How to track contributions & transfers to a savings account

Hey there!

I’m a new user, specifically coming over from YNAB. I’m set up with the monthly Savings Budget, and I’m starting to pull the data from the Yearly Budget into another page to pull graphs into Notion.

My question lays specifically around delegating money for “savings” and tracking both the money that I put there and spend from there. I have an Emergency Savings bank account, as well as a category for Emergency Savings. I’d like to build this up, but not spend money from it on a regular basis. Right now, I’m budgeting money to my savings goal, and transferring money to that bank account. I’m sort of just generally confused on how to track my contributions to this account, so any help would be greatly appreciated!

Thanks!

Hi @goodmanjosephd:

There is a lot of discussion around this topic in the community with some very good and differing perspectives depending on one’s interests and needs. Some prefer to call both sides of this transaction a transfer (which, in fact, they are.) Others consider savings like any other deduction (and therefore, limitation) of available cash flow. That’s my approach. (A quick search will bring up recent discussions.)

Here is one way to handle your savings activity. There are others, but this works for me:

  1. In your Categories sheet, you’ll need two categories set up like this:

Name: Emergency Savings
Group: Savings
Type: Expense
Hide From Reports: (blank)
Budget: [Set the monthly amounts you choose.]

Name: Transfer
Group: Transfer
Type: Transfer
Hide From Reports: Hide
Budget: $0

  1. If your bank allows it, set up some automatic, monthly transfers from your checking account (or other source account) to your Emergency Savings account, mirroring your monthly budget for your savings goal.

  2. When the monthly transfers to your Emergency Savings account appear in your transactions as deductions from your source account, assign these to your Emergency Savings category. You can then measure this activity against your budget for savings.

  3. When the same transfers appear in your transactions as deposits into your Emergency Savings account, assign these to the Transfer Category: their impact will appear in your Balances sheet.

  4. The opposite is similar. It could work like this: when you need to move money back to your source account from Emergency Savings, the two sides of the transaction will appear in your Transactions Sheet, and you can assign these like this:

Deduction from Emergency Savings: Transfer
Deposit into your Source Account: Emergency Savings.

Don’t be tempted to “cheat” and assign the incoming transfer to the category associated with the reason to withdraw funds in your Emergency Savings account. While this does, in fact, create additional budget space to spend in that category, you will have to rely on your memory about where the funds came from. Also, doing so will overstate your Emergency Savings activity for the time period, since only transfers to that account, but not from it, will appear against your savings budget. (Does this sound like a painful lesson learned from experience? :stuck_out_tongue_closed_eyes:)

Instead, after the transfer, use the Savings Budget tool to move the newly deposited Emergency Savings to the category where its needed. Then you will have a change record created that can tell the story later about where your hard-earned money has gone!

Hope that helps, and congratulations to you for planning to save for emergencies! Very wise.

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Thank you for the detailed reply, I really appreciate it!

So in this situation, I would track the “actual spending” as deposits into my bank account, and could track that over time to see how much money I’m putting away.

I also have a second savings account, dedicated to more short term savings (vacation, gifts, bigger expenses), and have set up a few categories in Tiller, namely Gifts, Technology, and Vacation.

Since I’m using the Savings budget, this method is a bit contrary, so I’m just trying to wrap my head around all of this! Would you recommend that I use this same method here, or not? Since with this method, nothing rolls over in the “Savings” category, so it’ll be a bit more difficult to see the money I have set aside for each of those things. How would you recommend I go about this?

Do you think I would be better off just putting my transfer transactions for these categories as “Transfers”, and tracking (Savings+Budget)-Actual for how much I’ve contributed/spent?

I’d love to hear how you’d go about this. Once again, thank you!

Hi @goodmanjosephd:

Great questions. While I understand the rationale for your creating a second savings account, that option is more complex than I would have chosen, especially if it is short-term savings. If it were long-term savings, your approach provides some advantages, since you could place the funds in a higher-yield, interest bearing account and earn some money while the balance builds.

(Ideally, your Emergency Savings should be longer-term, and your moving funds there for the future can help you both sequester the funds from other uses and deposit them in a higher-yield, interest-bearing account, with little or no penalty for early withdrawal, while you wait (hopefully for a long time) for a true emergency.)

But for the shorter-term expenses such as technology, gifts, vacations, etc., my approach is to budget monthly for these and let the available funds build in my source account (Checking) over time, and visibly assigned to one of these categories in my budget.

So with this approach, I would simply assign purchases toward those short-term items to their appropriate category, as availability allows (the Available column of the Savings Budget.)

The beauty of the Savings Budget shows up, though, where you may redistribute savings from other categories to a particular need. For example, if you have been saving for a vacation, and decide to take it sooner than you thought and your budget for vacations is short, you might find the funds to cover the difference you need by moving savings from another category in the Savings Budget sheet to Vacations.

The tool also allows you to access savings in a category from previous years and reassign it, as well. The time frame for this availability matches the time frame of your Categories sheet…(multi-year). So you could save for a vacation over two years by letting the funds in your Vacation category build up, unspent, in your checking or source account over time.

Does that help bring these ideas together? Apologies ahead of time if I have added to rather than reduced any confusion.

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This has been very helpful in thinking through my approach to all of these! I really appreciate your thorough replies, and hope you have a great week!