@jlp Thanks for sharing that approach, insightful.
Hi Tiller team! I’m looking to incorporate tracking of moments when I move cash to an investment. I don’t need a connection to a brokerage account and have a real time update (this is honestly something I don’t want to see). Is there a way to incorporate a new section in the yearly budget for investments? Right now I can mark it as income, expense, or transfer but each isn’t right. Incomes would be double counting (Ex. paycheck and then invested counts twice as income), expense isn’t right because it’s not, transfer is the most similar, but it’s automatically hidden in the yearly budget.
How can I create a new section in the yearly budget that meets my goal?
From a budgeting perspective, I classify any money that goes into investments as an expense and as income when I withdraw. Any activity inside of investments accounts (e.g. dividends, interest, fees, etc.) are under transfers.
The reason I do this is that I budget a certain amount each month to invest so it’s an expense line item. I do this so I can (hopefully) have higher income from them down the road, which is why when I withdrawal, they are income line items. This is very straightforward and makes complete sense to me.
Where it gets more complicated and powerful is what specific categories to use for all these transactions. For example, if I transfer money from a checking account into an investment account, there are 2 transactions to classify- withdrawal from checking and deposit into the investment account.
I categorize the w/d as “Education funding” (if it goes into my kid’s Education fund; different category if it’s into a Retirement investment account). Education funding is an Expense and a line item in my budget. For the deposit into the investment account, I categorize as “Investment cash flow” which is grouped as a Transfer so it doesn’t double count the transaction.
I created reports that use Investment cash flow category to calculate returns by account for different time frames so I know how my investment accounts are doing.
Hope this helps.
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Additionally @kevinquigley18 does this section of this help article about budgeting for transfers help?