Should my account be Budget or Tracking


I'm not sure if this is a very simple question, but I'm new to YNAB and having a hard time wrapping my head around this. I get paid twice a month, and on my first paycheck of the month I transfer half of my rent to a savings account strictly so that I don't spend it. At the end of the month, I transfer that amount back to pay rent. 

When I transfer this amount back to my checking account, it increases the value of my checking account, but it doesn't show up in my to-be-budgeted. Shouldn't it? For this purpose, should my rent savings account be labelled as Tracking instead of Budget? Or am I just confused as to how this works..

Thanks in advance!

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  • first, you save money in YNAB by budgeting it to a category and not spending it. The account it's in does not matter.

    Second, all of the cash money in all your budget accounts are in your budget categories.

    Third, moving money between budget accounts does not affect your budget, because all of that money is already in your budget.

    Read this:

    The Relationship Between Your Budget & Your Accounts | You Need A Budget

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  • Here's a great youtube video on this exact topic:

    Go to 20:09 to see a clear diagram and explanation of how 'on budget' accounts and 'tracking' accounts interact.

    Basically, in YNAB you have 'budget accounts' (real accounts where your money is held, this money IS available to be budgeted in your YNAB categories) , tracking accounts (real accounts where your money is held, this money IS NOT available to be budgeted in your YNAB categories), and budget categories (how you designate where you want to spend your money). With YNAB, where your money is physically held isn't important. Eventually you'll get to the point where you won't need to transfer that rent money to your savings account and back again; you'll simply put it in your 'rent' category and it will be be safe :)

    In the meantime...What's happening now is that both of your accounts, your checking and savings accounts, are 'on budget'. When you transfer money between them,  your TBB isn't affected because the total amount in your budget hasn't changed. 

      • dakinemaui
      • dakinemaui
      • 2 mths ago
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      FYI, 21:18 in that video he goes off the rails and recommends that you set your savings accounts as Tracking accounts (off-budget). You should stop watching at that point. Not having savings be part of the budget is really silly. Hopefully you've seen the advantages of carving up your checking account balance into smaller, discrete piles (i.e., categories). This practice prevents you from accidentally spending money you need for something else. The exact same advantages apply to your "savings" as well.

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  • Thanks everyone! This was very helpful :)

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