Investing for medium-long term goals with YNAB?
This is something I'm thinking about for the future, I'm not ready for it right now, but I'm wondering how people who are already doing this do things. If you are investing some of your category balances into the market, where the balances can go up and down, do you do that with an off budget account and just transfer money off budget? That's how I fund my Roth IRA so far, but I've never invested in anything but a retirement account...yet.
Once my balances for my house and car repair categories get above a certain amount, I will invest future contributions into a tax efficient investment account to more efficiently fund future medium-long (5-10 year) goals, but I don't want to stress when the balance goes up and down with the market. It will, as people are remembering the least few days. I just zoom out to 5 years on the x axis and realize, so far, it's just a blip. But I don't want to feel like it's messing with my budget to invest money for those medium-long term goals, which I know in the long run is a good idea. So I'm thinking off budget. But that seems so unYNABy.
Every month I add to my taxable investment accounts which is an off budget tracking account. It's an expenditure from my budget. I have an Investments category that I budget X to every month and every month there is a transfer of X to the tracking account so it gets counted just like any other spending but has a net zero impact on the Net Worth (monthly gain/losses are a different matter which do impact Net Worth)
If you have slack in your budget and it's something that you are saving up for 10 years from now (such as buying a new car), you could maybe take the risk of having your investments on budget for that. But you'll have to be willing/able to weather monthly losses from the category.
I was just talking about that, here:
I do as jenmas . Superbone just told me he (or possibly she? Haven’t paid attention) does keep investment on budget.
Thanks for the responses ya'll! I think I will start with using an off budget tracking account that I reconcile once a month for my medium-longer (5-10 year) term category goals. I may get that started sooner rather than wait.
I will keep tracking my net worth, including my retirement account balances and house value, in Mint once a month and not put those accounts into YNAB. I don't want to worry about those balances changing day to day. I'm trying to ignore the noise as much as possible without losing important information that is actionable. My retirement accounts are all in Target Retirement funds so I don't need to rebalance them.
Has anyone tried Ally's robo investment options? I've never invested in taxable, I know people that do on Bogleheads would talk about tax efficient investment. I need to find their expense ratios before I can decide where and what to invest in. I could just pick some sort of balanced fund at Vanguard, but you usually need a larger balance to start with and a bear market, if we're hitting one now, is a great time to start new investing, if your time horizon is long enough. I was thinking so far I like Ally and I already have a savings account so that's one less bank to deal with if I use them for taxable.
Sky Blue Harp I'll write this out U.S. tax form style
Step 1... figure out how much cash you want to hold. I plugged in our net paycheck amounts and multiplied by number of pay periods in a year to get the net takehome amount (we have different pay periods), then took that number and divided by 12 then multiplied by 6.5 to get 6.5 months.
Step 2. Get Total money in your budget
Step 3. Get balances of any accounts on budget you want to consider part of your investments. For me it's limited to my Treasury Direct account and my Brokerage account.
Step 4. Subtract Balances of Step 3 from Step 2 total money in your budget.
Step 5. If you have any categories in your budget you want to ignore from the calculation and hold in cash anyway, total them up. Then subtract them from the result of Step 4. (For example you have a Car Replacement category with a large amount of money, and you are planning to buy the car in the next month or two, you obviously don't want to invest that money).
Step 6. Subtract Step 1 from Step 5. This tells you how much money you have available to move to investments.
I use Google Sheets and wrote functions that use the API to get me Total of Budget accounts, Total of all accounts, retrieve a specific account balance by YNAB Account ID, retrieve category balance by YNAB category ID, retrieve Category Group Balance by YNAB category Group ID. Some of these functions require summing.
I have a tab in Google sheets where I have 3 columns Name, YNAB ID, function call to get a total. I can then use VLOOKUP using my account/category name on this tab from elsewhere when I want to insert a value somewhere in my overall spreadsheet.
My investments spreadsheet is actually quite complex, and this is just a small part of it.