Using round up bank function with YNAB
Does anyone have any feedback on how to use round up with YNAB?
I'm talking about the function that most banks use where they round up a purchase and deposit it in your linked savings account.
So I don't see any other way how to do it with YNAB other than rounding up the purchase on the software and then adding the 50c (for example) in the savings account as income to be budgeted.
I know technically it's not income but it seems easy that way and it it becomes a hassle with YNAB then I'll probably cancel the function.
Anyone got any better ideas?
Thanks in advance!
Turn it off. With YNAB you don't need it.
Just because the money gets moved to a savings account doesn't mean you are saving anything. The purpose of your money is independent of location. Budgeting money in a category (actually multiple categories, since you should give it a discrete purpose) for saving and then not spending it is how you save money.
That bank feature just creates extra work to record all the unnecessary transfers.
Another vote for turn it off.
A rounding up or skimming off the change program works beautifully for people who are generally oblivious about their accounts and who do a lot of spending. I've got one of those in my family. The prime purpose of these services is to build up some savings. Using YNAB consistently makes us all hyper-aware of our money, and encourages us to deliberately set savings goals. Trying to fudge the numbers on your spending or eventually dealing with the discrepancies that result will eventually require intense therapy. 😉
I am ambivalent about turning it off. I see the point, but I use Digit, which has a similar function and helps me consistently save more than I think I can. Every time that account hits $200 I put it towards our credit card debt, and it has really added up. So if you can live with WAM-ing, that seems to be the way to manage this feature.
I'm not especially familiar with the program, I've heard of it, but never considered it until I was already budgeting pretty thoroughly, and never tried implementing it. On the bank side, to the transactions show as a single transaction that is already roudned up, or does each transaction trigger a partial-dollar transaction? Also, do the partial dollar transactions take place the same day as the "real" transaction or do they aggregate at the end of the week/month? I'm not sure where I'm going with this question, but my curiosity is showing.
If you're willing to manually enter manually enter your transactions or go through after an import and round each transaction up, you could do that, then put the account where the deposits are going as an off-budget account and let it import all the partial dollar transactions to its heart's content. Or just go in and put in a monthly adjustment transaction for that matter.
The trick would be when you go to reconcile the account, each transaction in YNAB would correspond to two transactions on the statement, which would make it a bit more of a hassle to make sure everything was right at the end of the statement.
I actually do my own manual skimming or rounding on a regular basis, so I do know how much and how quickly the little bits here and there add up.
Once a week or once a month (depending on how busy/hectic my life is), usually on a Saturday morning, I review my budget, reconcile my accounts, and manually round off my budget categories to an increment of $5 with no cents. The move money tool (MMT) makes this really easy in nYNAB. I used my iPad app when doing this in YNAB4, which also makes it super easy. I just go down the list of categories and nip, tuck, file off the rough edges of my categories so that instead of 66.25, it reads 65, and instead of $132.38, it reads $130. And I roll all those dollars and cents into my Loony Fund. I generally keep about $100 to $150 in my Loony Fund for small reimbursable expenses for others. Anything above that $100 to $150 gets moved to a savings category.
Before YNAB, I used to skim my change out of my wallet every day. This nipping and tucking with the MMT does something similar.
I think its a great idea for those who want to save every cent. So I don't see an issue in doing it. However if anyone is wanting/or asking YNAB to implement that feature to help them, keep wishing. Whist I would support that wish for those who want to use it, YNAB have shown a reluctance to implement even the most basis features. So unfortunately its going to have to be a manual process...
Edit: Anyway getting people saving some money is a good thing hence why I support it.
I like mine. I know I could very easily just save the money, but I like seeing it come out little by little.
I have a category called Keep the Change (that's what my bank calls the program) that it comes out of, and it goes in to my Emergency Fund category. I use direct import, so it doesn't take any more time in my budgeting. It records a debit from my checking (out of Keep the Change) and a credit for my savings (into Emergency Fund). I fund it with roughly what it pulls every month.
Could I just increase my savings by that amount? Yeah, of course. In fact, I'd probably save more. But I like it.
BTW, I did this same general idea when I had Digit. But then they started charging a fee, so I dropped them.
I missed this in your response earlier, so I will respond separately.
It is quite helpful to be direct and tell someone when they need to reframe their way of looking at things. It's what we like to call a paradigm shift.
nolesrule - As a reformed "emotions are ridiculous and logic is always superior!" advocate myself, I can say that you are totally missing Slugger 's point here.
I happen to agree with you that I personally find these round-up bank functions way too cumbersome to use with YNAB. But that's my personal opinion based on my *personal* assessment of how much I want to complicate how I use the software versus how much benefit I'd personally gain from using this savings strategy.
That doesn't mean it's the right choice for everyone, however, and pretending that there's some perfectly logical universal strategy that would allow everyone to simultaneously achieve optimized savings results is nonsense, and ignores the fact that humans aren't perfectly logical identical creatures. :)
It's totally reasonable to point out the cumbersome drawbacks to using these round-up functions, and you're probably right to say that most people end up turning them off once they get the hang of YNAB. But if it's working for *some* people, and allowing them to gain traction on their savings goals, then what's the harm in that? If they don't mind dealing with the extra transactions and it makes them happy watching their "electronic change jar" pile up, then let them enjoy that little win, even if it doesn't align with your personal preferences :)
I used to use Keep the Change & here's my experience: I didn't bother manually entering the Keep the Change transactions & just let them import. The problem was that they didn't import as transfers so I had to go in and manually change them to transfers (and life is too short for that). What I ended up doing instead: I looked through my keep the change history and it was about $20/month so I set up an automatic transfer from checking to savings every month for $20 (with a scheduled transaction in YNAB). Not a lot, but at the time, I needed to see that savings grow. (I thought of it as a generic emergency fund.) Now that I'm (a) more comfortable with YNAB and (b) mostly out of credit card debt and therefore in a better place financially, I don't feel I need to do that. I save now to specific categories (including an emergency fund) & transfer funds for such to my savings account where it gets more interest (I know how much I'm budgeting to those categories/mo so I just set up an auto transfer from checking to savings).
TheTabby Right, what jenmas said. It's not wrong; it's just not very efficient. If you have a paid-in-full card in YNAB, you can afford to pay it to zero at any time. So that means that once a month, you can go in, schedule the payment, and ensure it comes out before the due date, saving you time and avoiding any interest and fees. I do this each month when my statement closes on the 12th. The money stays in checking until the following month on the 9th, when the whole statement balance is pulled from checking at once. This keeps the money earning money for me as long as possible, but also ensures I never pay interest. And if you are going to have your credit report pulled, you can pay it completely to zero a few days before the report is pulled, which solves the utilization problem.
WordTenor The payment process you've described above isn't very efficient either. Why are you manually scheduling a credit card payment to ensure it comes out before the due date (9th vs 12th)? Simply set up your credit card to be automatically paid from your checking account on the due date. This is a one-time setup process that requires no further ongoing interaction from you. The bank's automatic credit card payment process will ensure that your money keeps earning money for you as long as possible.
In the spirit of this thread, let's take a closer look at one of the new "hotness" features released on January 24, 2018:
Web Release Notes: January 24, 2018
• We added a “Record Payment” button (next to “Add Transaction” for credit card accounts. Click it and it’ll create a new transaction with helpful defaults, such as last-used payee and payment amount as inflow.
So, if you know your credit card's current outstanding statement balance is quoted at $4,000 and your YNAB Credit Card Payment balance is currently sitting at $6,000 (due to ongoing, everyday spending), then clicking the "Record Payment" button in the Credit Card's account transaction listing in YNAB will create a $6,000 payment transaction for your approval (pay your credit card balance down to zero (Keep the Change)).
Would you consider this newly implemented feature to be a "fantastic feature" or a "fantastic fail" for YNAB users? Please explain why.
Hi Simon ,
I was grappling with the same issue. I bank with ING in Australia and "Everyday Roundup" amounts are deducted from my Savings Maximiser and deposited into my Mortgage Simplifier with each transaction. If that sounds similar to your situation, I believe the following steps below will resolve your issue.
Adding roundup transactions in YNAB:
- Add the account receiving the roundup transactions.
Note: Mortgage accounts should be added as tracking accounts.
- Select the account paying the roundup transactions in the sidebar.
- Click Add Transaction.
- Click Payee and select the receiving account.
- Click Category and select Inflow: To be budgeted.
- Type any notes into the Memo field. For example, the transaction name as it appears on your bank account.
- Type the roundup amount into the Outflow field.
- Click Save.
- Add the account receiving the roundup transactions.