Partly living off savings...how to use YNAB

I've been using YNAB to track expenses and income since 2013 and have tracked everything.  However, I've realised that I've not really embraced the budgeting side of it (arguably the single most important part!)  

At the moment, with a start-up business my living expenses are partly covered by income and partly covered by savings.  However, I'm not sure how best to approach this with YNAB.  

The income component is straightforward however the "income" from savings is harder to manage.  At present my Funds for the Month only shows actual income from outside.  Is there a way to pay myself from my savings so that it shows up with Funds for the Month and I know how much I have to budget with?  The money comes from a couple of savings accounts which are kept within the Budget so that I can also track interest income etc for tax purposes.  I did consider moving them to Tracking Accounts and then making monthly transfers but the Tracking Accounts don't allow for categorising transactions.  Am I missing the obvious?! :-)

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  • It's as simple as moving the needed portion from your savings category to To Be Budgeted and budgeting until TBB is $0. (Funds For X doesn't even figure into it.)

    The drain on savings is obvious (the negative budget entry), which may be incentive to cut costs. Simple division yields an estimate of how long you can continue this practice.

    As with any multi-account scenario, you may need to shift funds between accounts from time to time. This change of location does not impact the intended purpose (category) of that amount of money.

    Like 1
      • Lisa
      • Lisa.1
      • 1 yr ago
      • 1
      • Reported - view

      dakinemaui Oh you're totally right!  Still getting to grips with the new online version having used YNAB 4 for so long.  Hadn't realised it was so easy. Thank you!!

      Like 1
  • Like you, I'm living partly on income, partly on savings. I've committed to a month spending limit -- let's call that X. I have a Category called "Next Month's Money". During September, for example, I got a check for freelance work, and a Social Security check. I recorded those as income, and assigned them to "Next Month's Money". Sometime before the end of the month, I see how much I need to take out of savings in order for "Next Month's Money" to have X dollars in it. I transfer that money from one account to another in the real world, and do the same in YNAB, from a Tracking Account into a Budget Account. So YNAB sees it as income, and I Assign it to "Next Month's Money", which now has X dollars in it, my spending limit for the next month. On the 1st of the  month, I move that money from the Category ("envelope") named "Next Month's Money" into "Ready to Assign". Then, proceed to budget that money the YNAB way, for that next month. 

    Like 2
    • PattyInColorado That's a great strategy, Patty! Thanks for sharing it!

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      • PattyInColorado
      • YNAB User but not Wine Abuser
      • Pattyincolorado
      • 1 mth ago
      • Reported - view

      Dela Thanks, Dela! I didn't mention here that for me, spending savings is only a temporary necessity while I create more steady income. But for the moment while I have to spend savings, I want (need!) to do it on a budget. 

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    • PattyInColorado You're totally right! I especially appreciate how you've set a target for Next Month that keeps your monthly spending in line ongoing. Super helpful as you determine how much more monthly income you'd like to generate and maintain enough savings while you do. Wishing you the best as you create more cash flow! Hope you're also enjoying it. :)

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      • PattyInColorado
      • YNAB User but not Wine Abuser
      • Pattyincolorado
      • 1 mth ago
      • 1
      • Reported - view

      Dela Thank you, good to hear that from a true YNABber. I am totally enjoying it, thank you  :-)

      Like 1
  • I misread the subject title at first. I thought it was "Party Living Off Savings". I thought to myself, "Ooh, that sounds like fun."

    Like 4
      • PattyInColorado
      • YNAB User but not Wine Abuser
      • Pattyincolorado
      • 1 mth ago
      • 2
      • Reported - view

      Superbone Hahaha  :-)  I think that's also known as "a fully-funded retirement plan". Working on it!  

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      PattyInColorado You and me both! 🙂

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