How to set up a long term savings goal where I already have a significant amount saved up?
I am saving up to go to grad school and recently started on YNAB. My goal is to have $120,000 saved up by the time I go back in 2 years. I already have $60,000 currently saved up towards this goal. Does anyone have any tips on how to best set up this goal and allocate the amount already saved up in YNAB?
Congratulations! That is a fantastic goal and your progress is amazing.
All I can share with you is how I would handle it. I would keep my savings off budget, just treat monthly savings as an expense and track it separately on a spread sheet. My reasoning is that I want to see what saving $5 at the grocery store does for my monthly budget. With $60K already there, that $5 gets lost. This is how I track my larger goals, like replacing my vehicle when this one dies. Sometimes it gets complicated keeping these larger goals off budget and it's worth it to me, so I can still see what my little savings every month does to my budget. On-budget, I track what I "spend" in that category so I have an idea of what I am saving.
1 Set up a category called something like 'grad school'.
2 Set up a target category balance by date goal for $120k with the correct month in 2021.
3 Budget the $60k you currently have straight to that category. This will reduce the amounts you need to budget in subsequent months. Once the money is in the category it stays there until you spend it.
The target category balance by date goal calculate how much you need to budget to this category each month. It assumes that you budget the same amount each month but if you vary the amount budgeted each month, it will recalculate the amount. So when you put the $60k in this month it will calculate that you need to budget 60/24 for each of the next 24 months (if it's exactly 2 years).
If you know that the amount that you can budget will reduce closer to the due date, YNAB cannot know this so you will need to compensate for this by budgeting more now.
into September to set the goal so that it doesn't show as underfunded throughout.
[If you've already budgeted the $60k in August it might be easier to go into September to create the goal.]
Where you choose to keep the money whilst saving it up is a different question and does not affect how you would budget it. I would very much recommend keeping it ON budget.
With $60K already there, that $5 gets lost.
This is really not the place for this argument but how so? The $60K is safely tucked away in the Grad School category. You are missing out on one of the best parts of YNAB and instead budgeting by account. Let your categories define the purpose of your funds. No off budget complications necessary.
Here is a link to my overview with how I set up YNAB for my son's university. A few key points that may be helpful in that post. 1-I originally did not put the existing savings as a budget account. I later moved it from tracking to budget and that is much better. 2 - I realized that I didn't need the whole amount all at once before he started school. So I set up a category group called university and then in that group, I set up separate categories for each semester, each with its own funding goal. 3 - because of Matt's accident and inability to work, we decided to take the offered loans since they don't start charging interest until he graduates. The money gets paid direct to the school, so I set it up as a tracking account rather than a budget account and I just budget the difference. But this approach ensures we remain aware of the total loan amount.