Personal & Business Budget

I'm been using YNAB since November 2014 and haven't missed a single transaction so far :) 

Absolutely love YNAB and it's really changed my finances for the better. 

I've a couple of questions, which I'm sure someone will be able to answer for me. 

1. Should I have a budget for personal and a budget for business? 

I've only ever had one budget - combining both my business and personal stuff all-in-one! 

I own a small digital marketing firm with a few full-time project managers and a few part-time freelance writers. 

My clients pay me various amounts each month - into two PayPal accounts (depending on the client), a Transferwise borderless account and also a personal bank account. 

As you can see, getting paid into various accounts may make the process of splitting up my budgets a bit confusing! I'm not sure it's even possible with my above set-up?

TIA for any help. 

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  • A business should have separate accounts from those you use for personal finances and also a separate budget.

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      • Khaki Storm
      • YNAB book topics online:
      • Khaki_Storm.1
      • 2 yrs ago
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      nolesrule agree 100%

  • I’m a sole practitioner with a small law practice. I tried using two budgets with YNAB several years ago and it was too cumbersome. Of course I have separate bank accounts for business and personal and I don’t have a trust account for my practice because of the nature of my work, but I finally did away with two budgets and it works just fine. I set up a group called law office and track those expenses. When I had two budgets I had to figure out my draw and then count it as income in my personal budget. In reality I often use my business bank account for personal expenses so it made sense in the end for me to use one budget. I do my accounting for my business bank account separately of course but for purposes of a budget it didn’t make sense for me. Budgeting is not accounting and in my case anyway it’s more workable to just have one budget. 

  • I keep my business budget (even though it's not much of a business, sole proprietorship for consulting work) separately from my personal budget and savings and I honestly wouldn't change it. My method is kind of complex, and I wrote about it on reddit in the past:

  • Hi Spring Green Mermaid ! No missed transactions since 2014?! That's quite a record.

    When I ran a small business, I found it easier to separate my business & personal budgets, and accounts. Keeps it simple for taxes too!

    Check out this article on how to set up a business budget as well as the Using YNAB for Small Business workshop. I think you'll find them both really helpful!

  • I have to +1 those who are encouraging business owners to keep their business accounting separate. If you haven't yet felt the need to keep your business budget separate for any reasons based on accounting, financial, tax, auditing or legal purposes, at some point you're likely to. When it happens, you'll wish you did it sooner.

    But even if you're okay whistling in the dark about those risks, there's good reason to do it before you feel them when they hit. And that is that you can use YNAB's built-in tools for your own business management purposes. Yes, even though they were designed for personal "budgeting," or as I call it, cash-flow management, they still work great for a small, simple business.

    I don't find it cumbersome to have separate budgets. I did have to figure out how to manage the movement of money between us personally and our businesseses, specifically, draws/capitalizations and reimbursements for personally-incurred business expenses. The double-entry accounting needed for each transaction, posting it in two budgets, must be done manuallyl, but that just helps remind me how the money is flowing between my businesses and our personal books. And it's usually only two transactions a month (a draw and a reimbursement of personally-incurred business expenses).

    I run three different businesses, all with their own YNAB budget. For the two more simple businesses, it's very easy. For the more complex business, we're already using Freshbooks for invoicing and expenses, so to keep YNAB accurate, I just post monthly rollup/summary amounts for expense categories. So though I can't recommend YNAB for a complex business, if you're already using your personal budget in YNAB for your business, it isn't that much more complicated to put it in its own budget.

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