Hi All - I was curious how people track 529 plan contributions. Its a bit confusing to me since its really a transfer from one account to another. When a contribution is made it shows up on the 529 side as a deposit and as a withdrawl from my checking/savings. So do people have an expense category or do they track it as a transfer that will show a 0 balance? The reason I was thinking it could be tracked as an expense was just to make sure I had budget allocated for that, the problem I see arising is that if I put more or less in that will show up as a surplus or deficit in that budget item, which may be messy.
Welcome thoughts, suggestions, etc…
Thanks,
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Hi. Been noodling with different ways of handling 529 contributions myself. For the moment at least and as you suggest, I treat the outgoing contribution from my checking account as an expense and the incoming contribution into the 529 account as a transfer in. I think this is the best option for me as 529 contributions are (1) post-tax so they do come out of my checking account like any other expense and (2) discretionary–I could reduce or increase them as needed. Open to other suggestions, but this is the system I’m using at the moment.
Thanks @dmetiller. What I was doing previously, was I had a transfer account and all transactions were categorized into that transfer account and I am not sure that was the best approach. I will give your idea a try.
Also, I have my parents putting money into the 529, so contributions are made, but don’t have an associated expense transactions. Any thoughts on how to handle this?
@fost9508 What I typically find most useful for people is to track it as an expense so they can see how much they’ve contributed at a glance, which is often motivating to continue/increase savings contributions. But it depends how you want to use Tiller and how you want to see things. I’d start with your vision of what you want Tiller to be able to do for you, then work backwards from there to set it up in the way that will accomplish your goal.
Hi @Caroleen. I mainly just want to make sure it accounted for in my budget and I can track it. Since all the balance information is tracked in Tiller, I don’t know how helpful it is to show the transfer.
One thing I struggle with if tracking it as an expense is that if I am not contributing the total amount I have allocated for my budget, it will show that I have a surplus for that expense category which will be mis leading. I suppose a way I could address that is adjust the budget for the month that is different than budget so that the roll over amount is always 0.
Thoughts?
Ah, yes, I’m not using it in this way, so I don’t run into that issue!
How are you using it? Im see what others are doing to see what works for me.
thanks!
I prefer to use Tiller just for tracking actuals, so I’m not using the budgeting features per se, so this issue just doesn’t come up!
I’d do what you suggest: adjust the monthly budget as necessary. In my workflow, I do this regularly for a bunch of categories. For example, utilities. I find it very difficult to manage to a specific budget for, say, electricity or water (so difficult that I don’t even really try other than doing my best to be a responsible user and chastising my kids for not turning off lights when they leave a room 
). I don’t particularly want to reward myself or penalize myself for not having budgeted exactly the right amount for these utilities. So, I just adjust the monthly budget to match whatever my electricity bill was for that month.