YNAB Tip: Transferring Money To Your Savings Without Affecting The Budget
Photo by Fabian Blank / Unsplash

YNAB Tip: Transferring Money To Your Savings Without Affecting The Budget

Learn how to use YNAB to transfer money from your checking to your savings without affecting your budget.

Steve Bailey

Those of you who know me know I live and die (financially) by the software "You Need A Budget (YNAB)."  I often get hit up with questions about how to do this and how to do that so I started a series of YouTube videos to walk through different common questions I get asked.

Today, I address this question. It says, "I've been using YNAB for two months. I have a savings goal setup to save a down payment for a house. I have the goal set for $12,000 in 12 months. Each month, I put in $1,000. I'd like to move that money to my savings account, but when I do that it messes up my totals and the accounting on my running total for that goal. How is this supposed to be done?"
Well, it's a good question. Savings goals are a great way for you to get where you need to be, but when you start moving money between accounts, it can mess things up. Let's take a look.

In my example (which you can see if you watch the YouTube video above), I've set up a demo budget in YNAB with a brand new checking & savings account. I go into January, February and March and record paychecks in the amount of $1,500 each.

Three paychecks, three months. Next, we go into the budget and create a savings goal for the house down payment. In my example in the video, I set the goal for a year from January. I create the savings goal for $12,000.  That should be $1,000 every month for 12 months.

What we do next is budget the $1,500 each month into the appropriate categories. I'm going to put $1,000 in my savings goal budget account (and the notice shows up that I'm on track to reach my target) and $500 wherever else I want (groceries in this example). Remember, one of the goals of YNAB is that every dollar that comes into your life gets assigned a job.  It's not acceptable to have money sitting there not allocated for something.

Now this is where the rubber meets the road.

Your budget is only affected when money enters your life or leaves your life. If you're moving money from one account to another, this doesn't affect your budget at all.

Moving money between accounts is simply something you do within your accounts tab on YNAB.

The correct plan of attack here is to do a transfer transaction between accounts. When you are doing this, no category is needed – because no money is leaving (or entering) your life – just moving from one account to another.

Hopefully this makes sense. Please let me know if you have further questions about how to do some things in YNAB. It truly is a life changing piece of software.