How would you factor a partner's savings into your budget?

Sorry for the clunky title, I really wasn't sure how to express this succinctly. This is a minor little thing (I think), but thought I'd ask y'all how you might handle this scenario. 

A quick overview: my partner and I do not have merged finances. We essentially split everything equally and are aware of each other's (approximate) account balances, but haven't fully taken the plunge to completely merge finances, and aren't looking to do that just yet. 

When we received our stimulus checks, we decided to put my partner's check in my savings account, as it earns decent interest, he doesn't have a savings account, and he wanted to make sure that money wouldn't be touched. I created a category called "Partner's COVID Bucks," moved $1200 to the category, and haven't touched it at all since.

All this just to ask - is there anything else I should be doing when factoring this money into my budget? Would you handle this any differently? It does mess up my reporting a bit, but it's not hard for me to remember that my net worth is $1200 lower than YNAB thinks it is. 

Thanks folks! Appreciate any thoughts y'all may have; hearing examples and approaches from y'all in this forum has really helped me "get" the YNAB mindset and how to implement it. 

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  • What are you doing for all the other transactions? I would be splitting the Rent, Groceries, etc. with half hitting your category and half hitting a Partner Spending (reimbursement) category.

    This $1200 inflow would just be categorized to the Partner Spending category like any money they give you. The fact the category is positive means you owe.

    That said, if you want to track this outside of normal things, then what you've done is fine. It's just going to be a little weird when Partner owes you for something and they say, "Just take it out of my Covid money." When that happens, use a net $0 split transaction to decrement Covid and increase Partner Spending. Effectively, this is just another reimbursement stream; the fact it's with the same person is kind of beside the point.

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      • EP
      • Substitute Teacher
      • Epphonehome
      • 3 mths ago
      • Reported - view

       dakinemaui I hadn't yet made a "partner spending category," but I think that might be best. Gonna have a few more cups of coffee, read around a bit on that, then look at implementing it. 

      Here's what I do right now. I have categories for rent, water/gas/sewer (all billed to us from the apartment complex), power, and internet. I budget for my half of each expense, rather than the whole enchilada. We submit rent/apartment utilities in two payments on the first of each month, one from my checking account, one from his. For power and internet bills, they're in his name, so I budget for my half of the bill, then Venmo him my half of the payment, categorizing the Venmo payment in the appropriate bill category. 

      It does get trickier for categories like groceries, for example, where one of us will pay for the full transaction, then the other will immediately reimburse via Venmo. If he pays and I Venmo, it's pretty easy - I just categorize the Venmo transaction accordingly (usually split between groceries, household supplies, maybe toiletries) and it's all accounted for. It's more difficult when I pay and he reimburses me, and this is where I think having a partner spending category might help with reporting. I manually enter/categorize our purchases when I get home from the grocery store. Then, he Venmos me, I manually enter that as "to be budgeted" with his name as the payee. 99% of the time, I then move this money to the relevant categories (i.e., if we spent $100 on groceries, this $50 goes from TBB to groceries). Sometimes, usually at  the end of the month, if I still have a little money left in that category before moving his reimbursement there, I'll put it somewhere else (a bill, maybe). The way I've been seeing it, I don't need that money for that category, I want to use it for something else, so I give it a different job. 

      Writing this out has given me a bit of a headache, and I think I may be confusing myself by not having a partner spending category. I am definitely going to look into that.  

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      • dakinemaui
      • dakinemaui
      • 3 mths ago
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      EP You might want to check out the recommended guidance for Reimbursements. In particular, your current approach seems a bit "manual" and it also skews reports. It's working for you, it would seem, but I think it could be tweaked to be better.

      Transaction-wise: Rent and utilities are fine as is. However, having to Venmo multiple times probably gets old, so I'll come back to this.

      If you buy Groceries, I would split your portion to Groceries (or multiple splits to your various categories as you desire) and his portion to Partner Spending. Partner Spending would obviously decrease, and negative means he owes you. (We'll also come back to this, as YNAB doesn't really like negative Available values in the budget.)

      If Partner buys your portion of Groceries, recognize a) he owes you less and b) you get groceries. Therefore, you'll want to update both your groceries (decrease) and Partner Spending (increase). The amount of cash you have hasn't changed, so the top-line of the transaction is $0. Split 1 is an outflow against Groceries (perhaps several splits/outflows if you want to break it out to household supplies, etc). Add one additional split for the inflow to Partner Spending.

      The advantage is the Partner Spending category keeps the "score". It also accumulates across whatever joint expenses you have (cable, eating out, whatever). It's easy for whoever is "behind" to simply buy the next round of whatever, avoiding Venmo all together if you want. (If someone does Venmo, it's just a simple transaction against Partner Spending, with outflow/inflow depending on which direction money is going.) Hopefully it's clear Rent & Utilities could be lumped into this framework as well if you wanted.

      Budget-wise: Negative categories complicate things, and YNAB will seek to correct negative categories at the month changeover. (The budget is the plan for your cash, and negative cash just isn't a thing.) So the recommended advice is a one-time offset of the Partner Spending by enough to keep it positive. If you budget, say, $300, then that's the new "we're even" point instead of $0. If the category is less than $300, you are owed the difference. As long as you are owed less than $300, the category is positive and YNAB is happy.

      You would size the offset to the expected pending amount owed to you. It's even easier if you always owe him, as the category will already be positive, so you wouldn't have to offset it at all. I suggest you put the offset right in the category name for reference. If you ever need to increase the offset (because the category went negative), just budget the shortage and reflect the new offset in the name.

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      • EP
      • Substitute Teacher
      • Epphonehome
      • 3 mths ago
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      dakinemaui Wow. Thank you so much for taking the time to explain all this to me! This is so helpful. I can definitely  see the benefits of the partner spending category here - I think I'll take some time this afternoon and tinker with it a bit :) Thanks so much! 

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      • EP
      • Substitute Teacher
      • Epphonehome
      • 2 mths ago
      • Reported - view
      dakinemaui said:
      If Partner buys your portion of Groceries, recognize a) he owes you less and b) you get groceries. Therefore, you'll want to update both your groceries (decrease) and Partner Spending (increase). The amount of cash you have hasn't changed, so the top-line of the transaction is $0. Split 1 is an outflow against Groceries (perhaps several splits/outflows if you want to break it out to household supplies, etc). Add one additional split for the inflow to Partner Spending.

       Sorry to pester again, but I'm trying this out for the first time and am a little confused here. Here's the scenario: 

      Yesterday, my partner and I went to the grocery store. It has a separate section for alcohol, and you pay for your alcohol separately at that section. I bought $152 worth of groceries on my credit card. My partner bought $26 worth of alcohol. 

      In YNAB, I have my partner spending category set up with an offset of $100. I recorded my groceries purchase with a 50/50 split between groceries and partner spending - so $76 to each. 

      What I'm confused about now is how to account for the alcohol purchase. I get that the top line should be 0, then -$13 to alcohol and +$13 to partner spending. Which account would I record this transaction under? Should I create a certain payee for this? 

      Apologies for all the questions here. I really appreciate all the help on this forum. 

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      • dakinemaui
      • dakinemaui
      • 2 mths ago
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      EP said:
      Which account would I record this transaction under? Should I create a certain payee for this? 

      Any cash-based account will do since the net effect is $0, and you can clear it immediately since it won't show up on a statement. I would just use your main checking just for consistency/simplicity, but you can make a dedicated cash account if you want to keep these separated for some reason.

      For the Payee, I'd use the name of the store, just as if you had actually bought things yourself.

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  • EP said:
    It does mess up my reporting a bit

    Regardless of whether you use a Covid category or it winds up in the reimbursement / Partner Spending category, you should directly categorize this inflow into your Savings account to that category. (This in contrast to categorizing as TBB and budgeting to Covid or Partner Spending.) That way it will net to $0 after a later outflow. Yes, reports are impacted until that happens.

    You could go over the top and make the inflow a transfer from a Tracking account. This keeps Net Worth accurate, since that negative account offsets the additional amount in Savings. A later outflow would be recorded as a transfer back to that account.

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