Target Balance Goal Workflow (transferring budgeted amounts to secondary account.)

Hello,

I have a category that has a "Target Budget" goal assigned to it. I want to save up $500 by August, and YNAB will budget $100 towards this category for the next several months.

I have a single chequing account which serves as the source of funds for my budgeting, including the above-mentioned category.

I also have a savings account which I have configured as a "tracked asset" account in YNAB, since I do not want it to be a funding source for my budgeting.

What I want to do in the real world is each month, when YNAB says I should budget the $100 as part of my goal, is transfer this $100 from my chequing account to my savings account (I want the money out of sight, and I also want to utilize my saving account's higher interest rate.)

I'm just not completely sure how to model this in YNAB. So it's April 1, and I tell YNAB to budget my category. I have $100 budgeted, and $0.00 activity. The goal is satisfied for this month (it's green) -- see attached screenshot

Now, how do I model the real-world transferring of the $100 from my chequing account to my saving account? I need to assign a category for this transfer. I can't use my category, as this would log ($100) in activity against it, which isn't correct (from my perspective.) In the real world, from my perspective, I have not spent the $100 set aside for this account.. I've simply moved it to my other account. Now, from an accounts perspective, my chequing account would say "Yes, you have spent it. You paid your savings account with this money." I'm curious if there is a workflow that I can use to model what I want to achieve.

And although my chequing account is unlinked, I can't just simply skip adding this real-world transfer as a transaction in YNAB, as that would complicate reconciliation, and it wouldn't be reflective of the actual state of my account.

I'd like to hear people's thoughts on this. I'd be interested to know if there's a solution for this, or if anyone has a different workflow that achieves what I'm looking for.

Thanks!

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  • What you're wanting to do would be solved by having your savings account where it should be, in the budget section, not the tracked assets section. Then, to keep it out of your budget (as you want), you just make a category called savings, and move this whole subcategory you're attempting to fund, into the savings category.

    Like 2
      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 6 mths ago
      • Reported - view

      To make sure you've moved the funds from checking to savings, you check the amount available on the far right corner of the savings category matches your savings account balance. If it doesn't you need to move money between the 2 (which wouldn't change your TBB as it's just a transfer between budget accounts).

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • Reported - view

      Emma Catherine All of these things cause you to lose visibility into how much you've actually saved for each thing you plan to save for.

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      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 6 mths ago
      • Reported - view

      nolesrule Maybe that didn't come across clear. i have full visability of each of the things I'm saving far as I have subs for each in my savings category (see image)

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

      Emma Catherine Okay, now I understand what you meant. I had thought you were referring to a generic savings category.

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      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 6 mths ago
      • Reported - view

      nolesrule Nah, more like a savings umbrella to represents your savings account. And then each of your savings goals within that umbrella which will all add up to your savings account balance 🙂

      Like
      • Cameron
      • Software Engineer
      • mistercam
      • 6 mths ago
      • 2
      • Reported - view

      Emma Catherine Thanks Emma! I think this will work for me. It really just required me converting my tracked account to a budget account. Back when I was doing this all last night, I didn't like the idea of having my savings account configured as a budget account. I didn't want the amount in the savings account contributing to the "to be budgeted" amount. This was erroneous thinking (I'm going to blame this on cabin fever.) I realize now that since my savings account will ONLY ever contain the amounts YNAB told me to budget for "target balance" categories, it shouldn't be a problem.

      Like 2
      • Emma Catherine
      • Civil engineer getting back on track
      • emmacatherine
      • 6 mths ago
      • 3
      • Reported - view

      Cameron I think almost all of us come into YNAB thinking that we shouldn't have our savings account in view because you will want to spend it, but that's the beauty of the app. It teaches you that it truly doesn't matter where your money is (besides taking advantage of high interest), you are in complete control of it and know what those dollars' jobs are. The app tracks it all for you. I'm glad I could help!

      Like 3
      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • 1
      • Reported - view
      Cameron said:
      I realize now that since my savings account will ONLY ever contain the amounts YNAB told me to budget for "target balance" categories, it shouldn't be a problem.

      Synchronizing this account with a subset of categories requires extra work on your part and is NOT recommended practice.

      Remember, dollars are indistinguishable from each other. Consider there's $2k in checking and $1k in savings, and you have 4 categories: Rent $1500, New Computer $500, and Vacation $500, and Auto Insurance $500. Where is the computer money?

      The answer is, "anywhere you want". Ensure sufficient account balance to handle upcoming outflows; the scheduler and running balance is quite useful in this assessment. No need to care about categories at all.

      Like 1
  • This is not the best way to use YNAB. Your savings account should be a budget account, and this enables you to move any money you don't need in your checking account to your savings account 9rather than moving specific savings money to the checking account).

    Some problems you will run into using your method.... reporting will show money spent when you move it to savings. But then what will you do when you need to actually spend the money? You don't spend directly from the savings account, which means you have to bring it back into the budget.... which will lead to confusion on how much should be where. Additionally, you won't know how much money you've moved out of your budget that is actually saved for a specific purpose (unless you are saving by account, which introduces other issues)

     

    The simple answer is just to say "I need X amount of money in my checking account right now" and just move anything over that amount to your single on-budget savings account.

     

    I will leave it for others to explain how to do what you want to do. I just don't recommend it.

    Like 4
      • Cameron
      • Software Engineer
      • mistercam
      • 6 mths ago
      • Reported - view

      nolesrule Yeah I didn't feel comfortable with how I set it up. It seemed like I was trying to work around YNAB

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      • dakinemaui
      • dakinemaui
      • 6 mths ago
      • 1
      • Reported - view

      Cameron Very perceptive of you. Please ask questions if there's any confusion about our collective suggestions. It should be easy, and the ONLY hard part about any of this stuff should be understanding your own underlying priorities. Cheers!

      Like 1
  • If you keep your savings money in categories that tell you what you are saving for, you won't spend it unless you move it out of the savings categories. The balances of your individual categories are intended to provide your spending guidance. If you are ignoring your categories, you aren't really using YNAB as intended.

    Like 1
  • This is the real nirvana point, but it takes a moment to get there: 

     

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

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  • Money is saved as soon as you put it in a category. The location is flexible, and since any dollar is identical to any other, you can usually "move" categories by merely changing your mind (mental perception of it's location).

    As for "out of sight," do you have an issue spending the Rent/Mortgage money on other things? You won't if you use category balances to guide spending decisions. That "savings" money is no different -- safe in a category.

    The fact it is in a separate account does NOT mean it's any safer. Respecting categories does that. Consider that you overspend on Eating Out. Now some of the money in your plan is gone, but you still have those obligations. Guess where the difference comes from... Yep, that other savings account. That safety is an illusion.

    My suggestion?

    1. Bring the savings account on-budget.
    2. Make categories to represent your plans for that money.
    3. Check category balances to decide if you can afford something. Reallocate as desired.
    4. Check account balances to decide if you can pay with that account. Transfer as desired.
    Like 2
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  • 6 mths agoLast active
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