Organising Savings & Investments

Hi all,

 

I am a student and completely new to YNAB - just joined today! I am currently trying to figure out how to organise my savings and investments. I have an emergency fund with the same bank as my current/checking account. I also have a mortgage deposit account with a different bank, and and stocks and shares ISA with another.

 I've been reading about the benefits of using the tracking method to categorise savings, and would love some advice on the most practical way to organise savings in YNAB that are split into separate accounts. I'd rather not have them all in one account as the YNAB method suggests - I like being able to see exactly how much is in each account.

 

Thanks!

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  • Welcome, Cyan Panther !

    I'd like to make the case for not worrying about which account your savings are in. Here's why:

    By splitting your money among different savings accounts, you're giving those pounds (right?) jobs. The thing is, YNAB is really good at giving pounds jobs. (Also rubles, yen, and even dollars.)

    You absolutely need a good system for giving your pounds jobs, but you don't need two systems for that. YNAB's categories will do everything you need in that department.

    That doesn't mean you have to close all but one of your savings accounts in order to use YNAB. You just have to be a little relaxed about whether the amount in your budget's Emergency Fund category (or better yet, multiple categories for specific types of emergencies) matches the amount in your savings account. It won't, and that's okay. (The amount in your budget is the real one. :)

    Your investments are a different story. Those belong outside your budget, and you can track the balance using a tracking account.


    Check out this article for a deeper dive into this concept, and let me know if you still have questions.

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    • Matthew  thanks for this. I think I get confused by the fact that my savings end up in the 'to be budgeted' category' - my savings goals (bar my emergency fund) are all long-term and I won't be pulling any money out of them. would you suggest making these tracking accounts as these are technically outside my budget too?

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      • dakinemaui
      • dakinemaui
      • 3 mths ago
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      Cyan Panther said:
      my savings end up in the 'to be budgeted'

      Create categories to represent what you're saving for and move funds into those categories. 

      Retirement funds and investments are about the only "savings-like" things that are NOT recommended to be on budget.

      I find it simpler to view all categories as savings. It's merely the timeline that differs among them.

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    • dakinemaui really helpful - thank you!

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  • Cyan Panther said:
    would love some advice on the most practical way to organise savings in YNAB

    The budget (categories) defines WHAT you're saving for. The account is just a location for some of your money, which is independent of purpose. Much like you can have £5 you intend to use to buy lunch. You can put it in your back pocket, front pocket (a little more secure), or even leave it in the bank and use your debit card to pay (perhaps most secure). Accounts provide various advantages (various interest rates, security levels, avoiding foreign exchange fees, etc.) that have nothing to do with whatever you'll buy with that money.

    Category balances (Available amounts) tell you whether you can afford something. Account balances tell you whether you can pay from that account. Two very different questions being addressed.

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