How should you enter transfers from savings to checking in your budget?

I keep getting skewed numbers from my budget from adding transfers of money from one savings account to my checking. Anyone else have this problem or have solved it?

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  • Assuming both accounts are on budget (I adamantly advocate for keeping savings accounts on budget), any transfer between these two accounts should have 0 impact on the budget. None. Zip. Zilch. Nada. The money in that transfer is already allocated to your categories (assuming your TBB is 0).

    If you are transferring from an on budget to a tracking account, that is an expense as far as the budget is concerned so you have to have a funded category for it.

    If you are transferring from a tracking account to an on budget account it is an income event and should be categorized as Inflow: TBB and then allocated as needed.

    Like 3
  •  jenmas,

    Are you saying that if I add my savings account to my budget this problem will disappear? I have been using a transfer category and categorizing it as To Be Budgeted until it started subtracting from my  amount to budget from. Thanks for the reply! 

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      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      Ivory Leopard Yes, having your savings account on-budget means you don't need a category when you transfer money between that and other on-budget accounts, and it won't affect your budget at all. And it's a good idea for lots of other reasons, too.

      Like
  • If I transfer money from my savings account to my checking account and use the money to make a credit card payment, how do I update my budget to show the money leaving my savings account?

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      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      Salmon Snow You don't. Money moving between on-budget accounts doesn't affect your budget. Enter a transaction on your savings account as a transfer to checking, and you're all set.

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    • mamster I must be budgeting for my savings account wrong then. I budget funds each month and the green number on the right is my ending balance.

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      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      Salmon Snow Is your savings account on- or off-budget? That is, in the sidebar on the left, is it under BUDGET or TRACKING?

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      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 2 yrs ago
      • 1
      • Reported - view

      mamster How does this work? I keep seeing people say this and I don't understand.

      I have a savings account with $500 in it. My checking account has $1. I need to pay a $400 credit card balance. If I do what you suggest -- enter the transaction in YBAB as a $399 transfer to checking to cover the payment -- and then pay the credit card from my checking account (which physically still has $1 in it I will be overdrawn.

      No mention is made of physically transferring the money at the bank. I need to understand this. Thanks.

      Like 1
      • mamster
      • mamster
      • 2 yrs ago
      • 1
      • Reported - view

      JoeDid Nothing you do in YNAB affects your bank accounts at all. You move money at your bank and then enter a transaction reflecting the transfer in YNAB. Here's the procedure:

      1. Transfer $399 from savings to checking. In your savings account in YNAB, enter the $399 transfer. YNAB will now correctly show $400 in your checking account (and whatever is left after the transfer in your savings account.)

      2. Pay your credit card bill, which is the same as transferring $400 from checking to credit card. Enter this transaction as a transfer in YNAB.

      That's all there is to it!

      Like 1
    • mamster my savings account is under Budget!

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      • JoeDid
      • Remember: It is To Laugh
      • Purple_rain
      • 2 yrs ago
      • Reported - view

      mamster I know how to do it. I know that nothing I do in YBAB affects my bank balances. I've been doing it successfully for years.

      I was asking why you didn't explain that part to the OP.

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      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      Salmon Snow Okay, it sounds like you're making a common mistake: trying to synchronize a savings account balance with a category balance. Give this a read:

      https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

      In short: transfers between on-budget accounts don't affect your budget. It's just like moving money from one pants pocket to another. The money in your savings account shouldn't be assigned to a special "savings category"; it should be distributed throughout your budget according to your goals and priorities like the rest of your budgetable money.

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      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      JoeDid Is YBAB an inside joke or a typo? Genuinely curious!

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      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      JoeDid The OP indicated that they had already made the transfer of money and wanted to know how to "update their budget." In other words, they moved the money at their bank and now need to reflect their action correctly in YNAB.

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    • mamster Thanks for the blog post! I appreciate your time. In the example where the $700 is moved to Emergency Fund, what would the correct transaction be if some of the emergency fund is used to pay a repair person? It sounds like I'm over complicating my budget by tracking when I transfer money from my savings to my checking to pay for things. That I could cut out a step by recording the payment as if it came from savings because my budget doesn't care which account I use the funds from.

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      • jenmas
      • jenmas
      • 2 yrs ago
      • 3
      • Reported - view

      Salmon Snow Let's say I have $10,000 in my EF CATEGORY. I have a plumbing situation and the repair bill is $700. I have $2000 in my checking account, but I know mortgage will be do in a week so should move some money out of my savings account to my checking account. My savings account is an ON BUDGET account. I transfer $350 from savings to checking by recording the transfer in the account register of my savings account (I could also record it in the checking account register). NOTHING happens on the budget page. I write a check to the plumber for $700 and categorize it to Home Repairs. This causes the Home Repair category in my budget to go negative by $245.91. Using the Move Money Tool, I take $245.91 out of my EF and put it into my Home Repair category.

      That's a slightly more complicated scenario than in your question above, but I did it that way to illustrate how the balances of my accounts have nothing to do with the balances of my categories. I have 3 checking accounts, 3 savings accounts and 6 CDs on budget. I have 60+ categories in my budget. No grouping of category balances adds up to a particular account balance (or if they do it is by accident).

      Like 3
    • jenmas YES!!! The Move Money tool is what I was missing. That works like a charm. I have my Savings categories organized so that they'll add up to my account balance at the end of the month. Those were working well until I added a Credit Card to my YNAB this month. I'm learning how to use that with the Payments and budgeting. Thank you for your help!!

      Like 1
      • mamster
      • mamster
      • 2 yrs ago
      • Reported - view

      Salmon Snow Jenmas explained it better than I would have!

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    • JoeDid
    • Remember: It is To Laugh
    • Purple_rain
    • 2 yrs ago
    • 1
    • Reported - view
    mamster said:
    You move money at your bank and then enter a transaction reflecting the transfer in YNAB.

     Ignoring the snark in your other comment, this is the part that I didn't see the OP or the second poster with the problem saying they had done. They talked about making the transfer in YNAB, but not between their actual bank accounts. That's what was confusing me.

    Like 1
  • I don't get this at all. The on Budget lingo and all that. On the left, my checking an savings appear in Budget. Bottom line, I have zero dollars available to be budgeted. A repair comes up and I need $350. I transfer $350 from Savings to Checking and that transaction requires no category. So how to I get that $350 to show as budgetable so I can add funds to that repair category?

    Like
      • mamster
      • mamster
      • 1 yr ago
      • 5
      • Reported - view

      milehighronjon The money in your savings account is already budgeted. When you add a deposit account to YNAB (whether savings or checking), that money appears in To Be Budgeted, and you budget it out to your categories. Moving money between bank accounts doesn't affect your budget whatsoever, so if you want to give some of your money a different job, you need to move it from one category to another in YNAB.

      Like 5
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 2
      • Reported - view

      milehighronjon Read this.

       The Relationship Between Your Budget & Your Accounts: It’s Complicated

      Essentially, your accounts tell you where your money is. The budget tells you what your money is for.

      When you need more money in an account, you move money from one account to another. When you need more money in a budget category, you move money from one (or more) budget category to another. Account movement and budget movement are separate actions.

      Like 2
    • mamster I get what you are saying and now I see how my Savings account did not change in my budget, so I reduced that by $350 and that added $350 To Be Budgeted. Whew!! Thank you

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  • Despite everyone's best efforts, I'm still lost (and read the relationship between your budget... piece). 

    I have $2000 in a savings account for day care. My savings account is on budget, so I have a budget category named Day Care Savings.

    I pay $300 per week for day care from my checking account. So, I set up a budget category named Day Care for that expense.

    If I transfer $300 from Day Care Savings at the beginning of the week to my checking account, Day Care Savings reflects an Activity of -$300. My checking account reflects the addition of $300. I'm ok up to there.

    I pay my day care provider $300 and the check hits my checking account. The checking account is reduced by $300, but now I have to assign that expense in my budget. 

    What I want to happen is that I can assign that -$300 activity to Day Care and have the Available amount equal zero.

     However, if I assign the -$300 transferred from savings to checking that is in my checking account but not reflected in my budget, then the To Be Budgeted indicates I have "overbudgeted" by $300.

    If I move money from Day Care Savings to Day Care at this point, then my Day Care Spending Available would reflect $2000- $300 transferred - $300 moved = $1,400, which is also incorrect. 

    What am I missing? Thanks.

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    • Hey Magenta Falcon ! If you look at the left column, is the savings account under the Tracking or Budget section?

      There isn't anything in YNAB that links a particular account balance with a category balance. Your budget doesn’t care where your money is stored (checking, savings, wallet, etc). Money in tracking accounts isn't included in your budget, and that may be part of it.

      This 31 second video has a quick illustration of the relationship between the budget and accounts!

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  • Magenta Falcon said:
    I have $2000 in a savings account for day care.

     No. You have $2000 in a savings account. The $2000 is part of your budget already., because your budget is comprised of all the money in your budget accounts.

    Magenta Falcon said:
     However, if I assign the -$300 transferred from savings to checking that is in my checking account but not reflected in my budget, then the To Be Budgeted indicates I have "overbudgeted" by $300.

     That's because the money in your savings account is already part of your budget. The $300 should already be in the category in your budget because the savings account money is already part of the money in your budget. You need to move money into your daycare category from another category or categories.

     

    Or is this savings account set up as a tracking account and not part of the budget?

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  • Magenta Falcon said:
    If I transfer $300 from Day Care Savings at the beginning of the week to my checking account, Day Care Savings reflects an Activity of -$300

    It shouldn't, because moving money doesn't impact the budget (i.e., the Day Care category) in any fashion. (Refer to the "Relationship" article.) After you pay the $300, you will get an activity in the category. Perhaps you are confusing the $300 activity from a previous payment?

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