How to budget for savings account that don't go in the 'To be budgeted' category
So my situation looks like this.
Me and my girl have paychecks which we keep in the checking accounts and this is what is included in our budget.
Now we have 1 saving account that we don't want to be included in the budget as it is a long-term goal that we have set to hit and we will not spend any money from it.
I would like to set aside 500 bucks every month from our budget (from our paychecks) that we will have to transfer onto the savings account. Now if I create a goal for it in the budget and I actually budget the money for it and track payment from my checking account to the 'general savings' category it will take out the money from my checking account and track it in the budget.
My issue is how to connect that with the savings account if it is excluded from the budget itself. I know I can make a transfer, but if I move 500 bucks from checking to saving account and also budget 500 for the same cause I will lose 1000$ from my budget altogether.
I understand that I am budgeting expenses and this technically isn't an expense as we still have that money, but also looking at that money as something we cannot touch meaning we cannot spend it I would like to use it as an expense.
Can anyone please explain to me how to make this damn thing work?
Thanks a bunch!
You can make the savings account a tracking account so it isn’t included in the budget funds anymore.
the recommended way though is to have it on budget. The first month you use ynab you will budget the whole amount in that category. Then each month you will budget $509 to that category and then transfer the money if desired.
In YNAB, you save money by budgeting it to a category and then not spending from that category (or moving it to another category). So when you get income, budget money to the category. The only difference between saving and spending is when you ultimately spend the money. You'll see us sometimes state that saving is just deferred spending.
The choice to move it to a savings account is a cash flow decision and not about reserving it for a specific purpose. Categories do the reserving, so the account the money is in doesn't actually matter.
Mr. Fabulous said:
if I move 500 bucks from checking to saving account and also budget 500 for the same cause I will lose 1000$ from my budget altogether.
Nope. When the transaction is entered, that updates the category that you have $500 less in the category -- not $1000 less.
Budgeting is merely earmarking $X toward some future payment. You still have that money.