A simple strategy that worked for me.
I'm bored, and I haven't seen exactly this tactic in everything I have read so far, so I'm going to share it.
I don't currently use this strategy because I am just getting my budget going again. You can check out my journal here if you'd like the full version of that story. This tactic, however, has worked great for me in the past, and I will be employing it again in the near future.
I see a lot of people commenting about having to hide their savings from themselves. I do too, in a way, but I go about it differently than I have seen other people describing.
I set up a second savings account in an entirely different bank than the accounts I do my budgeting from. The bank I used before was in a small town, had maybe 6 total employees and really hard to get to hours. They also had online access, but it was so terrible I never used it, and that's a good thing!
I then did the direct deposit paperwork through my employer to put $50 dollars per week (weekly pay cycle) into that account.
The smaller and more old fashioned the bank, and the more of a pain in the butt it is to get to during operating hours, the better this will work for you.
This is the really important part...
LEAVE THAT ACCOUNT OFF OF YOUR BUDGET!
This way you never see that money on a regular basis. Your budget-inbound check is $50 bucks smaller, sure, but it's not showing up as a transfer anywhere, and you don't see it on the budget at all. Over time the amount grows and before you know it you've got a few hundred bucks in there to use for whatever you want. Toys, trips, fun, whatever!
I'm not at all suggesting that $50 bucks is the right amount for you. I have no idea what your situation is, so you'll have to think about that yourself. Even if it's $10 bucks per week and you let that go for two months, all of the sudden you've got $80 bucks to take your girl out to a nice dinner, or whatever.
The point is set up a savings account in a different bank, direct deposit a little cash in there every check, and KEEP IT OFF YOUR BUDGET.
I do this too! Kinda.
I used to have a setup more like yours, with my primary bank being close and then I opened a savings account far away. I had my direct deposit set to go into the far away savings account and would transfer partial funds to my checking account like an allowance, with the rest left to age. Eventually my close bank became too fee laden on the checking account so I left that bank and opened a fee-free checking account with the far away bank. I lived for a bit with the far away bank as my primary bank but found myself missing both the occasional benefits of a close bank and the peace of mind that comes from having a secondary bank account. So now I have that secondary bank account again, only now it's also a close bank.
This time it's not as a savings account but second checking account that I treat as emergency access only. Direct deposit still goes into my far away bank (now main bank) but spare change, small cash/checks to deposit, etc I will put in the emergency account at this close bank. The debit card for this account is left at home and not considered as part of my wallet. Now, this account does require regular scheduled deposits to avoid a monthly fee, so I have my main account set with a scheduled transfer every month. Luckily the minimum deposit needed on this secondary account to avoid the fee is only a penny, but I do one better and transfer myself a dollar lol.
Now, I decided to connect this emergency checking account to my YNAB but after reading on the forums how some people preferred to add their credit cards off budget, I added my emergency checking off budget as well. It does detract from the "out of sight" aspect, but I wanted to at least have it inform my financial overview, yet not my budget.
I followed instructions I read on how to add an account off budget - when adding the account where you would select the account type (checking, credit card, etc) you scroll farther down to add it as a Tracking type - Other Assets. This is letting me see how much is in my emergency checking account without that money being forced into my budget. I can see it but I can't use it - and that seems to work for me!
What's funny is my main checking account is actually the inaccessible one with a faraway branch location, while the emergency one is at a nearby bank. This too though seems to work for me. As in your case, hindrance can be a benefit! Because my main bank is not one I can easily get to, any cash I take out from an ATM I cannot put back. I have to carefully consider how much I really need to take out. If I have cash leftover or am given cash, it goes into my emergency checking account instead since that's the account where I can deposit cash.
I sort of have a weird mix going on I guess ^^;
Haha I track my mortgage but I think I'm going to stop doing that because it goes against my net worth without taking equity into consideration. So while technically my net worth is in the red, it's not even close to being as bad as YNAB shows.
I tried tracking it before, and surely it doesn't hurt to "know" what's in there, I just preferred to not even see it. I have funded entire vacations out of the country using this method. Just let it sit and get fat, read your statements once in a while and boom!
That's fine for now. But really, make your goal learning to respect your categories and in doing so, your own goals.
I had this same conversation when I started using YNAB. I had an account with over a year's income which was designed to help me in my final years of my graduate program. I "couldn't POSSIBLY put that into the budget! I'll spend it all!" I was so offended at the rude people on the YNAB forum who told me I just needed to buck up and learn to spend based on my categories. Clearly, they did not get it, and bully for them that they were in such a great financial place and had such good willpower. I wasn't and I didn't and I didn't need my nose rubbed in it.
18 months later, I was going back through an entire year and a half of budgeting and spending to bring that account on budget as though I'd had it from the start. I had learned to respect my categories and now I wanted to see all my money in one place. Now, I have categories and accounts with more money than I could ever possibly need at once and it doesn't matter. I am not tempted to rob things that are much more important just to have a burger.
That should be your goal. If you need to play a mind trick as you're getting started, fine. But the goal should be to get yourself beyond the mind tricks, to where you can just use the budget. You don't see this tactic mentioned because ultimately, you should be getting yourself to a place where you don't need it--where you stop thinking of yourself as someone who can't possibly control the impulse to spend and become someone who is totally in charge of their money.
Great topic. I believe things got a little side tracked. We all do our best to support each other.
Personally, I like to keep my budget focused on today. If I try to track too many things I can't see what today's choices do for me. My larger assets I keep in a separate spread sheet. Some I put aside before it hits the budget and some I put aside after it does.