How to Level Up Your Savings
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- Опубліковано 2 чер 2024
- The first rule of YNAB: give every dollar a job. This rule is so, so very important that we built our whole budgeting philosophy on it. So then why do we dump all our savings dollars all together into one "savings" category and call it a day? Kick back with Hannah as she shares how to think about our savings dollars, how we incorporate them into our budget, and how we can protect our savings dollars to reach our goals sooner.
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TIMESTAMPS:
0:00 Intro
0:14 What's the purpose of our savings account?
0:58 Savings isn't an "account," it's our goals
1:27 All of our dollars are savings dollars
2:00 A common budgeting mistake
2:42 Banks accounts vs. budget categories
3:13 What is a budget?
3:58 [Step 1]: Add savings goals to your budget
4:35 [Step 2]: Add targets to savings goals
4:54 Targets ensure you reach your goals
5:45 Dollars by location vs. dollars by job
6:45 [Step 3]: Add savings accounts
7:18 Why not just create a "savings" category?
8:08 [Step 4]: Fund your goals
9:23 Budgeting for specific goals protects your dollars
11:07 Condense your savings accounts
14:06 Outro
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This video needs to be bumped up in a tutorial playlists for first-timers. This is the budgeting theory that I've always needed.
Oh, that's so encouraging to hear!! Thanks for the freeback! I'll pass it back to the team :)
-Hannah 🌻
This is the best explanation of YNAB philosophy in actual practice that I have seen so far. I have gone through all of the videos on the YNAB site, and all of the tutorials. and most of Hanna's videos. Using YNAB for 8 years now, so fairly comfortable with savings being the upcoming expenses in each category.
Wow, that's so great to hear, Bruce! That was the hope, so your feedback means a ton!
-Hannah 🌻
Same here. Been around since YNAB4 and this was the clearest and smoothest explanation. I literally have had issues handling savings on my budget until this very moment. Massive kudos.
So 2 videos from Hannah within 2 days?
I'm in!
Woohoo 🌟
Fave moment at 10:22: No, no! Love YNAB and Hannah and the informed control I have over my money. It's not a budgeting app. It's a peace of mind app.
So I had a bunch of savings accounts, closed them all and opened an Ally savings for the higher interest rate. Then I created a separate YNAB budget just for my savings. So now I have a YNAB budget for checking and one for savings. I tried having just one budget, but it was too overwhelming for me. 😂 I can see my money more clearly in the 2 separate budgets. Also, the separate savings account works for me because now if I want to spend from my savings, I have to transfer to my checking and I like that there is a delay before I can spend that savings money. 😊 (I’ve only been using YNAB for about 6 months so maybe this will change)
Are you happy with Ally? I have been on the fence
ANOTHER Hannah video??? Wow, just what i needed for this friday!!!! 😍
I am totally fangirling over Hannah. She makes personal finance relatable and fun. 🥰
Haha, THANKS!! The only way to do personal finance is relatable and fun. Otherwise it's just personal finance. And that's 🤮
🌻 Hannah
This was a great video! I used to have multiple checking and savings accounts to help me keep my money organized, but as I’ve gotten started with YNAB I’ve realized it’s really not necessary. I’m basically down to 1 savings account and 1 checking account. My payroll deposits into my savings account, so I just age all my money in there. Based on my YNAB budget, I transfer money into my checking at the beginning of the month to “fund the month”. Having a lump sum in one account all mixed together feels kind of scary at first.. but that’s why you’ve got every dollar assigned in YNAB!
Nice! Yes! It's kinda scary to do things differently than what we were traditionally taught, but YNAB gives me so much dang security I've condensed my bank accounts to just one checking account and one savings account as well. All my two-account ladies: unite!!
-Hannah 🌻
I really liked the mindset switch when I heard to think of “funds” instead of “savings”, and I feel like the message of this video is very similar.
I always felt I was losing progress whenever I needed or even planned to spend from my savings. Using a budget and setting specific goals/funds helps me make more consistent progress toward them AND I feel less guilty when I spend according to my plans. Love it!
Yes! You know what each of those dollars are for, so it doesn't feel *quite* as hard to spend them when the time comes around. I'm with ya on that! Feels safer too. I can see the individual progress on each of my goals, which is more satisfying than just having one vague ol' pile o' savings dollars.
-Hannah 🌻
Thanks Hannah! I’m somewhat new to YNAB… I had an emergency savings and an “extra savings”. I redistributed the extra savings to things I was saving for. Great video!
Yay! Thanks for watching Melanie, I'm so glad it helped! Budgeting for specific savings goals is one of the things that makes YNAB feel so magical. You can physically see each of your dreams getting funded! I love it!
-Hannah 🌻
Very well structured and clear video that also addresses the possible fears people may have, and doubles down on the paradigm shift YNAB is looking to accomplish. Very cool! BTW, I've been living on just one bank account, while being financially much more responsible, for over 2 years now, thanks to YNAB 👍🏻
YES! That's amazing!! Wild how, when it comes down to it, it's all about the budget, right?!
-Hannah 🌻
I love that YNAB categories make multiple bank accounts redundant.
Sort of, there are a lot of reasons to have multiple bank accounts, what this does is make it so that you don't have to have so many of them. If you're doing it right, the likelihood of overdrafting on a dozen accounts versus just a couple isn't really any larger. The inflow and outflow should be done through only one or two of those accounts and if you make all payments of a given type at the same time, then there's not that much transferring to do either.
The main pro/con of having multiple savings accounts is that there's usually going to be more money in each of them than you really need to be there. It ensures that the money really is there for that particular goal, but may not be available to other goals without a conscious redirection via transfer.
Just coming up to the beginning of my second month using YNAB as I started mid month . I have never felt as in control as I am now and already seeing a difference in my bank balance . I was a pay check to pay check person but no more !
WOW!! Marion, that is such sweet, sweet music to my ears. I know exactly how you feel. My budget has never felt so glorious and superpower-y as when we bought our first house a couple months ago. We're keeping WAY more money than I thought we would every month, and it feels SO good to have categories building up for home repairs and home improvements and projects. Makes SUCH a difference!
-Hannah 🌻
Hannah got that "i'm married now" glow about her!!
😎
-Hannah 🌻
Excellent video and well done breaking it down. I do keep my emergency fund separate, because it's earning conditionally higher interest based on no withdrawals. My checking account is interest bearing too, so that's where all my "sending/savings" dollars live, such as what YNAB calls True Expenses: saving for car maintenance, the annual Costco/Amazon Prime/Disney+ membership, summer camp for the kiddo, etc.
So for me, the issue is always where I save for something such as a bill which is paid each year. I have savings accounts because they pay interest.
I might transfer say 1000 from my current (checking) account each month to my savings account and I budget out the categories.
The problem is you can't make payments direct from a savings account so when my bill is due, it is taken by direct debit from my current account. I then need to transfer the money from my savings account to cover that otherwise my current account will go overdrawn (even though my budget says otherwise)
This gets even more tricky if transferring money that ultimately should be covered by different savings goals as there is no way to do sanity checks as the budget just pools everything together as available to spend.
I'm trying to consolidate but the reason why people have different savings accounts is because they pay interest and some more than others depending on the account.
I’m with you. The issue with just ignoring which account the money is in is that bills and spending come out of checking.
If I go confidently swipe my debit card for a travel purchase where the dollars are in my savings account, then my rent check will bounce. Bc it actually does matter which account they’re in. I want to trust that my “available” dollars in each category are available IN MY CHECKING account, otherwise they are not actually available.
My emergency fund is another matter entirely, and is in its own savings account, the job for those those dollars is “sit there unless I call for you, which hopefully never happens.”
And big dollar savings goals like a long Europe trip don’t belong in my checking account. It’s too much money to just be sitting in an account that gets exposure to vendors or other credit card companies. Those dollars aren’t “available” for spending, Bc they’re not in my spending account!
The US government needs to use YNAB.
I cant express how helpful ynab is and these videos are really helping me understand the mindset behind how to manage money in a super healthy way. thank you!
YAY!! I only teach it because it's changed my life too!! SO glad to be here and help others do the same!
🌻 Hannah
This is really exactly what I was needing right now!
Loving this new background and environment. Keeps it fresh
You answered my question from the last video! Very helpful!
Oh, woo hoo! That was easy :P
-Hannah 🌻
Thank you for this video! I use this technique for shorter term savings like for a vacation or some once in a year expenses. These could be called sinking funds I guess. However I keep long-term savings on a tracking account. I have an 'investments' category under which I transfer money from 'ready to assign' to that tracking account each month. The point here is that since these savings are not for any particular purpose at the moment it is better not too see them as ready to assign at all. In a similar matter I keep the emergency fund on a tracking account as well. Since it is for emergencies I prefer not to see it at all during normal budgeting.
You are awesome! Your delivery helps me understand where other videos do not. Keep it going!
Hey, thanks Anthony!! I love to hear that!! I sure will!!
🌻 Hannah
Keep ‘em coming 😎
Exactly what I was looking for!!
I just love your tutorials! Awesome job, this is sooo helpful!
THANKS Joy!! SO glad it helped you out! It helped me out too 🙃
🌻 Hannah
I was considering opening a savings account for putting money assigned for true expenses, but I'm now pretty much convinced that it wouldn't make any sense having to transfer money back and forth, plus most of the basic savings accounts at my bank pay very low interest and charge for transactions. I do make semi-monthly contributions to a TFSA (a Canadian registered savings account) that has mutual funds, so the money can really grow there but it's often a hassle to withdraw from the account and you won't see the money you withdraw for two days or more. I consider that to be my emergency fund and something for longer-term goals (I also have a separate retirement fund that I contribute to monthly) and the contributions are in my budget as an expense.
This is great Hannah, thanks! I'm not ready to take the plunge to put all my money in 1 checking account (have had my account compromised before and am too scared of losing the money) but eliminating my extra savings is something I want to do. The thought of less juggling around is so freeing.
Yes! I should have clarified that I don't necessarily think we should all condense our money to one account, but more so making the point that YNAB makes having multiple counts obsolete. Less juggling around is RIGHT. Why the extra work if I have my budget doing the sorting for me?!
-Hannah 🌻
The whole condensing your savings accounts into your checking account concept is a new one for me. One of my friends does it (she also introduced me to YNAB) and said it’s possible to have all your money in your checking account and then divide it up in YNAB so you don’t spend what you didn’t budget. I told her she’s crazy…..but I might be coming around to this concept haha.
It is kinda wild! Checking and savings have been equated to peanut butter and jelly-you never see one without the other! But the budget makes having a bajillion accounts obsolete. I love it 🥰
-Hannah 🌻
My mind is definitely blown! I am going to try moving a chunk of my savings money to my checking account and leave it in the same category. This seemed scary at first, but I think it’ll be a good trust exercise for myself! Plus, no more accidental overdraft fees 🙌🏼
This was definitely a video I needed. I have been using YNAB a little over a year now, but never have understood how to put savings into the mix. I love Hannah's explanation (love ALL of your videos, Hannah), but I will admit...I can't get crazy yet and move my savings account back into my checking. They will safely stay divided, but now I have an idea on how to address it all in YNAB. Maybe next year??
Oh YAY Brenda, that is just the best news!! YNAB made this concept a game changer for me too. I was 100% a "dump random dollars in savings" girl until I realized how much more sense it made to give them all jobs. Absolute life changer.
-Hannah 🌻
I have been using YNAB for years and I still learn great things from your videos! I will be tweaking my budget and accounts today! Thank you for this video!
So helpful! Thanks, Hannah. And congratulations on your marriage!
I SO love your videos Hannah, they are always so informative I always learn something new. Thanks so much!
Thank you, Kathlene!! Hey, I always learn something too :)
-Hannah 🌻
Great information, as always, but I missed seeing Hannah behind the desk with the cute props.
Oh, don't worry Lisa! These are technically workshop videos, so they're filmed in the workshop styles. Heard it From Hannah will be back in full swing this week after posting a few workshops last week-white background and all!
-Hannah 🌻
Great video Hannah and Congrats on getting married! When I set up Vacation Goals, I only do them as "Needed for Spending" b/c I buy airline tickets and book hotels a few months in advance.
That is a SUPER valid point! It's not often you leave your vacation money untouched until the day the vacation starts. The spending goal won't dock you when you pay for different components of the vacation ahead of the actual vacation date. Smart thinking!!
-Hannah 🌻
Awesome video! The savings I would love to see a video on is ‘savings for next month’ ie. how to budget ahead and not have it mess up your budget in the current month.
I created a "Month Ahead" category after hearing a YNAB employee (Ben, I think} say that's how they handled it, and WAM from there on the 1st of each month.
I budget for this month based on money I have, then bump ahead a month and see how far I can get. Took a little while but if you budget less than you make you’ll get 30 days ahead, so then on Dec 1 you have January fully funded. It is the best feeling!!
2:15 _. . . because a lot of us are probably watching this video right now because we don't know how to budget our savings dollars._
Oh, I know how . . . I just like to watch budget videos. ( -3-)
same, lol. I'm a Hannah-fan :p
😂😂 You and me both, fsmoura!!
-Hannah 🌻
Great video! We've been YNABers for a while, and we're going to draft a new budget. I'm going to incorporate our savings into our budget now that I know how!
YESSSS!! Way to go!! It's a game changer! We LOVE seeing how much we have saved up in our car repair, home repair, vacation, and all those savings categories.
🌻 Hannah
Great, thank you !
I have been with YNAB since YNAB 4 and this ☝️ might be the best explanation I have ever seen for properly using YNAB. Plus, the young lady in this workshop is an outstanding presenter 😎
Hannah, Congratulation on your marriage! I had a question about split categories. Is there a way that a person can make them stay collapsed within YNAB once done? When reconciling I'm always having to collapse my splits and it drives me nuts! Thank you for your videos. I'm gearing up for 2022 and my husband's possible retirement! We have been tracking expenses but have committed to one another that we are actually going to start budgeting!!! Thanks for that video!
Best video ever , it answer lots of questions.
I really like this! Using YNAB, I can choose to save money in a category that I intend to spend on bying an asset.
Yes!! Seeing specific goals come to life is so much more satisfying than one big lump sum savings account. Keep it up, Susanne!
-Hannah 🌻
Thanks for this. I’ve been using this system awhile….. new fresh perspectives here.
Woo hoo! That's amazing! Love that new energy being sparked. Keep rockin' it, my friend!
-Hannah 🌻
great video, Hannah! A topic that is not often covered.
Woo hoo! Thank you!
-Hannah 🌻
Great video ♥️
This is the most important YNAB tutorial video. It must be watched before all others
Love this idea
Great video! It made soooo much sense to me. No more setting money aside for nothing. Just one thing though, if I set my savings up like this on my budget and then the time comes to spend the money saved, do I register the transaction on the savings or the checking account?
Hey there! Great question-you always want to record transactions under the account the payment is ultimately coming out of!
For example, you've been saving up for a new car and keeping those car savings in your savings account at the bank. When it comes time to buy the car, you will need to transfer the money from your savings account to your checking account at the bank before you make the purchase, right? (Unless you have some kind of debit card for your savings account... do those exist? 🧐) And since we always want to record any money movement in YNAB, you'll add a transaction to record that transfer of money from savings to checking within your YNAB budget as well. Then when you do buy the car, you'll record the car purchase in your checking.
I hope that makes sense! If not, you can always feel free to write into our support team for help, or check out some of the other videos here on our UA-cam page!
-Hannah 🌻
Thanks so much for this!!!! I have actually avoided adding savings accounts to YNAB because it "makes me do something with things I want to save!!!" Lol But this is so helpful. Only question I have is why did you choose to leave your savings accounts "unlinked"? I am curious about the advantages or disadvantages of that move. But I have just added my savings accounts back to YNAB going forward and will learn what you have just taught!!!!
Oh, no significant reason for leaving the savings unlinked! I only did that because I can only "link" my personal savings account, and I figured that wasn't the best idea to put that on the internet 😂 So anytime we do a demo, we always use an "unlinked" account for the example just to protect our own accounts!
But YES, doesn't it just make so much sense when you finally break it down?! I was the same way about savings when I first got YNAB 5 or 6 years ago. I added my savings account, but I dumped all the money in a "Savings" category in my budget because I didn't want it to me touched. Now I have every single penny of my savings account budget and it just makes so, so, so much more sense.
-Hannah 🌻
Thank you, Hannah! You did it again! Another excellent explanation, simplifying something that had been baffling me for a while now. THANKS! And congratulations on your marriage!
Woohoo!! Thank you, glad it helped!! Learning this also blew my mind and made YNAB and budgeting altogether make way way way more sense.
-Hannah 🌻
The only backward thing about moving money from savings accounts to a checking account is that you'll lose the interest some of these savings accounts are given by the bank time to time, and if you live in a country where inflation is unpredictable (like me), you will lose money at the end.
I have a different approach. If my goal is more than a year ahead, the money is stored on an ETF account that I have (two really), so I don't lose money because of inflation. When dividends comes in, I distribute them between the categories than I'm saving for.
I have a group for those savings as also a group for savings that are on my checking account (less than a year ahead).
Love you Hannah!
That clarifies a lot for me!!
YES!! That's awesome, Debbie-we love to hear it!!
-Hannah 🌻
OH MY DAYS
Lightbulb moment!
Thank you
WE LOVE TO SEE IT 💡
-Hannah 🌻
Raise ya' hand if you are one of those Homo sapiens who put your savings dollars in a budget category called: savings. [raises hand]
YNAB Hannah out here callin' us OUT! I still am willing to serve as the President of her fan club, however.
Binging Hannah's videos and I love watching her go from single to married! I feel like I'm watching my slightly-more-responsible cousin!
HA! Why thank you!! Just wait til you see what comes NEXT!
🌻 Hannah
My savings are in separate accounts because they are different kinds of accounts. TFSA, GIC's etc. They are under a main account at the same bank. I receive different interest rates and it doesn't take too much time as all my savings are on scheduled transactions. This works for me personally, however I see the benefits for others 😁
Bonjour, j'aurais voulu des renseignements complémentaires sur l'épargne. Est-ce possible et comment ?
7:18 Guilty as charged. 😂 I'll remedy this immediately.
Just what I needed to get my head around how to deal with savings. One issue I think people should consider, though, regarding condensing your savings and checking accounts: Find out if there is a difference in interest paid on savings vs checking. Often, the differences in interest rates are based on the size of the account, but in many cases a bank or credit union does not pay interest on a checking or it's a different rate. So know your bank.
For example, my credit union at present offers these interest rates on accounts:
0% for checking accounts
.05% for $25-$2000 in savings
.15% for $2000.01-$25000 in savings
.25% for $25000.01 and up in savings
So, I'll be keeping my savings and checking accounts separate.
Yes, they're all so different! My credit union actually has a tiny interest rate on my checking, but it's bigger (not by much 😂) for my savings. Neither are worth it to me, but I know some banks have much better interest rates, and in that case having a checking and a savings for money you don't touch often makes TOTAL sense!
🌻 Hannah
Hi Hanna, When I transfer money from my savings acct to my checking acct to pay off my credit card how do I reflect that in my savings budget?
Hey Gary! After you've transferred money from savings to checking at the bank, it's time to record that money movement in your budget too!
To do this, go to your savings account in your budget, start a new transaction, select the payee "To/From:Checking" (or whatever your checking account is called), and then plug in the total amount of money you're transferring as the *outflow.* Then, I believe your budget should automatically generate a new transaction in your checking account, where the payee will be "To/From:Savings" and it's recorded as an *inflow* (because your money moved OUT of your savings and IN to your checking). Approve that transaction, and you're good to go!
If your checking account didn't automatically generate that transaction (I'm not positive whether or not if does that if you don't have any accounts linked in your budget), just create the transaction yourself with the same information!
-Hannah 🌻
This was great, One Issue I have is when I try to delete an account i don't use any longer, I always end up messing up my budget.
That's because there are transactions within that account. Either just close and hide the account, or go through and change the transactions to another account before deleting.
Hey Fred! Here's some help regarding your situation!
If you're closing account using the web app:
docs.youneedabudget.com/article/1268-close-or-delete-account
If you're closing accounts using the mobile app:
docs.youneedabudget.com/article/1684-close-or-delete-an-account-on-mobile
Let me know if you're still needing more help!! Happy to help you get it all figured out!
-Hannah 🌻
You could also fresh start your budget. It keeps your template and account structure but you can clean things up like extraneous accounts and change the budget template and start fresh.
I know this is not about this post but didn't know where else to ask. I can't believe there is not a video on the year end. This is my first year.... was wondering if there was a todo list for end of the year.... Thanks
Check out the Budget Nerd videos - Ben and Ernie discuss this with glee. It’s the high point of the year (especially for Ernie 😉)
Hey Jennifer! Here's a few Budget Nerds episodes that might be of interest to you, like Elizabeth said!
The Yearly Rollover in YNAB:
ua-cam.com/video/0ohE9fLSrLQ/v-deo.html
Making a Fresh Start in YNAB:
ua-cam.com/video/KB1UQuLhsm0/v-deo.html
-Hannah 🌻
@@YNABofficial thanks so much!
I am not at the point where I can dump my savings into my checking yet, and I'm not sure I'll ever be, but that's okay. I first need to get used to meeting my savings goals and I'll probably need to watch this video many, many times.
Hi, I'm new to this. So is is better to add an Unlinked account? Or is it only for demonstration purposes? Towards the end you mention the headache of managing so many accounts that's why you condensed everything under checking?
Hey there! I always demonstrate using an *unlinked* account because I don't want to demonstrate with my own personal account 🙃
But personally, I think linked accounts are extremely helpful! They import the bulk of the "work" for you (i.e. the date the transaction cleared the bank, the payee, the outflow/inflow, and will already have the transaction marked as "cleared"), so all you have to do is choose which category (or categories, if you want to split the purchase up between multiple budget categories) you want the purchase to come out of, and add a helpful memo to help you remember what you bought and what the circumstances were! Anytime a transaction is cleared at the bank, a linked account will import that cleared transaction into your budget, and the red "notification badge" you get on the "Import Transactions" button really inspires me to click it and categorize all my newly imported categories-something I'm not as inspired to do with an unlinked account since there's no "notification badge" to remind me I have transactions to enter into my budget. Linking accounts speeds up the process a lot, and helps prevent unnecessary errors being made! So I definitely recommend linking if you're able!
🌻 Hannah
What do you do when you want to spend the vacation money that you have saved using this method (assuming you have 1 checking account and 1 savings account)? How do you know where the money resides?
The money kinda resides wherever you want it to at the bank! Your budget doesn't care if you dollars are coming from your checking account or your savings account, so it *is* smart to keep an eye on your savings account and make sure you don't have 60% of your money budgeted toward savings categories and only 30% of your money in your actual savings account at the bank. Hence why you could totally condense all of your bank accounts into one mega account, because the distinction between "checking" and "savings" at the bank is kind of irrelevant to your budget.
If you're saving for your vacation in your savings account at the bank, then when it's time to take the vacation you'll transfer it to your checking and spend out of your checking account.
-Hannah 🌻
Ayee like the new backdrop
Do you put goals for non savings categories?
Oh, heck yeah! I assign a target to literally EVVVVERY category in my budget. $735 for "Rent" by the 1st as a monthly spending target, $75 a week for "Groceries" using the weekly feature on the spending target. It helps a ton to know where I'm at!
-Hannah 🌻
All of my dollars are and have always been savings AND spending dollars. 🤯 I'm not actually terrible at saving money.
I will say, I like to maintain a savings as separate from my checkings in the accounts section. This way I can easily cross check the balances with my spending categories. I only ever use checking account money for monthly expenses and some annual expenses, whereas I use my savings account monies for savings goals only. This way, I dont have to transfer money out of my high yield savings all Willy nilly, and I’m able to take advantage of the 4.5% interest rate.
One reason I can think of for keeping a savings account is a way to limit how much someone can spend if your debit card is lost or stolen. That way if someone found a way to drain your account you'd still have some money on hand while you deal with the situation.
Exactly! That's the second reason why I have multiple accounts.
That is wise, Daniel! Not keeping all of your treasure in one spot 👌🏻 I 100% support that reasoning!
-Hannah 🌻
And even when you have it turned off, banks will sometimes pull from your savings to cover an overdraft in your checking. So I keep my savings accounts at a different bank entirely. Ain’t no fraudster getting my efund!!
I am doing my saving right now following your instructions, but both the app and the website are not giving me monthly estimates/ needed amount per month to reach my goal. Is this a change or am I missing something?
it just says either on "track" or "the amount needed eventually"
The amount above the progress bars will change depending on whether you've funded the category that month. To see the target amount on web, select the category and look at the Target section in the inspector on the right hand side of the screen. On the mobile app, tap the category, then tap details.
What about investing? If I’m saving for a down payment for five plus years from now, I want to put money into an ETF or an index fund, not just pile it up in my checking or savings account.
Make it an asset tracking account in YNAB, especially if it's invested and if you won't be withdrawing regularly.
I wouldn’t even add it as a tracking account personally, unless you’re using YNAB for net worth type of stuff. I use mint for all those things and a high level financial historical view. In YNAB, even tracking accounts have all the transactions come in. You don’t have to categorize them but it’s just a pain to me. If you need to, you can just add a spending category to your budget, that is how much you want to contribute to those goals. The transfers get a category Bc the money is leaving the budget
I eliminated our savings account and created two Goal categories in our budget per this video. I was concerned about losing the interest I would earn in the savings account . . . until I realized that unless the interest rate is very high (Nope!) or the amount in the account is big bucks (Nope!), then the amount of interest and compounding is minimal. The simplicity of not having that extra account and its related transactions and transfers to manage is well worth the loss of a small bit of interest.
Wow!! How does it feel? Scary? Secure? My husband said he wanted to do the same last night. Too much transferring between accounts for no good reason! The budget's got us covered 😎
-Hannah 🌻
But what about when you do have big bucks savings categories? Like a fully funded emergency fund will be sizable, and that’s a goal for everyone right? So everyone eventually has to deal with the issue. At that point, what’s your plan? And what’s the cutoff? Like, when I get to $5k in emergency fund savings I’ll move it to a savings account. So then do you have a savings account specifically for your efund? Or do you just have the same exact category but in your savings account now?
@@anniemilakovic7683 This way of budgeting and savings is new to me, but the way I'm going to do it is have an actual savings account with good interest for anything that has a savings goal of over $1000 and more than 1 year out.
So my true expenses and small savings goals that are less than $1000 and 1 year or less away would stay in my checking.
My emergency fund (as it is not something I plan to access often) and any savings goals over 1 year and over $1000 would be in a savings account. Transferring will only take a few days, and the purchases over $1000 and over 1 year are typically things I have planned in advance and typically a one time purchase like a down payment.
I figure up until $1000, the interest rate is usually pretty minimal and it's worth losing out on minimal interest rates for the ease and simplicity. However, your number and time range may be different depending on the size of your savings goals and the size of your typical monthly spending. It may be $500 or even $5000 for you.
Whatever number and time range you decide on, I would just keep that in mind as a guideline.
I would also recommend adding a simple "key" in your budget categories to remind you if each category is housed in checking or savings, just so you can off load that mental load.
Hope that helps. I'd love your thoughts!
Is an emergency fund different from getting 3 months ahead?
Ya know... I used to think so, but these days I've since changed my mind. I did a video on this very topic really recently! I'll link it!
ua-cam.com/video/0_IUfPZhWgM/v-deo.html
🌻 Hannah
What happens when you actually take the vacation. How do you reflect that in your budget?
Assign your vacation expenses to that Vacation category with the sweet satisfaction of knowing you prepared for them! 😎
Once you've taken the Vacation, you can repurpose that category for your next vacation, or hide it. If you have money leftover that you want to send elsewhere, be sure to do that before you hide it.
But yeah, mostly the sweet satisfaction part.😉
- Ben M 🎨
Is the goals category for savings different than the wish farm?
Great question! I use my "Goals" category group for things I HAVE to be saving for-car repair, emergency fund, that eventual vacation that became mandatory after a year of a billion ups and downs. My "Wish Farm" category group is where I save for things that I don't *need* but just want-the fun stuff like a new skincare device, or a pair of shoes I've had my eye on (the stuff that doesn't really fit in the budget anywhere else, but you want to be saving for it!) I hope that makes sense!
-Hannah 🌻
@@YNABofficial yes it does. Thank you Hannah! 😊
Hi from the pnw
I can’t see myself saving for a vacation without making sure my emergency fund is taken care of first. An emergency can happen at any time so shouldn’t that take precedence?
I totally get that! The beauty of YNAB is that it's absolutely up to you what order you fund things and at what pace! Do whatever makes you feel most secure, or reach whatever goals are most pressing.
-Hannah 🌻
Please please please, make this easier for those of us who live in countries where we are paid fortnightly by allowing us to make fortnightly goal settings (no, not twice monthly - fortnightly!)
I'm paid fortnightly (bi-weekly) and it's very easy!
Lots of US people are paid bi-weekly as well. It’s just that our bills are always monthly or longer. I so much prefer the way I get paid now, semi-monthly.
This stuff is so underrated
Dude. Yes. No truer words. 😎
-Hannah 🌻
I put my savings in as a tracking account so I don’t accidentally budget it. Though in past I have added money on top for vacay only to take it out again… hmmmmm…. This is interesting. I have to ponder. :)
I wish the bee Zealand banks offered this service.
It’s October 2022. Did you make it?
Oh yeah, babyyyyy 😎 To both!
For the emergency fund, we hit it early and actually changed it from a savings balance goal to a monthly savings builder goal, adding $50 extra dollars to the category each month!
And as for a one-year anniversary trip, we spent a weekend out at the PDGA World Championship (disc golf 🥏) and had a BLAST! AND, thanks to it being just right down the road from us, we saved a TON of money by not going all out on a big fancy away-trip. Like, a ton. The best of both worlds!
🌻 Hannah
@@YNABofficial I love that! Thanks for the response, Hannah!
Charles
I appreciate all of this, but by transferring all the money from a savings account to a checking account, we lose (even though not much) whatever interest rate we can earn on a high yield savings account. That doesn’t seem wise for funds sitting there for a long period of time.
Right! Valid point, Devon! It's just a matter of whether you value that accumulating interest more, or the convenience of having a simplified bank account more. And savings accounts aren't bad by any means! This was more so to demonstrate that your budget now replaces the main function of having multiple bank accounts (especially for those who have a multitude of bank accounts)!
-Hannah 🌻
@@YNABofficial for sure. Thanks for taking the time to personally reply! I will say, I appreciate your videos - you make the topics even more interesting. Oh, and congrats on (I think) the first year of marriage!
Late to the party here, but I love my high yield savings account that is with the same bank as my checking account, so transfers are instant and super easy. I like to put the savings goals (even the 6 month car insurance one) into the savings account and transfer it out when I need to. With today’s interest rates, I am getting like $15/month interest doing that. 😮😮😮 I could see putting emergency fund money in a different bank account - just to give the extra layer of security by not having EVERYTHING at one bank. I love the categories in YNAB because I was a person that opened like 4 different savings accounts with my bank for different things. I love that it can all just be one account now. 🎉
what app is this?
The app is called You Need a Budget, but we call ourselves YNAB! You can check us out at :)
-Hannah 🌻
It’s me. I have a bunch of savings accounts. How did she know? Lmao😂
As Taylor Swift would say, "You're the problem-it's you." 😂
🌻 Hannah
@@YNABofficial Funny story. After watching this video I closed them all except 4 until I can change some payments then those are going away too. We love your videos.
NO WAY!! Wow!! Talk about proactive! That's amazing. Your budget's got it covered, I promise!! Now hopefully you have less on your plate to manage!
🌻 Hannah
This is a big nope for me (having all the money showing in one account in the budget but isn't really in the bank). I like.
I LOVE having all of my separate accounts and am extremely good at them.
This actually seems more confusing for me.
Your account is linked to your budget. Every category works exactly like a separate account minus the hassle of managing those.
How was the vacation! Where did you go? We'd love to know!
LOL. We ended up scheduling a RIVETING first anniversary trip toooo... 🥁 Emporia, Kansas!! 🥁 Which sounds incredibly lame, but we're both big disc golf fans, and the disc golf world championships were happening *right* down the road from us! So we grabbed a hotel there for the weekend and just had a chill weekend spectating and celebrating a sport we love! Not gonna lie-it was also a LOT easier on the budget, too 😂 All the leftover vacation money we didn't spend has just gone to future trips, like us heading out to Florida for a week at the end of May!
🌻 Hannah
@@YNABofficial honestly these days I much prefer laid back domestic vacations so I know what you mean. easier on the budget and so much more relaxing. my wife and I spent our honeymoon in Portland Oregon because we like Portlandia and wanted to see the city for ourselves 😂 have fun in Florida
Nice!! That's so fun! Growing up in a family of 5 kids, our "vacations" were always just visiting family, so my expectations for vacations have always been extremely low. As fun as it would be to go experience Europe one day, we laughed just as much in Emporia and have tons of great pictures and keepsakes from that weekend! I wouldn't trade it for anything.
🌻 Hannah
She is a rule one kind of gal.
What can I say 🤷🏻♀️🙃
-Hannah 🌻
Always one for the apocalypse 😅 😆
so you dont need a savings account?
Technically with YNAB, there is no actual need for a savings account, as you can designate which of your dollars in your budget are going to all your savings goals super easily. BUT a lot of people like to keep a savings accounts for an added level of security in case of a misplaced debit card, and to accrue interest in their savings account. YNAB just serves as a waaaaay more detailed savings account!
🌻 Hannah
I'll mush all my other savings accounts together, but the apocalypse account ain't goin' nowhere!
(If for no other reason then that you can't count on the bank in the event of an apocalypse. For that case, the trusty hole in the ground is going to be a much safer bet!)
😂😂😅
-Hannah 🌻
Great video, but misleading to be recommending that people eliminate their savings accounts altogether and put it in checking. High yield savings accounts are a thing and it is often more beneficial to leave money in those than checking accounts.
HYSA are, alas, not so much of a thing as they used to be, two years ago. But you're right, it's good to pay attention to where you can earn the most interest. Right now I'm actually getting higher interest on my checking account than any of my "high yield" accounts, so I've consolidated most of my cash there. Which, ngl, made me nervous for awhile, but everything's tracked in YNAB.
Hackers are also a thing. If, god forbid, someone gets into your bank account, they at least won't be able to drain all of your money. A lot of people fall victim to that simply because they don't regularly check their accounts. YNAB is great, but it's not a firewall.
Hey Michelle! I don't recommend people *do* condense all to one account-just illustrating the point that you can narrow down your accounts as much as you want, because you *budget* does the sorting of your dollars for you, not your accounts. I apologize if that was misleading!!
-Hannah 🌻
Why get rid of savings account and loose the benefit of earning some interest? That’s one of the main benefits of a savings account
That's a valid point! Interest rates just aren't accumulating what they used to these days. But who knows--one day they may be back up!
-Hannah 🌻
The background music that plays is as loud as the voice. Really irritating. Is this something You Tube is doing is so the creators should complain to UA-cam. Help!!
Hey Barbara! We appreciate your feedback! This is definitely in our control, so we'll be mindful of music-to-voice balance! Thank you for sharing 😊
-Hannah 🌻