I have a category ‘Saving’ to track my saving goal. Generally, I would use this category for transactions such as transferring money from checking account to a saving account or brokerage account. However, there are certain transaction types that in my view need to be categorized as both ‘Income’ and ‘Saving’, for instance, my 401k contribution. I would like to track these toward my savings. I also want to include these transactions to track my overall income as well. How would you handle this type of scenario. What approach do you take?
You might consider this approach:
Set up two categories; one called Savings Out and the other called Savings In. When you move money from checking to savings, code the money leaving your checking account as Savings Out and the money coming into your savings account as Savings In. Regarding category type, you can code both as transfer or one as expense and the other as income. As long as both accounts are linked, the two Savings categories should net to zero.
When you spend these savings, there are many options as to coding the transaction depending on what you want to see.
When you get your paycheck, you will need to use the splitter tool to show your gross income and all your payroll deductions. This is how you will get your 401k deduction/contribution to appear in the transactions tab. Code it as Savings Out. If your 401k plan account is linked, then code the 401k deduction/contribution coming into that account as Savings In. This coding my vary based on what shows up on the transactions tab.