Categorizing Saving Account Transfers

I'm trying to wrap my head around the whole Transfer between accounts when drawing up your budget. I saw  Orange.Saxophone post about a similar issue but didn't completely understand it.

My monetary flow with YNAB Budget Lines are set up like this:

Emergency Fund ->  Main Savings Account

Property Tax -> Main Savings Account

PSLF Payoff CD -> High Interest CD

Hobby -> Secondary High Interest Savings Account


How do I keep track of these budget lines? I have the same issue as Orange that transfers between accounts isn't categorized. Someone said you have to categorize the accounts themselves. If I don't list these as a budget those amount show up as to be budgeted..

I'm horribly confused.

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  • What account the funds are in is superfluous. Your categories define the purpose of your funds. The only purpose of a savings account is to get you a better interest rate. Transferring between budgeted accounts has no affect on your budget because the funds are already in your budget. You're just moving them around at that point. If you have $5 in your front pocket and $5 in your back pocket, you have $10 right? If you then move the $5 bill from your front pocket to your back pocket, you still have $10.

    All of your budget accounts add up to one big pile of money in To Be Budgeted. After you add your accounts, you divide that big pool of money into categories. You already specified a few such as Emergency Fund, Property Tax, and Hobby. I don't know what PSLF Payoff CD means. What's the purpose of those funds? Categorize them but realize that they are not as liquid as your other funds. 

    Read this as many times as it takes for it to sink in:

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  • Tomato Wildebeest said:
    Hobby -> Secondary High Interest Savings Account

    If you want to spend $50 on your hobby, I wouldn't bother to transfer that from the savings account first. Dollars are interchangeable. 

    Synchronized accounts and categories are REDUNDANT. Once you stop doing that, things get much easier. (Just make that $50 hobby purchase from any account with at least $50.)

    I suggest you leverage the Running Balance and scheduled transactions to decide when to transfer between accounts.

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