Separating savings (I know, I know)
Hey everyone,
So I have been using YNAB for about 2 years now. I have a decent grasp at it but after all the searching and reading I've done I still have a question. I am curious how you all manage your savings when reconciling weekly(or however often you do it). In order to reconcile and get my balances to match I have to subtract the amount in savings from the available amount. Because YNAB includes this in your available amount and my checking does not. It's kind of clunky to me. How do you all ha for this or is this as good as it gets?
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I reconcile each account separately. No need to subtract anything
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satcook how do you do this when YNAB puts it all together in your available? For instance is I have $1000 in YNAB as available, that counts let's say $500 for savings. Meanwhile in my checking I only have $500
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Steel Blue Pilot Okay, what do you think reconciling your account means? In YNAB it means going into the account register for a particular account and making sure that the cleared balance matches the cleared balance at your financial institution and then hitting the reconcile button. It has nothing to do with what is available in your budget. Well, it impacts your budget, but the fact that YNAB lumps together all funds on the budget page has zero impact on your ability to reconcile an individual account. In fact, you can only reconcile accounts individually.
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jenmas said what I was about to say. For further reading, here is the YNAB held doc about reconciling: https://www.youneedabudget.com/search/reconciling
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jenmas right which makes sense however it's not as easy reconciling my accounts because my checking includes my savings. So I have to subtract the number of savings from my checking to know what should match my actual checking
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Steel Blue Pilot Your checking account should not include money in your savings account. It should include only money in your checking account.
Do you have both a checking and a savings account, at the bank?
If so, do you have both those accounts represented in YNAB on the left hand side?
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Steel Blue Pilot can you literally explain to my how you are trying to reconcile your accounts? Here is how I do it:
1) I go to my checking account register by clicking on my checking account on the left. I compare the cleared balance in the account register to my bank's cleared balance. I clear any transactions that need to be cleared. When the 2 numbers match, I click the reconcile button in the top right corner2) I go to my savings account register on the left and do the exact same stuff.
3) Go to my next account and repeat.
At no point am I required to look at anything in my budget to reconcile.
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jenmas I think I may not have the savings account in there correctly. It's not on the left hand side. I just have a savings category in my budget. Maybe this is where I am getting twisted around
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Steel Blue Pilot this makes it clear. Every account you have should be set up as an account. All the money in every account should be budgeted. example Chequing account $1000 Savings Account $200 Total $ $1200. You then should have a saving category which has no connection to the savings account balance. You can have Savings budget $600.
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I have a ‘Savings’ category. The first time I added my savings account, I put that amount into the category. After the initial setup everything is fine. If I want to add money to my savings, I add it to that category and transfer balances as needed.
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I guess where I am getting screwed up is in YNAB your savings gets lumped in with your available. Where as in my actual checking it does not. So when I go to reconcile I have to subtract savings in YNAB to get the number that should match my checking
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Hi, Pilot! You have a few options that I can see.
One would be to create a category called Savings and put your Savings account balance there, so you are tracking that money in YNAB.
Or you can remove your Savings account from YNAB so that money is no longer included in your available balance.
Or - and this fits best with YNAB's philosophy - you should consider what that Savings money is really for. Is it a generic emergency fund or rainy day money? Is it intended for something like home repairs or a vacation? Then those categories are where you should track the money. And once your money is in the right categories, it doesn't matter which account it's in because the purposes are all tracked in YNAB.
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Aubergine Quokka so I think you are understanding my issue. I do have a purpose built category but what happens is when I look at my checking it's including all those funds. So when I want to reconcile my checking I have to subtract the savings from it to make it match my actual checking. So my cleared balance equals my savings as well. So when I look into my actual bank savings is not included in my checking so to reconcile its apple and oranges
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Steel Blue Pilot You are still trying to reconcile your budget instead of your accounts. You haven't. set ynab up correctly, hence you have the problem.
if your savings arent in your checking account, then you need to add that savings account to ynab. Two accounts checking and savings, each get reconciled as a separate process.
Money added in either your checking or your savings. account comes into TBB, and you can assign it to your savings category or to other categories, regardless of which account holds the $.
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https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/
A savings account is a type of financial product with certain affordances. Just because money is in that account doesn’t mean it is savings.
A checking account is a type of financial product with certain affordances. Just because money is in that account doesn’t mean it’s not for a longer-term purpose.
Your budget tells you what the money is for. The account balances tell you in which financial product it is being stored. Look at the cleared balance in your savings account at the bank, and compare it to the cleared balance in YNAB. If those match, you’re done reconciling.
If the things you are saving for in your budget don’t have as much available as you’d like, move money until they do. These two things are entirely separate.
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I'm confused. What does the budget screen have to do with reconciling accounts?
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Maybe I'm using the wrong terminology. I think my issue might stem from having a savings category in my budget versus having a savings account on the left hand side where the other accounts are
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Steel Blue Pilot So you don't have a savings account in YNAB. Do you have a savings account in real life where that money actually is?
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Correct. Yes I have a savings. I don't think I realized that you need to actually add the account versus just putting "Savings" as a category.
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Steel Blue Pilot to fix:
Add an account in YNAB, “savings” type, with a balance of $0
Then go to your checking account register in YNAB and transfer the amount that your bank says is in that account. So if the bank says your savings balance is $1234, you will transfer $1234 from checking to savings in the account register in YNAB.
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Steel Blue Pilot
1. Create an account in YNAB to represent your real-world savings account (identical balances).
2. Ensure your checking account balance in YNAB matches that of the real world. See the Reconcile process.
3. Give jobs to any new dollars that show up in TBB by assigning to categories. "Savings" is not a job and therefore not a great choice for a category. Emergency Fund or Vacation or New Car are jobs. They specify the *reasons you are saving*.
In my view, EVERY category in YNAB is "savings". After all, "savings" is nothing more than "delayed spending".
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dakinemaui OP will have to do a giant reconciliation adjustment transaction in checking if they just create the savings account with is current balance. It may as well be a deliberate transfer.
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WordTenor True enough.
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Thank you all for the help. I totally get the theory behind it I was just missing the aspect of actually adding the account. This way I can take the savings and use different "envelopes" for the different types. It won't be a part of my checking which will help reconcile
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Steel Blue Pilot I have a couple of accounts which usually have $0 balances and I still have them in my budget. One where the agent puts my rent and another with a different bank where I transfer the mortgage. They aren’t essential and one day I’ll get rid of them. However I keep them in my budget and show the money coming in and out.
The best approach with YNAB is do what is actually happening in real life!
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Steel Blue Pilot said:
Separating savings (I know, I know)Do you though, really? Do you? 🙂Once you evolve in YNAB, there will be no need to physically separate your savings. (See the link above courtesy of WordTenor.) Categories will do that job. I'm not saying you won't have a savings account with a healthy balance. You should and you will if you continue to follow the YNAB method. The only difference between a checking account and a savings account is the interest earned. Keep enough in checking to pay your bills plus a nice buffer. The rest you can keep in savings and make a little extra dough on the side. Let your categories define the purpose of all funds across all checking and savings accounts.
