How to deal with "rounding up" apps
Before I found YNAB, I started using Qapital, which is an app that rounds up all purchases to the nearest dollar and puts it in a savings account with them, where you can also use a credit card. Does anyone use something like this and YNAB at the same time?
Over the last two years, we "saved" $5,000 by rounding up purchases. (Embarrassing, right!) PreYNAB we cashed out that money when needed. Now that we aren't buying as much, there is way less savings.
Right now I have it as a line item in the budget as "Qapital" with a budget of $175. But really it is kind of a savings account and I'm not sure how to reflect that. And I'm also thinking that it might be better to stop using Qapital altogether (but cue my recent post on being overly sentimental! Since I was an early adopter of the app I get the service for free whereas now they have a monthly charge.)
Your thoughts most welcome. Thank you all for being so helpful and also not judgmental.
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Yes, it would be better to cancel it. It's very difficult (if not impossible) to make it play well with YNAB, and you're right: now that you have YNAB, you don't need Qapital.
If it helps, you can still do a bit of the same thing by sweeping unspent categories into fun money or long-term savings. I do this on a weekly basis: if I've underspent my grocery budget, I move the rest into something fun. Adds up fast!
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Hi, Julie
The recommendation is always to cancel the round-up programs or spare-the-change programs, and begin making deliberate allocations to savings categories yourself.
The programs work really well for people who aren't paying attention to the minute details of their financial transactions. But because in YNAB you monitor your account balances, and you track every single dollar or cent and have given them all jobs already, when the program siphons off a bit here or there, you have to match it entry-for-entry by siphoning off from one category and allocating it to another, or transferring minute sums from one account to another. It becomes an exercise in excessive entry and tedium, especially when you consider that you don't end up with "new" money at the end. There will not be any sudden windfalls of $5,000. Using YNAB that $5,000 will be there all along and you will be aware of every $ you move around in order to save up the $5,000.
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Agreed. I used Qapital as well and really enjoyed it for a while. I used it to pay extra money towards my student loans and for my vacation stash.
Now I find I'm being forced to think ahead and actually set those categories up as goals.
I'm finding that I prefer telling my money what to do when it comes in vs waiting to see what I have left and deciding later what to do with it.
I didn't cancel my capital account but I did pause everything while I went all in on YNAB. Now that I have I don't think I'll go back.
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Another vote for cancelling it. I had this feature on my main account when I started YNAB and as said it became an exercise in excessive transactions and tedium. Saving 0.04 cents at a time isn’t much fun when you have to enter it in to the transaction list each time. I’m addition, that feature was usually the culprit for out of balance events.
Eight months later I can intentionally save more in a month than I could in a year of any rounding up app.
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Hi Julie !
Everyone above has made a great argument against those roundup accounts - we also have a great blog post about why we don't typically recommend those round-up savings account. Now that you're a YNAB user, we think that you'll find a lot of great ways to save money without the round up accounts--so, consider keeping your change and letting your budget be your guide. I think you'll find that article really helpful.
If, despite our efforts to sway you, you still want to keep Qapital, it would take a bit of extra work. Each transaction would need to be entered as a split, with the roundup amount being a transfer to a Qapital account in your budget.
If you do need additional help, please let us know! :)
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Thanks all. I am going to cancel it. I have transferred the funds I have in there now, which can pay off hubby’s credit card. I think with YNAB I won’t have to trick ourselves into saving! YNAB is so great!
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Bank of America does this too...Keep the Change I think it's called. Not sure if there is a way to DC it.
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I've only been using YNAB for a month and I have had one of these accounts (called Coink) in the same bank as my main checking and savings for quite a few years. It has served as my Christmas savings and I liked not having to think about it. (I have come to realize I was also not "thinking about" anything else when it comes to my finances...hence, YNAB.) I have both my checking and Coink accounts linked to YNAB and the transactions (both in and out) are brought over and I just have to accept them. It is starting to feel a bit unnecessary now that I am paying close attention to my accounts and budget. I may close it, but for now it isn't much extra work for me.
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BarcosBarcosBarcos
What's your entry process? Do you enter every transaction as a split entry with category expense and account transfer, then match the amount transferred as a new amount allocated to Christmas?
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HappyDance My bank does a separate transaction for the rounded amount. For example, if I spend 10.50 at the grocery store, I'll have three transactions: -10.50 and -0.50 in my checking account and +.50 in my Coink savings account. Since I have YNAB linked to all my accounts at this bank, all I have to do is accept them and they are a wash. I haven't noticed any affect to any of my budgeted categories, but like I said, I am brand new to YNAB and I'll be curious to see what it does in my second month.
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HappyDance My plan is to adjust my Christmas savings at the beginning of the month to whatever the balance is in my Coink account at that time.
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BarcosBarcosBarcos
I replied to your post, but then your post and my reply just disappeared. *Poof*
Your process sounds more efficient than I had originally imagined. I can see where the bank account sync is saving you the tedium of entry. I don't use bank sync, so the thought of all that duplicate entry or split entry made me cringe.
By the way, I like your process of allocating to the Christmas category in the next month. I think it's very smart of you to not revise your Christmas category every single time you have a $0.50 transaction -- what a PITA that would be -- and your system sounds a good deal less onerous than I thought it might be.
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That is less work, but it requires giving up the real-time nature of your available spending category information. I guess you could manually enter the 10.50, but how do you account for the .50 in your budget categories? Does it just go to whatever the original transaction was categorized as (proportionally in the case of a split trans)? I guess that means your Coink account is off-budget, because you need to categorize that money as leaving your budget if you want to add it back in to your budget later in your Christmas category.
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bevocat
Since this is my first month on YNAB, I’m not sure I know all the repercussions the Coink account could have going into the next month. This month I had a good bit of cushion in all my categories, so I’m not sure the affects in a month where things are tighter. Since all the money was first lumped together in “To Be Budgeted,” I kinda looked at it as my Coink bank account holds my Christmas savings fund plus other categories until I shore it up at the beginning of the following month. Hopefully this makes sense.
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BarcosBarcosBarcos It does, and it should be fine, provided that you budget to your Christmas category the total amount of all the Coink (oh! just got the name!) transfers. If you don't, you're not saving that money for Christmas, just shuffling it around for what looks like to me no purpose.
You could do exactly the same thing by budgeting money to your Christmas category and not moving any money around, just with no added work.
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bevocat
I agree! That's why I may just close it. It isn't much work but it is still work.
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