Accounting for loan Proceeds

I just gave myself a small loan from my savings account and transferred the funds from my savings to my YNAB account.  I will pay myself back and would like to know the best way to account for the loan and repayment of the loan. Do record the loan proceeds as income and create a separate budget item for this specific loan? Any help would be appreciated. 

Cptn Kirk

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  • I'm assuming from the way you phrased your post, that the savings account you tapped is not one that is an on-budget account in YNAB, and that it is a top priority to you to replace those funds. If my assumption is correct, I think you may find it  handy  to use a category for saving up the replacement funds. You can set up a goal on that category to remind yourself how much is left to replace the funds you've used. 

    I use two such categories: one for retirement investing and one for my next car purchase, both categories for which I transfer funds out of my bank account to different higher-yielding investment options.

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  • HD, thank you, this is very helpful. I will do just that.  Would you categorize the loan proceeds as income or something else?

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      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 3 yrs ago
      • Reported - view

      Coral Ink (0cf3255d64e5) Better yet, since it is your savings account, you should put it in your budget and give every dollar a job. (Rule 1). If it was on budget, you would just move money from one category to another, and you could set a goal as a reminder to replenish it.

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 3 yrs ago
      • Reported - view

      Coral Ink (0cf3255d64e5) 

      I would treat the incoming money (new to the budget) simply as income to be budgeted.  The word 'income' in this context just means new money to your budget. If you use your budget to create reports for tax purposes, you will be able to exclude the vendor/payee name associated with your own savings account transfers.  When you transfer funds back out, you can use the same payee name you used to identify where the funds came from.

      By the way, I completely agree with nolesrule  that a savings account you occasionally (even only rarely) use would serve you better on budget. I recommend that you bring it on budget and give the funds specific touch-me-not savings jobs: zombie apocalypse, pet-crocodile emergency vet fund, etc..

      However, I do know that many YNABers prefer to leave their long-term and emergency funds off-budget, especially in the beginning. In continuing to do this, recognize that you are adding the extra steps of transferring money in as income and transferring it back out as expenditures.

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