practices" here?
If your finances aren't merged, then you should follow YNAB's reimbursement guidance.
If you paid up front for the full $630 for a security system, you should budget for that full amount. When your girlfriend pays her $315 share, you'd treat that like a reimbursement using the steps described in the link.
Things do get trickier if, instead of directly reimbursing each other for shared expenses (e.g. Zelle), you make arrangements like "I'll cover your share of X if you cover my share of Y." The simple approach is to just record (and budget) the full $630 toward "security system" and budget $0 toward bills (since you won't pay any this month.). The downside is it skews your spending Reports -- which could impact how you use quick-budgeting and goal setting features.
A more sophisticated approach is to use Split transactions. Record the $630 as a split of $315 toward "security system" and $315 toward "bills". But now you've (slightly) overspent your normal $292 of bills, and you'll have to figure out how you intend to rectify that. Perhaps your girlfriend will Zelle you the $23 and you could record it as "inflow: bills." Or perhaps you'll make some other arrangement, requiring more split transactions. Tracking all that stuff can get pretty tricky!
In some respects, things get easier when you fully merge finances! Of course, that introduces a whole new set of (relationship!) challenges: Making compromises and aligning your priorities to make shared budgeting decisions.
I think the best way is to use a category for GF's portion of any outflows. This is also the recommended practice in the reimbursement docs linked above. The primary benefit is to consolidate everything into a single category so the "score" is easily seen.
As for the "I'll cover your share of X if you cover my share of Y" case, this is a simple split with a net of $0 (since no money actually entered/left your account). Split 1 is an outflow against the category you would have used had you been paying (category Y), and Split 2 is an inflow against the GF category for the same amount. Your outflow for X is a normal split transaction with two outflow split lines (one for your portion and one for her portion) and a net of the entire expense.
You should select one of the two approaches in the docs as far as what happens in the budget. The first approach described there (the pre-funded or offset category) is the most robust (least error-prone).
I would personally use the "split" feature to log the transaction into a security system chunk and a bills chunk and log each to the proper category. My hubbs and I use venmo to bill+pay each other for shared transactions. I have venmo as it's own account in my ynab and I reconcile it just like my checking account. I can't get it to link electronically so I hand enter all the transactions, but since it's just the one account it's not so bad.
Since you are moving in together I will share that the hubbs and I each pull our grocery money in cash every month and put it in an envelope and then we spend it together on groceries. We always make sure we contribute the same amount when we beef it back up. Keeps us from having to venmo back and forth all the time for groceries which are a common expense.
Good luck to the both of you 👍
The primary benefit is to consolidate everything into a single category so the "score" is easily seen.
Just wanted to point out that it's pretty easy for whoever is "behind" to buy the next few rounds of groceries, movies, or whatever. This often avoids the need to "settle up".