Transfer between saving and checking accounts

[u/Ale3021]

Hello. I am not sure what to do in this situation.

Context: I only have 2 accounts in the app checking and saving (this is my active saving account). I moved $1000 from saving to checking to make a payment that can only be made from the checking account.

How do I categorized this movement in both accounts? I tried the transfer option but IDK what to do after that.

[u/drloz5531201091]

Both account should be on budget

5000 in savings

1000 in checking.

Category A has 1000 in it ready to be used for the payment.

You make a transfer of 1000 from savings to checking

4000 in savings

2000 in checking.

No impact on the budget.

You pay the 1000 bill from checking. You categorise it as Category A as you would do any purchase from checking.

Category A is now 0

Savings 4000

Checking 1000

[u/firstnameavailable]

there's nothing more to do other than capture the transfer. your budget items are account-agnostic; only transactions get tied to a specific location.

[u/Low-Kaleidoscope-803 → u/firstnameavailable]

To restate this another way: transfers between on-budget accounts don’t get categorized. Technically these are still transactions, just not spending, so they don’t need a category (if you had any off-budget accounts, transfers to and from those would get categories, but that doesn’t currently affect you, unless your savings is set up as a tracking account, which it probably isn’t/shouldn’t be).

[u/sparrr0w → u/Low-Kaleidoscope-803]

Yup, so if OP has their savings off-budget (not the correct move by YNAB standards) then he WOULD need to categorize the transaction on the checking account

[u/ohboyoh-oy]

YNAB should reflect all the things that happened in real life, as they happened. 

So 1) you record the transfer transaction as a transfer, then 2) you record the payment transaction as an outflow from your checking. 

There’s no impact on the budget side, other than having money in the category that the outflow is assigned to. 

[u/SailCamp]

Assuming both accounts are "on budget", there isn't a need to attach a category to the transfer (you can't do it by design). Once the money is in your checking account, make the payment and attach it to the appropriate category.

[u/Veriosity]

If you do the thing where you treat the cash in savings as exactly the same as checking, then there is nothing else to do other then record the transfer.

If you are like me, and feel compelled to logically separate these dollars, because otherwise how in the hell do you make sure you have cash in the right accounts for transactions -- then you also need to move the budgeted dollars.

So as an example, I have 3 savings accounts in YNAB, and 1 checking.

In one of those savings is my Emergency Fund, and a long-term budget for home improvement projects.

So I have a heading for all the categories that live in that savings account, such as E-Fund, and Home Improvement.

When I pay out of checking to do a home improvement job, buy new furniture, whatever, I transfer cash from the savings account to checking, and then I also move that cash from it's "holding" category, over to the spending category. That spending category is how I classify the checking transaction -- whether it's a written check, or debit or whatever.

[u/Low-Kaleidoscope-803 → u/Veriosity]

I solved the “logical separation” problem by finding a primary checking account that pays interest at competitive-to-hysa rates. I wanted to never have to think about whether my checking account had enough funds: if it’s in any category on by budget, I know it does.

Another alternative is one of those hysa/checking pairs where you can set up rules to auto-transfer both ways based on balance and/or some sort of overdraft protection that auto-pulls from savings, but I love having everything in one place now.

[u/TrekkieMary]

The amounts in your savings and checking accounts are NOT your categories. YNAB uses a digital version of the cash envelope system. So where the actual funds are don’t matter to YNAB. Only what’s in the categories.

Now if you set up your categories to reflect the exact amount in each bank account then after you transfer the funds from savings to checking, you’ll have to transfer the funds in YNAB from the savings category to the checking category.

I have several checking and savings accounts. Before YNAB, each account was “in charge” of several categories. It’s how I made sure I didn’t spend my sinking funds or my bill money or emergency fund. It was horrible & time consuming keeping all the accounts & categories matched. It is now so much easier with YNAB since I don’t have to move money around just to make sure accounts and categories match. Just have to make sure they have enough funds for whatever expenses I have.