I am confused...literally...confused. why would I budget my savings account. it literally is a savings account. I put money into it not take money out. YNAB makes the savings account money part of the budget to spend. this literally makes no sense. is there a way to turn off that so it is not in the budget. Savings should default to not being spent and be the other way around where you are budgeting to put money into the savings account and not the other way around.
What are you saving for?
Make categories for those things and budget your savings money to them. Then, don't spend it.
Your budget is not just for spending. It's the plan for all your money. Some you'll spend on bills, some you'll spend on contingency expenses (save that money until it's needed). Some, you hope to never spend.
Some common savings categories include the following:
Income Replacement, Medical, home maintenance, car maintenance, veterinary, vacation, technology replacement, etc, etc.
A savings account is merely a place to store money. Your budget is merely your plan for your money. I have a budget line item called Loss of Income that at its current level should last me 6-8 months. My hope/plan/desire is to never spend from that category but I should still budget for it right?
Why are you putting money in your savings account? So that you can have enough money on hand to fix your roof if a tree crashes down on it? Then create a Home Repair category and allocate funds to it. Or maybe it's so you can pay for your kids orthodontia in a few years - in that case create a category called Braces.
Also in YNAB the location and purpose of money are 2 different things so don't get yourself frazzled trying to match category balances to account balances (Read This). It's just extra work. I make sure that I have $X in my checking account on the first of every month and then anything else goes into my savings account. I can't tell you that the money in my Christmas category is in my savings account and that the money for my Entertainment is in my checking account because that's not how I break up my funds.
Money is saved until it's spent. Storing it in a higher rate account doesn't make it any more "saved". Put it in a piggy bank if you like, and it's still saved. The point is to plan so you don't get caught short or over estimate what you can buy/do with that amount (VERY common).
As others have said, WHEN you actually spend it is up to you.
It took me a while to grasp the idea that location of money had nothing to do with the budget. It was actually a freeing experience when that light finally turned on. As others have said you should budget all money from your on budget accounts, you can actually set up a category for savings and budget your savings amount to that category. The budget simply brings all money into accountability. Do not get caught up in trying to maintain the your savings category amount with your savings account balance either, there is no need for that. Once you grasp the idea you will be moving money around between your budget categories anyway. I included the YNAB links below that has a better explanation.
As others have said, what are you saving for? If you don't specify what you want, you'll think to yourself, OK, I have $x.xx in my savings. That means I could repair my car if the transmission goes out, OR I could put braces on my kid in a couple years, OR I could replace my refrigerator that is getting old. OR etc. etc. However, what if those become ANDs? CAN you replace your car, and your refrigerator And your water heater all at once? On the same month that you lost your job? That's why you put them into categories, so you can see exactly how much you have, and what it could be saved for.
Obviously they're not set in stone, if you have saved up for refrigerator, and the transmission goes out, you can move funds from house repair to car repair. You'll just have to start saving up again for both categories, to cover the next related emergency.
And really if you think about it, your monthly utility bills are really "saved" until you pay them, right? Just for a much shorter time. But that's what the categories in your budget are for. To hold money until you spend it.
Violet Cello said:
then it will say you have a positive amount left over and did not budget correctly
I think this is the immediate crux of your issue.
Having a positive available in a category simply means that you have that much money saved/earmarked/allocated/sequestered/etc. for that particular purpose.
In fact, if you want a category to grow over time, you need to do that.
Zero-based means that TBB is zero because your categories hold all your money. Zero-based does not mean that the categories should also be emptied each month...
Take some free classes to learn how YNAB works.
Violet Cello said:
Superbone and others saying you don't have to spend it, or just make a category for spending it. I don't think you all have ever used this app with a linked account before. This program expect a "zero sum" account or zero remaining "to be budgeted" each month or it says you are wrongly budgeting.
Let's see. I'm not sure where to start. I first bought YNAB in July of 2008 and I've been using it ever since. I'm what you might call a YNAB expert. And all of my budget accounts are linked. So, now that that is out of the way, yes, you should always budget To be Budgeted to 0.
That has absolutely nothing to do with spending. When you budget TBB to 0, all your budgeted funds are dispersed among your various categories. These categories have various purposes. Some are to be spent soon, some to be spent later, and some to be spent maybe never aka long term savings.
My Groceries category hold the funds I plan to spend this month. My Christmas category, I don't expect to spend most of it until December although I might buy some gifts along the way. My House Maintenance category is ready to be spent only when issues arise with my house. My Income Replacement fund which contains six months of salary, I hope to never spend for that purpose but it's there just in case.
I hope that helps. Keep asking questions and you will get there. This is the best saving and spending plan software methodology you could ever use.
Violet Cello said:
This program expect a "zero sum" account or zero remaining "to be budgeted" each month or it says you are wrongly budgeting.
I’ve been using YNAB since 2014. I have 3 checking accounts and 3 savings accounts on budget. My TBB is always zero. My category balances build and build each month as the unspent available rolls over from month to month. I am using YNAB as intended. One thing though, I don’t use goals, so I don’t have any warnings about underfunded goals in my budget.
I think I can relate to Violet Cello . I have a Linked Checking Account and Linked Savings Account. I am using categories for Budgeting and its working well. I have saving categories for vacation, emergency fund, etc. Currently my linked Saving account has $2000 in it. It is not allocated to any budget(yet). If I want to allocate any of the $2000 to any category, I need to physically transfer from Saving to Checking and then allocate to say Vacation Category...but my Saving Account is depleting. If I move all of it, My Savings account drops to 0..when I have to maintain a minimum balance. I am not sure how this works. My $2000 in my Savings is not working for anything. What do you do in this situation? I really don't want my Checking account increase to $2000 knowing I have that money available. I currently show a running balance on the side of my budget screen.
ok I did a simulated budget based on the article... It totally makes sense now. I tried to fix my original budget to compensate, but ended up screwing it up. I had to built a fresh start budget. It totally makes sense now.. It unbelievably make sense now. !! . Can't believe I didn't see it at first.. thanks so much everybody for making me see the light.