Transfer $ from Tracking to On-Budget Account
Hello. Can anyone please help me understand this. My scenario is as follows...
1) I deposit $1,000 into my checking account (on-budget)
-when I run an income/expense report, I should have $1,000 in income.
2) I then transfer that $1,000 to my tracking account and buy a few stocks.
3) after a few months there is no change to the stock price (still have $1,000 in stocks) but I have an emergency and have to sell the stocks. I sell them and transfer the $1,000 back into my checking account (on-budget) as an inflow.
Q: when I run an income/expense report, will it now show $2,000 in income even though it really is only $1,000 just being moved from on-budget to tracking and back to on-budget.
I'm trying to work this out and I don't want to show double income. I've been trying to replicate this in my budget, but haven't been able to figure this out. Is there a better way to transfer that money back in from the tracking account?
Thanks for any help anyone can provide.
I have an emergency and have to sell the stocks.
Stocks should be a long term investment and not storage of funds for emergencies. They are too volatile in the short term and lose favorable tax treatment as well.
While Move Light is correct about what to do to get it to not show up as income, it should show up as income. Money you withdraw from investments is new income to the budget, no matter how short a time period ago you put it in. Otherwise, when you go to retire, what do you do? Have technically no income because at some point all that money was invested by you earlier?
Inflowing to categories should be reserved for the Rs: refunds, reimbursements, rebates. Stock income is just more income.
MandB Listen to them about investing. It's not my forte. If you had an off-budget savings account for this purpose, you'd inflow back to the category the money left from.
However, there's no good reason to have off-budget savings. Put your savings in savings categories that are specifically labeled (loss of income, medical, tech replacement, home maintenance, auto maintenance, etc, etc).
Move Light Sound Life said:
Second inflow goes back to the investing category, not RTA.
If your desire is not to show this as doubling your income, this would be the best way to go. Where it left (or expensed) you return it through "inflow". If in your example you brought $1100 back in you would show $100 income and $1000 off set to the original expense account that removed it from your budget.
These are all great replies and I’ll go back and determine the best approach for my situation. Thank you all so very much.
Unfortunately some emergencies are larger than the funds that were setup for “worst case”. In those times you do what ya have do. I agree with everyone about not touching my investments. 2022 will be about reevaluating and funding appropriately.
Unfortunately some emergencies are larger than the funds that were setup for “worst case”. In those times you do what ya have do.
Great time to re-evaluate what is needed for worst case, eh? I'm in a similar position. I'm starting to build up my 6 month living expenses emergency fund and keep fighting the desire to throw that into investments instead of a savings account.
I think I've read everything but I didn't see it mentioned. I does show $2,000 in income and $1,000 in expense (when you transferred the money to investments) so it's a net of $1,000 in income as expected.
If you filter out the category for the money going to investments so indeed you are hiding some expenses so that will inflate your income.
At the same time, if you use always the same payee to bring back investments in your budget then it's easy to subtract that income from the report if needed. I know YNAB doesn't do it for you but it's just 1 substraction (net total at the bottom - investment income line). If looking at more than 1 month, you can use the numbers in the total or average column as appropriate for your purpose.