What workarounds do you use in YNAB?

Some examples of the way I've been tweaking YNAB to suit my situation, in case they help others. If any of these have pitfalls down the road I'm not seeing, I'd like to know. 

PAYCHECK DEDUCTIONS: 

Problem: A lot of ordinary expenses get deducted from my gross pay, including my train pass, my home and car insurance and prepaid parking fees. This is an advantage because some of these items and paid pre-tax or discounted through my employer. However, I want to track these deductions because they are part of my living expenses; it has always bothered me that with the previous tracking software I used, I had no system for doing so.  

Solution: I set up an account called "Net pay". Of course it doesn't really exist. But I record my gross pay as income to that account, make each deduction a budget item, and 'transfer' the net pay to the actual checking and savings account to which they go. 

Issues: Kind of a time-consuming operation, but since the deductions are usually the same each paycheck, I've automated them as much as possible with repeating transactions. I also like doing this because it forces me to look over my paycheck, and reconsider the deductions every two weeks, which is probably a good practice to get into. 

 

CHECKING ACCOUNT BUFFERS 

Problem: I have a few checking accounts.  One of them has a minimum, and if the account dips below that I get charged a fee. Another account, which is specific for travel,  has an ATM card that works around the world. I like to keep a set amount of money in it, so that no matter where I travel, I know I can tap into it should there be a need. 

Solution: I set up budget items that are buffers or minimums for each of these accounts. Under YNAB, it theoretically doesn't matter where the money "lives", but for my purposes it does. Each budget item lists the account and recommended amount in the title so I won't forget/make any mistakes. 

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  • I am going to chew on #1, though it looks totally fine and rational to me. In fact, it is maybe just more representative of the whole truth. Are you budgeting for taxes and everything?  What a great way to track something that is often rather hidden. I am not sure it's even a workaround, really, since you do earn all that money -- it just gets portioned and allocated before a net-income payment gets transferred to your bank. Which is what your account reflects.

    For #2, I would argue that it's not a workaround at all, but a good and proper use of the system: the buffer amounts have been assigned jobs, namely, holding the line against withrawals below a certain point. Good job!

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    • Beige Hail Yes, every deduction from my gross pay gets recorded, including taxes and retirement funding. I've tweaked the mechanics of how I do this since my original post, but basically, each one has a category of its own. Thanks for your answer! Yes, it's made me very aware of everything that is removed from my pay, particularly since I manually enter it all. In fact, this motivated me to seek out less expensive auto and rental insurance, something I'd been ignoring before. 

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  • You can do paycheck deductions in a split transaction. No need for an extra account. You then will have to go back into your budget screen and use the additional income above net to cover the overspent categories.

    I don't do all payroll deductions, but I do include 401k, HSA, (categorized transfers to off-budget), pre-tax commuter benefit (transfer to on-budget), and Mrs. nolesrule's at-employer gym membership (expense).

     

    For the account minimums, I would think that the emergency fund would suffice to cover all of them, unless you have some very large account minimums. I don't see the need for an extra category.

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      • jenmas
      • jenmas
      • 1 yr ago
      • 4
      • Reported - view

      I agree with nolesrule on the account minimum thing. When I first started in 2014, I did have categories for account minimums - $1200 for checking and $250 for savings. But those total up to about 6% of my Loss of Income category. If I am at the point that I am down to the last 6% of my 6 month loss of income funds, well, then I have big problems and I should be switching to a bank with no required minimums because I can't afford a bank that does have minimums at that point. Plus, having a category with the required minimum doesn't actually prevent me from taking too much out of my account as location and purpose of funds are two different things. I rather quickly redeployed the funds in the minimum categories to categories that actually needed the funds.

      Reply Like 4
    • nolesrule Thanks for sharing your thoughts!

      It's been a while since I wrote this post. I have kept my separate categories for account minimums, and at least in the web app, because they are all in one supercategory, I can hide them most of the time, so they don't bother me. (Wish I could do the same in the mobile app.)

      It's true that, fortunately, I have savings sufficient to cover the minimums, and they are unlikely to be spent. And it's also true that I still have to look at actual account balances before I spend large chunks of money. However, in the "give every dollar a job" category, these dollars really do have a very specific job. So it satisfies me to lay it out clearly in this way. If nothing else, it reminds me of what each account minimum is; if I forget, I just have to peek at the categories.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • Reported - view

      doctor_who I didn't realize you'd started this thread that long ago. I saw the date on the first response and assumed it was recent. :)

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    • nolesrule No worries. I was amused to see this thread revived because I'd forgotten about it. Of course I've made lots of additional tweaks and changes to my budget since then, but have been posting less because I'm more comfortable with my choices. 

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  • #1 - I do a recurring Income Transaction - gross goes to "to be budgeted" and the splits will be payments to each deduction. Total will be the net pay. so you will have total trans as net pay, one line for gross pay in incoming and all deductions in outgoing applied to their category. Set these as what they normally are and if any changes then you only need to change the amounts.
    #2 - create a budget category for my minimum balance and name it "Minimum Balance - DO NOT TOUCH" -  lol

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    • kayjenx  This intrigues me and I would like to see how this might work for me but I am having a hard time visualizing what that transaction looks like.  I am not very good with splits so far but I'm a newbie so I assume it will get better.  

       

      Any chance you can screen shot and share what that transaction looks like...even with fake numbers (I don't need to know your specifics LOL).

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      • kayjenx
      • Debt Ninja Trainee
      • kayjenx
      • 1 yr ago
      • Reported - view

      Cornflower Blue Flute In this example I show how to record payroll with 2 deductions. My take home pay is $850 but I actually get $1000 and then they pay $50 to my medical insurance and $100 to my car loan for me.

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  • I have several workarounds, but they are for totally different issues than described in this thread.  When I was working, I always budgeted net pay and lived with all the withholding stuff being pre-budget.

    But the discussion has me thinking.  Now that I'm retired, I control both withholding and estimated tax payments.  Remembering what payments have been made while I'm figuring how much I need to budget has been an issue at times.  Perhaps I should create tracking accounts for FIT and SIT withheld/paid?

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  • Patzer   Since you know the program so well, I am probably confused, but why don't you simply add categories and goals for these expenses?  Something like "Estimated tax payments due x/x/xx" and budget a monthly amount.

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      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 1 yr ago
      • 1
      • Reported - view

      TryingToGetAhead 

      This is mostly an adjustment to retirement.  When I was working, I set up my withholding so I would have a (hopefully small) tax refund.  My estimation wasn't so good, and frequently I gave the state and federal governments a bigger interest free loan than I'd like to.

      Now, I have total control over both withholding and estimated tax payments.  I also run a forward looking estimate of my current year tax return, which changes as interest rates rise (giving me more taxable income), I chase better yield with T Bills than the sweep (more federal taxable income, less NY taxable income), and companies increase the dividends they pay me (more taxable income).

      With this year's resolution not to let the tax tail wag the investment dog, I've sold some assets and incurred some LT capital gains.  I've incurred enough to push some of my qualified dividends and LT capital gains out of the 0% bracket.  So incremental income matters for both federal and state purposes.  While I don't anticipate incurring any more taxable capital gains this year, it is always possible that something will change and I'll need to sell an appreciated position.

      The changing estimate of my tax obligation necessitates changing how much I budget for income taxes, in order to accrue both enough for my estimated tax payments (scheduled to be enough to hit the safe harbor) and an additional amount to cover what I expect to owe over and above my estimated payments.  It's pretty easy to calculate that I will need to accrue $X for FIT and $Y for SIT; the hard part is that I'm an old fart, and I have trouble remembering how much has already been paid and when I last adjusted the budget to come out right at year end. 

      I do have a category for Income Taxes, and I could solve the problem with multiple categories for State Estimated Payments, Federal Estimated Payments, and Tax Due with Return; but I'd rather have a single Income Taxes category.  The math is not beyond me, and having the tracking accounts will make it easier to find the inputs for the math the next time I look at whether I need to adjust my budget for Income Taxes.

      I can work with this.  It just kind of snuck up on me that I need to pay attention to details of tax obligation and budgeting for it, more often than I did when I was working.

      Discussion of long range tax planning omitted for brevity.  Tax loss harvesting is not applicable to my situation.  Void where prohibited by law.  One size does not fit all.

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      • Patzer
      • Retired at age 60. Thank you, YNAB!
      • Patzer
      • 1 yr ago
      • 1
      • Reported - view

      TryingToGetAhead 

       

      TryingToGetAhead said:
      why don't you simply add categories and goals for these expenses?

       Just realized my earlier post didn't address goals.  The short answer is, I use goals of budget $X per month as a budget template, so no other form of goal is available without messing up my workflow.

      The short version of the real answer is, I find goals as implemented in the software basically useless as designed.  I have no quarrel with people who find them useful; they just aren't useful for how I want to budget.

      Reply Like 1
  • I realize I am really late to this party but it is the first time I have seen it. For the account minimums I have a Minimums category that has the total for all accounts. The in each account I have a transaction to the bank for the minimum for that account as an outflow. This shows up in the account and the category. Never clear it and so it doesn't reconcile.

    I do this because some of my accounts run lean. So if I or other half looks to see how much is in the category and then spends when there is enough, we can just look to see how much is in the account and spend from the right account and not have to think about minimums.

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      • gmtom1
      • Cyan_Storm_29e4b8bee341
      • 6 mths ago
      • Reported - view

      Navy Blue Piranha I've never thought about doing the "uncleared transaction" route to enforce not spending below the minimum.  Good idea!

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  • My two biggest workarounds:

     

    1.  Making my credit card accounts checking accounts. Since I am a PIF user and don’t need it, it eliminates the babysitting required to make the credit card category balance stay in lock step with my credit card balance. It cuts out the middle man and makes my CC handling much more streamlined.

     

    2. All income each month is categorized to my Buffer category. Then after all monthly income has come in (I don’t sweat bank interest at the end of each month), I release it back to TBB and budget next month all at once with this month’s income. This allows me to continue to follow previous YNABs’ Rule 4.

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  • I've begun to asterisk budget categories that have a tax import so I can you on them at end of year. The gross paycheck function is right up my alley but I'm not sure I fully visualize how to effectively perform this. The other challenge I have is the way YNAB sums up the net monthly categories instead of detailing reach transaction out. Bring able to print an Excel sheet of each category transaction would be really powerful to present end of year to the accountant.

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