How does everyone categorize monthly savings? Do you consider it an expense?

Looking at my end of year cash flow, I am in the red (Spent more than I made) but that includes Savings and investments made. I just put a big chunk of money into my savings account. How does everyone categorize this in their budget? Part 2. - I Plan on using some of that savings for future purchases (Down Payment for a car, Home improvement, Property Tax). Maybe there is an optimum way to track this, or do I just go with the flow?

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While certainly not the only way, I have always recorded savings as expenses. This includes transferes to other accounts like my HSA or investment account. Then when I need to spend some savings, I transfer it back to checking (my main budget account) and call it “Income - transfer from assets”.

This makes sense. I think i just need to commit to an idea and stick with it. Like the “Income - transfer from assets” category. I might need to go back and recategorize 2022. Thanks, appreciate this.

I have thought about this as well, and here’s my way of thinking about it. At least currently. :slightly_smiling_face:

Transfers to savings are not expenses, because they’re not reducing your net worth, like groceries or a netflix subscription.

However, some such transfers are reversible, and some are not. If I’m just pushing cash into a savings account, that’s a reversible transaction - I can just take the money out any time I want to. However, if I’m pushing it into a 401k, then I can’t. This is also a transfer by my system of categorization, but it’s (at least for now) irreversible.

Things like mortgage payments are hairier. Certainly interest portions are expenses, and escrow is an expense, but principal payments are an (irreversible) transfer.

Stock buys? These are kind of in-between, in theory you could liquidate your holdings, but as that’s generally not the kind of investing in stocks I do, I consider these also as irreversible transfers.

The thing about “irreversible transfers” is that while they don’t affect your net worth, they do affect your cash flow situation. From this perspective, they do act as expenses, so I can see an argument for categorizing them that way (as I used to do). But I do like to keep them separated because I do think it’s important to think of things like investments differently than consumptive expenses.

Just my 2 cents.


Expenses: not getting the money back, net worth went down

Reversible transfer: just moved the money from here to there, can put it back whenever I want to. net worth didn’t change.

Irreversible transfer: moved the money from here to there, net worth didn’t change. but there’s a barrier to getting it back quickly.


I appreciate your reply. It’s funny, because this is how I currently look at my budget. But now I am thinking to change it to your “Cash-flow” theory, where transferring money to a savings account is negative cash flow. To me, this budget should be focused on my cashflow, keeping track of money coming in, and where it is going. Stocks and other investments are treated as an expense. But if I use money from a savings account, then it should not be counted twice as an expense (From cashflow to savings, and then savings to investment). I think I am going to switch to any money that leaves cashflow state (main checking account) is an expense. Any money that comes back into checking to pay for something big (Home improvement, Downpayment, etc) would be considered income, but heavily noted so I can tell where that money came from vs Paycheck. At least for now :slight_smile:


I categorize all transactions that deduct money from my checking account as an expense. On the flip side, any transactions that deposit money into my checking account is classified as income. If these are transfers between accounts, there will be 2 transactions you need to categorize- my transaction associated with the checking account is either expense or income, while the associated transaction in the non-checking account gets categorized as a transfer.

Why? This helps me with budgeting. My logic is when savings is a expense, it helps me budget for it and you can also budget for “income” from savings when you are “in the red” (at least from non-retirement accounts). I don’t see a benefit to me to distinguish between reversible (e.g. bank savings) and non reversible savings (e.g. IRA). If I want to have a higher probability to save money, I need to treat it like an expense; regardless where the savings is.

BTW- Doing it this way has no effect on net worth as net worth only looks at balances (assets minus liabilities) and not transactions.

Hope this helps.

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Definitely helps and goes along with my logic moving forward. Appreciate your feedback on this.

I see this the other way around. If I want to increase my net worth, I want to reduce expenses. But that certainly doesn’t mean I want to reduce investments. In this sense, investments are not expenses and why I keep them separate.

I should say that the default Tiller spreadsheets are not set up to make use of these concepts, you would need custom reports which could give views based on these concepts.

Net worth is simply assets minus liabilities; it has nothing to do with how you classify your transactions. A checking account is considered an asset, same as savings and any investment accounts. Transferring between them does not affect net worth in any way, regardless of how you classify it.

Tiller is absolutely set up to accommodate this; whether you classify them as expenses or transfers. You do not need to customize any reports at all.

BTW- welcome to the community.

Interesting read. I am new to Tiller but not to personal finance software or management, and how to categorize and more importantly budget transfers, especially to savings and retirement, has always been a pain.

I would normally fall into the “categorize as an expense” camp, and agree with the comment above that’s it’s important to budget your cashflow, and as retirement looms, it’s more important than ever for me to prioritize savings and therefore budget for it and track it. Categorizing as an expense works best all things being equal. But…

I recently added the Retirement Planner + Cashflow sheets from the Tiller Community, and what I found is that they use the un-budgeted amounts from your categories to measure the cashflow and set that as the annual contribution to your retirement accounts, for modeling purposes. If you budget them as an expense, it doesn’t include them as contributions.

I haven’t had time to dig into the code or contact the owner, but if it could be tweaked to consider a specific category as a contribution (even better on a per-account basis) it might work, but for now I’ve left my savings/retirement contributions as reportable transfers.

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Please keep us updated on this. I am now getting into fine-tuning my budget and adding the retirement and investment parts and how to categorize them in the grand scheme of it all is something I have to ponder. For the time being I am using personal finance and coin tracker (specifically for crypto) because I haven’t found a better alternative platform that keeps all my investments (including crypto) up to date without needing to micromanage every time I purchase a share. And using multiple exchanges makes this task even more time-consuming.

“what I found is that they use the un-budgeted amounts from your categories to measure the cashflow and set that as the annual contribution to your retirement accounts, for modeling purposes. If you budget them as an expense, it doesn’t include them as contributions.”

Can you point to this in the Cash Flow sheet? I’m not seeing this. On the Retirement Planner sheet, you plug in your planned annual amount to savings in the Investment Adjustments section in columns U-Y and then it also adds a growth factor to existing investments to do an overall projection. So not sure how a link to what you are saying happens on Cash Flow to that section in Retirement Planner would work…

On the Cash Flow Sheet on the left (Column A, B, C on rows 8 onward), you see a section with 3 columns. 2023 Cash Flow, Categories Budget and Adjusted Budget. There are 3 rows: Income, Expenses, Cash Flow. Income is budgeted income from your Categories Spreadsheet, Expenses are budgeted expenses (must be expense in the categories spreadsheet) and cashflow is simply the difference. It won’t count ‘transfers’.

In the Retirement, from what I can see, it will take this year’s starting balance as the sum of the balances of the accounts you include in Column B Rows 25 onward. The ‘contributions’ are assumed to be the entirety of the remaining cashflow from the Cash Flow Sheet and are in Column N (assuming you didn’t customize it in anyway).

It’s nice and simple, but there are limitations such it not being able to know which accounts get contributed to, and the expected return on different accounts. There’s also no way to have it consider pre-tax contributions from Payroll like 401(k) or even company stocks, that I can figure out.

Thanks. I see that now.

Column P is actually your planned /assumed Contributions for the year which you can set on your own in Retirement Planner in column U-Y. To your point, the model is assuming discretionary income is part of your contribution amount simply because it’s being factored into the total in Column S.

Ideally, Column N is included to help you influence what you put in Column P for your planned contributions for the year. For example, if Column N is projecting negative for the year then maybe you dial back Column P to reflect less cash to contribute to investments for that year. However, like you, my savings are part of my Expense budget so including Column N in the totals is skewing it.

Ideally, we would have a filter/flag/whatever to not include Column N in the totals if that number does not influence your investment totals. You could just delete Column N from the Column R formula and do it yourself to fix it. Just might get jacked up if a new version is released.

I have tried a lot of different ways to find something that makes sense to me. This is what I’m doing now: 1. I “hide from reports” when I transfer “Savings Out” (of any account), because it’s just moving money around. 2. I categorize “Savings transfer in” my budget as “Alternative Income” (otherwise my budget doesn’t balance). 3. I also started categorizing bank interest, sell used items, & returned items as “Alternative Income” (so I can account for money coming in that isn’t paycheck/salary).

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@YouBet96 Agreed. I think a slightly easier solution would be if column P just picks up the appropriate budgeted saving(s) category from your budget. Having it as an adjustment seems odd, but it would work. The net cashflow can be seen a potential additional savings to run scenarios to beat ones goal.

If in your category planning you run a net zero budget, cashflow should be zero and the only contributions would be the adjustments. The only issue then is the entire budget is assumed to increase by a fixed percentage in the modeling, whereas you’d really want to model your expense/savings budgets at different rates.

So… I am a 15-year Mvelopes user (and an accountant!) and I am determined to make Tiller work as a true envelope budget. I save every month for future expenses and have to find a way to put this money in its envelope.
I stumbled across the “Savings Budget” template in Tiller, and for January, I am going to “fund” each expense line with my paycheck, not just book as “paycheck”.
The key is to always be sure that the sum of the funds in Tiller equals the sum of bank account balances - both Checking and Savings.
They should -always- match to the penny, (Did I mention that I am an accountant?)

@dulce1989 I was also an mvelopes user and left a few years ago to Tiller. I created a template for a true envelope experience. Since Mvelopes has shutdown I have had a ton of users find my sheet a good replacement. I think it will meet your needs

You can read more about it here

I have also created a notion site that has a bunch of instructions and how tos


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Interesting. I am usually pretty much break even every year for cash flow because I try to categorize every transaction so my leftover cash at the end of the year is $0.

I use the Retirement Planner sheet to plan for Retirement but not the Cash Flow sheet. In the Retirement Planner sheet I simply enter my expected annual contributions in columns S-W…


Trying to use current leftover cash flow as my funding amount would not work for me at all.