Multiple bank accounts
Hi! I am pretty new to YNAB but I am already obsessed! Love it! The challenge I have had was figuring out how to manage multiple bank accounts in one budget. I trust my budget in YNAB because I know the balances are correct. My issue was figuring out what balance need to be in what account. Does this make sense? This is what I have done to try to figure it out...I labeled each category in the groups with the bank the transactions should be deducted from. Example: “mortgage 1st-chase”. Then I went and added all the dollars I gave jobs to by the bank accounts. Then I ended up having to transfer funds to make sure I was covered. Moving forward, I fund my categories separately to avoid confusion. So when I get paid and $$ goes to chase, I fund all my chase categories only. Is there an easier recommendation?
This is unnecessary and busy work and it will break. You have to accept that accounts and categories present 2 different views of the same pot of money. Those are independent of each other, trying to make some correspondence between them is bound to drive you crazy. Check this article: https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/
What you need is to turn on the running balance in your account register and use the scheduled transactions. This way you can see if an account will have enough money in to support the future payments. If not, you know you have to transfer money into that account. If the balance seems to grow too much, you can move money out of the account.
Yeah, the only purpose for extra accounts in YNAB is to make interest on longer term savings. YNAB categories determine what your funds are for, both spending and saving. Not accounts. The only time you need to worry about your account balance is when paying from a spending account in which case you need to make sure you have enough in the account to cover the payment(s).
It took me a while to figure out how much i need to keep in my cheque account for a month. The occasional big expense i transfer money in to cover it.
Then I had to decide how much to keep in an easy access savings account. When that got higher the extra could go into a long term savings account.
i reconcile often, every day or two ( only 3-10 transactions) so that it is quick and easy. That reconciling process makes sure ynab knows exactly what is in my accounts (on-budget accounts). When my ToBeBudgeted is 0, it means every one of those $ in my accounts has a job. Those two processes (reconciling and budgeting) are ynab’s alternative to trying to match a category balance to a particular bank account.
Basically, when you have 2 (or more) accounts, your logic for spending goes like this:
Ask yourself, "Do I have enough money in my CATEGORY for this purchase?"
Don't purchase it
Roll with the punches ahead of time, and pull money from a lower priority category.
Now that you've got the money in the category, you need to check the account that you're going to use to make sure there is enough money in it. If there isn't, transfer money from another account, and then make the purchase.
A couple of tricks to make the second step a little easier:
1.) use a credit card for the purchase, this way you'll only have to make one larger payment from your account each month, and you'll know how much it is far enough in advance to make the money transfer a simple process.
2.) You can keep track of your running balance, and having scheduled transactions will let you know the approximate balance of your account for the next month. Keep a bit of a buffer in it to account for unexpected expenses, and transfer more in as necessary.