Building Up My Savings Account

I have several budgeted items I'm saving for with goals.

When my paycheck arrives in my checking account, do I simply transfer money into my savings account? How does that reconcile with my budget savings goals?

I'm confused on this.  Please help!

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  • WHen your paycheck arrives, budget it to the categories that you want. 

    Then you can choose to transfer some money to your savings. You enter that as a transfer with no category needed. 

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  • Thank you. So in my budget I budget for adding $200 to savings each month. And, I transfer $200 from checking to savings each month.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 4 mths ago
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      • Reported - view

      Beige Mask Not quite. You budget money to your categories. And then you transfer money that you don't need in your checking account to your savings account.

      Don't connect the budgeting and the transfer mentally, because they are independent actions.

      Like 2
    • Beige Mask Try to get into the habit of not comparing what you actually have in your bank account with what you have in your categories. They are totally separate items that shouldn't be confused. Your categories tell you how much money you have available to spend in that category but it has nothing to do with how much you have in your bank account. Try reading this for more understanding:

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

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  • Rule-1 says to give every dollar a job (category).

    Rule-2 says that some of those jobs should include long-term / infrequent expenses like "Christmas Gifts", "Car Repairs", "Vacation", etc.

    If you're following those rules, then naturally some portion of your money will be "saved" -- it's assigned to jobs that you don't expect to happen right away.

    At some point, you might observe that your checking account balance is growing pretty large with all of those "savings", and you might want to transfer some of that excess money over to a different bank account where it can earn better interest. You don't have to do this -- YNAB doesn't care, and it is indeed simpler to keep all your cash in a single account! But the interest earning potential could make it worth the effort.

    Of course, once it's time to pay for those "True Expenses", you might find you need to transfer some money back to your checking account. 

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