I'm kind of new to budgeting but I just got a settlement from a car accident of $50,000 and I am curious how I budget that. Do I put it into a tracking account a non-tracking account. Do I set up an account for my savings and just put it in there. Help please....

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  • YNAB should reflect reality. Are you going to deposit the settlement check into your checking account? Then do that in YNAB too with the category of Inflow To Be Budgeted. What do you want to do with that money? Pay off some debt? Then assign it to the relevant category. Do you need to live off this money for a while? Create a Deferred Income category and assign the funds there. Then every month you can release a bit back into To Be Budgeted and allocate to the necessary categories. Will you have to pay any taxes on this settlement when you file your 2021 return in April 2022? If so, create a taxes category and assign money there so it will be ready to go next year!

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  • I'll echo what jenmas just said: start with Rule #1, give every dollar a job. What job(s) you give this $50K will  help you decide where to put it.  The examples above were all on-budget things where in YNAB the $ first goes through TBB. On the other hand, if the job of this $ is something waaay down the road, like supporting you in retirement 30 years from now, you might instead put the money directly in a tracking account (and the $50K just shows up as the starting balance rather than going through your budget). That tracking account might be an IRA or taxable investment account that you just manually update the value of every month/quarter/year.

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  • I'd put it in your savings account and put that savings account in your budget. Then budget it hopefully mostly for long term savings jobs. Do you have an Income Replacement fund of 3-6 months income/expenses? What about other Rule 2 categories (True Expenses)? Car maintenance, Vacation, Holidays, etc.?

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