Budget vs Tracking Account?


Could someone please explain Budget versus Tracking accounts? I set up YNAB so long ago I don't recall being given the option. Can someone explain the two options simply please? FYI, I do have my accounts connected for direct import if that matters.

Appreciate it!

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  • Any account you can spend from should be a budget account. For most peple, these are going to be cash asset accounts like checking and savings and credit card accounts. Any account that is illiquid, meaning you can’t spend from it directly, should be tracking. For most people this is going to be things like installment loans, investments, lines of credit, etc.

    If you followed setup and selected the types of accounts you had, YNAB chose for you. Sometimes people insist on putting accounts that should be tracking on budget anyway, for example, a Line of Credit account. This usually causes a lot of headache. Or they try to keep something off budget that really should be on budget, like a savings account. Same problem. If you can spend from it, it belongs on budget. If you can’t, it definitely shouldn’t be on budget, and you should think hard about whether it belongs in YNAB, especially if you’re just learning to budget.

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  • +1 for everything @WordTenor wrote.

    If you're a YNAB beginner, I'd also recommend excluding tracking accounts entirely from your budget. A loan payment can be recorded as an outflow,  a disbursement from an asset (e.g. FSA/HSA) would be an inflow. 

    The main reason for including Tracking accounts is to have a more complete picture of your net-worth inside YNAB. It's fun for reporting purposes, but generally won't have any bearing on how you operate your budget. (And, IMO, there are better apps out there for wealth management.)

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    • bret is right. Right now, YNAB can't properly update Tracking Accounts anyway for some reason. At least that's true for certain things like investment accounts or loans. It can import the individual transactions but cannot keep up with everything. So after a while the balances are inaccurate and you need to manually adjust them. The consensus is that YNAB should make this more clear or maybe even stop offering this feature until they can fix it. I usually keep the Tracking category closed (or scrolled-up or whatever) so that I don't see it all the time. I hope they can fix this.

  • Oh, I see. Great clarification from both of you and bret I appreciate it! I've got everything set up as budget accounts because YNAB chose for got. Thanks again!

  • There are also some accounts, such as Mortgages for instance, where YNAB is unable to import a valid balance. In those cases it is best to make it a tracking account and update the balance after a payment is made by referring to basically any other personal finance app or referring to the Mtg companies web site or monthly statement. 

  • Kind of late to the party on this question...I linked all my credit union accounts to YNAB, and it shows my loans as Tracking accounts, and my checking and savings as Budget accounts, which makes sense to me.  It also shows my Visa credit card as a Budget account, which doesn’t make sense.  Is that because I *could* spend out of it?  

      • dakinemaui
      • dakinemaui
      • 2 mths ago
      • 2
      • Reported - view

      Sea Green Saxophone Yes, many people use a credit card for budgeted purchases. If you're just paying off the card (not using it), you could have just made a category for the payments (like any other bill). This avoids dealing with the interest charges in YNAB.

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