How do you categorize Wealthfront?
I've started putting our savings into a high-yield savings account with Wealthfront. But YNAB wants to categorize these as expenses. Our expenses are registering as super high each month when a big chunk of that is actually going into this account. Anyone have a tip on how to better categorize this?
1. Make your HYSA an on budget account.
2. Create a savings category (or a few) if you haven't already. Income Replacement, Home/Car Maintenance, Medical, Vacation, Down Payments, etc. are seemingly common examples.
3. Budget your money into those categories as fits your priorities.
4. Transfer to the HYSA any excess money from your checking account that you want to earn higher interest on. There will be no category attached, because YNAB doesn't care which account your money lives in.
5. Ensure you have enough money in your checking to support spending (after checking the appropriate category first, of course).
Thanks for your reply! I don't think this answers my question though? YNAB automatically adds Wealthfront to the Tracking section, and any money I transfer to it registers as an expense. So when I look at my month's expenses, it looks like I've spend the money which I in fact moved to my savings.
How can I change that?
Slate Blue Guitar said:
YNAB automatically adds Wealthfront to the Tracking section
Add the account as an “unlinked” account. This gives you a choice of account type. Choose Savings. You can link it afterward. The issue is that Wealthfront is usually an investment account that you generally do want as a Tracking (investment) account (if in YNAB at all) but in this case you’re using it as savings account.
I am honestly still confused. My Wealthfront savings account is also on-budget. When I move money from my checking account to the Wealthfront account, I use the transfer option in the "payee" field. This prevents me from taking advantage of the goal setting feature for categories on the main budget page. How can we better categorize Wealthfront so that we can take advantage of additional features like goal setting without making our expenses blow up? I would like to do the same for my Wealthfront IRA too.
Should I make a new post? I think our questions are similar but who knows :D
This prevents me from taking advantage of the goal setting feature for categories on the main budget page
If by this, you mean that your transfers do not allow you to categorize them, then your HYSA is actually correctly on budget.
Read this to understand why and how to meet those goals:
repeat the above in my Wealthfront savings budget
Here's where you need a paradigm shift:
You only have one budget. It includes all money in your accounts - checking, savings.
Is there a method to set goals for on-budget savings accounts that I've completely missed?
When you get the money, budget it into the budget cell for your savings category.
If you, like me, had savings pre-YNAB, but didn't put that savings amount into your savings categories at the very beginning when you started your budget, you have some rather annoying (possibly painful) reallocations to do.