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!

Sorry to bring this back up after a couple years. But I’m confused by this. Here’s my scenario.

  1. I have 2 accounts “Checking” and “Savings”
  2. I have a budget category called “Yearly Savings” that I contribute to monthly to cover large amounts that aren’t monthly. This is set to a fixed amount - say $500.
  3. I tag the debit transaction against the Checking account as “Yearly Savings”. I tag the credit transaction against the Savings account as Transfer.

The problem is that the savings budget does not accumulate. The only way I can get it to accumulate is to set the budget amount to 0, and tag the credit as “Yearly Savings” and the debit as “Transfer”.

What am I doing wrong? :frowning:

Hi @philh No apology necessary. Great question.

There’s lots of ways to handle this…I have a similar goal, but I handle it a little more simply. (In my case, simple is always better.)

Because interest rates are so low right now, the amount of money you may loose by keeping this savings amount in your checking account is minimal. (Unless you have an interest-bearing checking account…bonus!) So, I would let the money accumulate and be drawn down in your checking account.

You can record the activity like this:

In your budget category called, Yearly Savings, set a budget for $500 each month (or whatever amount you wish in whatever frequency you wish). Make it an expense Type. The budget amounts in this line sequestors these dollars in your budget for unplanned items. Each month, unspent, these available dollars will accumulate, both in your checking account and in your budget. No transfer of funds is needed.

When you need to pay for something and want to use these funds, assign the transaction for the purchase to the same line item, Yearly Savings. This will reduce available funds by the purchases, and in your reports, the YTD available (actual against budget) will be a function of the money you’ve saved and the money you’ve spent.

No need to move the funds around or account for transfers.

This is just one way to do it. There are others, too.
Does that help?

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Yes. This makes sense, but I prefer to actually move the money. And I prefer to actually allocate the money each month through a budgeted amount. Is there a way to do that?

@philh

Here’s one way:

Cash from checking to savings: Category A, expense type

Cash from savings to checking: Category B Income type

Use of funds: Category C, Expense Type (could be several, depending on what’s being bought.)

This should keep the cash flow straight.
Best.

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I’ll look into that. I appreciate your time and thoughtful responses! :blush:

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Hey, sorry I’m having the same issue as the person above I think. In my categories I have a category called “E. Fund” type savings track savings that I want to be a representation of current emergency savings in a higher yield savings account. However, everything I try on the results in either the contribution and budgeted value resulting in either 2x the contribution or summing to zero which makes my savings value the same at the end of the month as at a the beginning of the month. Any work around for that?