Moving Between Buckets YNAB to Ally Savings?

In our Budget I have a category for savings which is our  Ally Savings account where I keep our EF. I also have categories in YNAB for sinking funds such as furniture, Christmas, Auto expenses, etc.  

As most of you know, Ally allows you to have buckets so I created buckets in Ally to correspond with my sinking funds in YNAB. I transferred money from each of my sinking funds in YNAB to Ally savings account and distributed it amongst the buckets with Ally. I figured if the money is just gonna sit there, it may as well earn me some interest.

My question is: Within YNAB, do I need to empty the sinking funds categories and move those funds into the Ally Savings category? I think so because if I leave the balances reflecting in YNAB categories it means that $ is still our checking account, but in reality it over at Ally. TIA. 

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  • Categories are not tied to specific accounts. Purpose (categories) and location (account) are completely independent concepts. I would drop the Ally Buckets; I can't imagine it's doing anything YNAB doesn't already do.

    Move as much money as you want into the higher rate account. (It's just a transfer in YNAB, no category.) Most will keep enough in checking to support the next 2-4 weeks of outflows. The running balance and scheduled transactions makes this easy to evaluate at a glance.

    Like 2
    • dakinemaui dakinemaui so just move savings from each category in YNAB to the  Ally Savings category and then just separate it in Ally? I really just want to earn more interest. But I don't want to lose track of how much we've managed to set aside for each sinking fund. This has always been one of the harder concepts for me to grasp. 

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      • dakinemaui
      • dakinemaui
      • 8 days ago
      • 1
      • Reported - view

      Powder Blue Case No, the categories for the sinking funds keep the funds you've put in them. Money is interchangeable. If you have $50 in your Eating Out category, then that category can "live" in ANY account with at least $50 in it. Moreover, you can change it's location just by changing your mind.

      Read the article I linked earlier. It will go into more details.

      To come full circle, you should not have a "savings" category. That is not a specific job. WHY are you saving that money? Vacation? New phone? Christmas? Job Loss? Make categories for your specific purposes, just as you've done for the sinking funds and monthly expenses.

      Like 1
    • dakinemaui yes, so the savings I have with Ally has a main "core savings". I have buckets with income replacement (we are about 4.5 out of 6 month total for our EF) labeled "income replacement". That's its job. That's the savings account bucket that has the most $. Then I have buckets labeled Christmas, furniture, car, etc. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 7 days ago
      • 1
      • Reported - view

      Powder Blue Case You do not need to use the Ally buckets. I don't and I have a savings account with them. The categories in YNAB are the buckets. So use YNAB to guide your savings and spending. The accounts the money is in do not matter.

      Like 1
      • dakinemaui
      • dakinemaui
      • 7 days ago
      • 4
      • Reported - view

      Powder Blue Case 

      1. Make categories in YNAB that correspond to the buckets at Ally.

      2. Move the corresponding amount from the generic savings category to each new category. 

      3. Hide the generic category when it is empty.

      4. Delete the buckets at Ally.

      Have you read the article I linked?

      Like 4
  • You don’t need Ally’s buckets. That’s what YNAB does. You are just going to add extra complication if you continue to use them. I have Ally too. All funds and more are in YNAB categories. That’s all you need.

    You are putting an extra constraints on your budget that prevents you from making even more interest on your funds.

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    • Superbone I hate the thought that my sinking funds are just sitting in our credit union without earning interest. I know it's not a lot, but in 2 months Ally paid us $4.61/month in interest. Our CU money market only paid us $.99/month. I 'm just trying to earn the extra interest so I need to physically move the sinking funds to Ally. I guess I just don't understand how I'm supposed to take advantage of the higher interest without losing track of how much I've set aside without the YNAB buckets?

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    • Powder Blue Case Put the money in Ally, but don't worry about their buckets. They only give you 10 anyways, last I checked, and I have way more than 10 categories representing longer than monthly savings. 

      Actually, I move any money I'm not planning on spending each month into the HYSA, leaving a cushion in checking, of course.  There's no need to sync YNAB category available amounts and bank account balances.

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 8 days ago
      • 1
      • Reported - view

      Powder Blue Case And looking at your categories in your picture, Ally Savings should not be a category. What are those savings for? Make categories for them in YNAB. Not buckets in Ally.

      Like 1
  • Powder Blue Case said:
    I hate the thought that my sinking funds are just sitting in our credit union without earning interest. I know it's not a lot, but in 2 months Ally paid us $4.61/month in interest. Our CU money market only paid us $.99/month. I 'm just trying to earn the extra interest so I need to physically move the sinking funds to Ally. I guess I just don't understand how I'm supposed to take advantage of the higher interest without losing track of how much I've set aside without the YNAB buckets?

    So do all of us. Keep them in Ally and even more! That's what we're trying to tell you. YNAB doesn't have buckets, it has categories. Those categories tell you how much you have saved for that category. You don't need to save them in buckets on top of that. If you've got $40,000 in your Emergency Fund category, that's what you've got for emergencies. $30,000 in your Car Replacement category, that's what you've got for purchasing your next car.

    The only funds I keep in checking are enough to pay that month's bills plus a little buffer. That's it! Everything else is in higher paying vehicles like Ally.

    Like 3
  • I appreciate everyone's advice. This is such an abstract concept for me. I'm sorry. I'll have to go back and read these articles again. I understand about YNAB categories and Ally buckets. In my concrete mind, I see $50 in my YNAB furniture sinking fund category so if I move it to my Ally savings acct to earn more interest and distribute it within Ally to my furniture bucket, that means I  have to move it from my YNAB furniture category and put it in the YNAB Ally savings category and then physically distribute it in Ally. I guess what's getting me is that I'm trying to make the balances see in YNAB match what's really in each category/bucket. And this way it doesn't appear as if it's still sitting in our checking acct. Ever since I started YNAB this has been the hardest concept to grasp because it's so abstract to me. I don't want to frustrate anyone. Sorry if I have.

    Like 1
      • Rakuna
      • rakuna
      • 7 days ago
      • 2
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      Powder Blue Case This forum is for asking questions so you asking questions is not frustrating. And this (accounts vs. budget categories) is also something a lot of people struggle with in the beginning. It can be a tricky concept especially if you have used different accounts (or in your case these Ally buckets) to earmark your money for different uses before YNAB.

      Like 2
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 7 days ago
      • 1
      • Reported - view

      Powder Blue Case Keep at it. You'll get there. I know it!

      It IS a bit abstract. But once you get it, it is very powerful.

      Like 1
  • Powder Blue Case said:
    In my concrete mind, I see $50 in my YNAB furniture sinking fund category so if I move it to my Ally savings acct to earn more interest and distribute it within Ally to my furniture bucket, that means I  have to move it from my YNAB furniture category and put it in the YNAB Ally savings category and then physically distribute it in Ally. I guess what's getting me is that I'm trying to make the balances see in YNAB match what's really in each category/bucket. And this way it doesn't appear as if it's still sitting in our checking acct.

    This may be the piece you're missing. Since your checking and Ally savings are both in your budget, all of these funds combined make up your budget funds. If you transfer funds from checking to Ally, or from Ally to checking, it has no effect on your budget funds. You just moved them from the top shelf of the fridge to the bottom shelf. Or from the bottom shelf, to the top shelf. The fridge contains all your money with different locations within to store it.

    Here's how you would handle your example above. You see $50 in your YNAB Furniture category. These are your furniture funds. If you added $50 a month for a year and didn't purchase any furniture, you'd then have $600 in your Furniture category. If you want these funds in Ally, you just transfer them there, no buckets, just one big pile of money. This does transfer does not require a category. You are just moving your funds around. This has no effect on your budget. YNAB is keeping track of your categories including Furniture.

    You probably don't want to transfer $50 at a time though each month. You have other sinking funds too. You can transfer one lump sum to Ally for all of them at once. Again, no category required.

    But the big abstract leap is to not worry about a one to one balance in your Ally account that adds up to all of your savings categories. Instead, just keep enough in checking to pay for all of your upcoming bills and then transfer ALL the rest to Ally. 💡

    Now, when you're ready to purchase an item such as Furniture, you transfer enough from Ally savings to your checking account so you can pay for the item. Let's say it costs $300. You would transfer $300 to checking, pay the store $300, and categorize the transaction as Furniture in YNAB. If you had $600 in your furniture category, this transaction would subtract $300 from Furniture leaving you with $300 for future furniture expenses.

    Like 3
  • Superbone said:
    But the big abstract leap is to not worry about a one to one balance in your Ally account that adds up to all of your savings categories.

     This is always a big mind leap for people coming to YNAB.  A lot of people try to "manage" their money through accounts.  Put up your hand if you did this (✋ me).  Or have everything in one "savings" account with a spreadsheet to keep track (also me).  It took me a while to put ALL my accounts on budget in YNAB and let the categories do the work of keeping track of what was what.  Ideally, you would have a daily (chequing) account that is used to pay bills etc. and a high(er) interest no fee account to pile money. That's it. Two accounts.  How simple is that? Technically we have this set up now. We did have other accounts that are now closed. And we have a few credit card accounts - one "operating" card which we use for everything and get (lots of) cash back every year. The others are used to bounce around the remaining debt on various 0% or low interest offers. Again, once the debt is gone we will have 2 credit cards - one in my name and one in hubbys name (for credit purposes).  

    Like 3
      • dakinemaui
      • dakinemaui
      • 3 days ago
      • Reported - view

      MXMOM I actively use a checking and one savings. However, I have 7 savings accounts, because they keep sending me promotion offers if I open a new account. ($200-300 is pretty good money for the 1/2 hr total time commitment to open, fund, and write a note about how long to leave money in the account.) I recently closed the Chase account. I've no idea how I got on their list, but I'm glad to be there! I've milked them more than anyone. 😎

      Blast from the past: three of them are the old NetSpend offer that's still paying 5% (a ceiling of $3000 total, unfortunately).

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      • Ceeses
      • Ceeses
      • 3 days ago
      • 1
      • Reported - view

      MXMOM I count myself as lucky as I came to YNAB because our finances were starting to be too difficult for my little head and I was sure something better than opening several accounts (and juggle their conditions) should now exist. The way YNAB has to put all accounts in one bucket and use categories for purposes was exactly what I was looking for and I didn't have to make a leap.

      But I agree with you, it is a difficult mind shift for a lot of people.

      Like 1
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