Music Lessons savings/payment inquiry

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#1

Hi there!

I’m new here, so be gentle!

I have savings for each of my kids’ music lessons, which usually run on 4 or 8 week cycles.
What I will do is take $15 per week and put into a separate account so that when it comes time to pay for the cycle I have enough to cover the payment, but since I have the savings transfers AND the actual payment categorized as ‘music lessons’, when the payment comes out, it looks like I’m over budget.
What is the best way to categorize the weekly savings and the payments so it balances out in the end?
Thank you in advance!
– Matt

#2

Only the actual payment should be categorized as music lessons. The transfer should go in as transfer, any transfers from one account to another should be transfer so that the accounts zero out, until you use that money.
You’re not actually spending it until the money leaves your pocket, right now you just moved the money from one pocket to another.

#3

Ah, yes. Of course. That makes sense. Since the money was moving however, I wanted to make sure it was accounted for. Plus, it makes it easier to budget with a set weekly amount instead of a payment that moves around depending on the cycle. I guess it’s just a manual adjustment I have to make in my budget.

Thank you!
Matt

#4

Hi @MattD:

Welcome to the community!

Some people will use one line item in their budget for both the savings and the payments. They allocate monthly expenses, allow the funds to build up in their checking accounts, then log the payment to the same line…money planned, money spent…the comparison of actual to budget in that line tells the story of being over or under plan.

This eliminates the need for extra accounts and transfers…makes life simple AND accountable.

Best wishes with your budding musician! We need them.

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#5

Thank you! In order to track, since technically it’s a transfer to savings and then a payment, I’ve created a transfer for the weekly amount and will include the budget for ‘cash-out’ in a separate line.

Appreciate the musical wishes! We’re getting the band back together.

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#6

That makes total sense @MattD ! Great!