Pre tax budgeting

What solutions have others used for pre-tax budgeting?  I want to keep track of 403b 457, HSA, tax withholding, insurance premiums, etc as part of my budget.  These are all deducted prior to my paycheck hitting my account and I want these to be separate from my to be budgeted amount. 

I can set up a tracking account for HSA account but does anyone do this for taxes, insurance premiums, etc as well? 

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  • I only track the amounts where I still retain use of the funds. So retirement accounts, HSA (or FSA), and they are transfers to off-budget accounts which are reconciled with an adjustment at month end. Commuter benefit is kept on budget and that spending is part of our Fuel/Commute category.

    I don't bother with other deductions, because they don't matter. When they are gone, they are gone.\

    I have spreadsheets in which I do track all of that payroll information, because I wrote a complex tax calculator that makes use of it to project my federal and state tax liabilities and/or figure out if I need to adjust withholding or make estimated tax payments.

    But the payroll deduction data isn't useful for the 2 reasons I'd want it in YNAB:

    1) The money needs to be accounted for the budget

    2) The money affects my net worth

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    • nolesrule Thanks for the help.  I agree that having it in YNAB is probably overkill because I don't need it for everyday budgeting.  I suppose I just want to be able to see all of my outflows in one spot.  By the time I add up all the monthly contributions to retirement and HSA it begins to feel like a big chunk of change that I should have my eye on.  I guess I need to dive into Excel and make my own spreadsheet!

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      Tomato Mill The sheet for my wife's paycheck has 27 columns. Mine has 18. Overall my tax calculations spreadsheet uses 21 tabs, though I could probably combine a few of them if I really wanted to.

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  • Hi Tomato Mill !

    Jesse actually did a Whiteboard Wednesday on this topic: Handling Paychecks. This is quite an old video - made for YNAB 3 - but the information still holds true!

    We encourage budgeting with your Net Pay, but if you're determined to use your gross you can track all of the expenses you listed. You'll enter a split transaction with your Net pay as the transaction amount, you'll enter an inflow for your Gross pay and then outflows for each paycheck expense. 

    Take a look at the video and let us know if you have questions! :) 

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    • Faness Thanks for replying.   I found Jesse's whiteboard video last night.  It sort of helped but seems like a lot of work to do it (as he pointed out in the video).  Maybe I just need to be comfortable with budgeting only on net paycheck or build myself an excel spreadsheet/ find another way to track the other stuff

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      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 1 yr ago
      • 3
      • Reported - view

      Tomato Mill 

      Tomato Mill said:
      I found Jesse's whiteboard video last night. It sort of helped but seems like a lot of work to do it (as he pointed out in the video).

       That's the key.  It's a lot of work to track things that way.  You need to ask yourself, is the information you get from tracking that way worth the effort?  If not, you don't track it that way.  Either you let it go, or you find some more efficient off-budget way to track it.

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  • I use both Quicken and YNAB. I tried to drop YNAB to stop the duplicate data entry but came back to it after a few months without it. I feel that I'm more proactively engaged in controlling my spending with YNAB than with Quicken. I do have a budget in Quicken but I use that more for forecasting than for controlling spending.

    That said, I find Quicken better for what you describe. Gross paychecks are easy to record, including deductions and retirement account contributions. Tracking those details helps me forecast my taxes and make financial decisions based on that information.

    If you're not that anal, ignore the deductions and consider Personal Capital. It's a good way to track your investments held at multiple firms and to see a bigger picture.

    For FSA accounts, consider creating a budget account at the beginning of the year with an opening deposit equal to your pledged amount. The total is available to you on January 1, even if you don't work at that employer for the entire year. Whether you record the deposit as TBB or as a negative expense is up to you. You'd have to move the TBB to the healthcare (or child care) budget category, anyway, because that's the only way you can spend it.

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  • Is my thinking correct here?  In following the gross method outlined in the whiteboard video, the one downside is you have to either (assuming 2 paychecks a month)

    1. Adjust your Budget each paycheck date to add the additional deductions or

    2. Put the total monthly amount in your budget for all the withholdings, but you'll have a negative TBB amount for the 2nd paycheck's deductions (at least until you have enough for one months' deductions.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 11 mths ago
      • Reported - view

      gmtom1 Yes, you'll need to Budget with each paycheck. You absolutely should not budget money you do not have. Your TBB should be zero when you are done budgeting your money. Any other number and you can't tell if you've made a mistake without having logged/memorized the exact number.

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