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? 

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  • 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.  

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  • 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.

    https://www.youneedabudget.com/the-relationship-between-your-budget-your-accounts-its-complicated/

    Reply Like 5
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
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      I endorse the monkeyhanger method laid out here which is the tried and true YNAB way to handle it. And yes, you want the safest return on these funds in the meantime. You can get over 2% in an online bank or money market. I recently signed up for Betterment's Everyday Savings account which is currently paying an introductory 2.44% interest. (That sounds like an ad but I have no affiliation with Betterment other than being a customer of their new savings account. I used to use their investment services but moved to Vanguard to avoid Betterment's AUM (assets under management) fees.

      Reply Like 4
  • MsTJ said:
    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.

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      • MsTJ
      • Gray_Nomad_f6eeb59e1a1c
      • 3 mths ago
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      Superbone To each their own.  It works for me. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 3 mths ago
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      MsTJ Many roads to Dublin, but it's not the best way to do it using YNAB.

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      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
      • Reported - view

      MsTJ Fair enough but consider giving it a try if you haven't already. I like the YNAB method of categorizing my funds so much that I went to the other extreme and added my taxable Vanguard brokerage account to my budgeted accounts. (Disclaimer: This practice is not for everybody and you have to be able to handle market volatility.)

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      • MsTJ
      • Gray_Nomad_f6eeb59e1a1c
      • 3 mths ago
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      Superbone I have used YNAB for years.  Have celebrated great success, but the smaller detail is getting lost.  Plan for the end of this year is to remove the excess going forward.  I am feeling rich, even though I know I'm not.  My goal is to get back that feeling of scarcity as that is what I respond to best.  At this point, I am getting sloppy with my spending, I can afford it, why not, when tempted at the store. There are too many categories I can WAM from to pay for it.  

      Reply Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 3 mths ago
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      MsTJ I totally get it. Just make sure you don't miss seeing the forest through the trees. You worked hard to get ahead. You are allowed to spend on your priorities without guilt. 🙂

      Reply Like 1
  • 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. 

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