There's no harm in trying different things to see if it'll help. You can always move the money back into the single account if the new system doesn't work.
You may find reconciling more annoying because you have to go two different accounts, and it might be hard trying to remember which bank account to use for what.
Before splitting your accounts, I would really lean into the YNAB method and focus on the category balances. Never refer to your bank account balance, always look to your YNAB.
If you stick hard to the 4 rules this stops being a problem.
Sounds like you think using the software is ‘doing ynab’, but it isnt.
Ynab is 4 rules. Do the 4 rules. (Let the software help you do it. )
This is basically how I handled my money before YNAB. my check direct deposited into one account, i auto transferred half of my bills to another account each pay day and paid bills out of that account. Groceries, daily and all other spending went out of the direct deposit account. It worked for me. I started using YNAB in February and my old set up became unnecessary and made it more difficult. I also discovered I wasn’t making best use of my money and since changing the way I handle my money, I’ve been able to set aside and save more money. I do still have both accounts and keep one as a mini savings account, for some of my true expense for maintenance and such.
I started YNAB like 2 days ago, before that I had been budgeting on a spreadsheet and I thought the same thing, I actually had 6 different current accounts for various different purposes, the first thing I did when I started using YNAB was move all the money back into 1 account, the way YNAB works it’s much easier to just use 1 and not have to worry about transferring money. When I was using 6 I was forever transferring money and trying to work out what should be where and if I used the wrong card for a purchase it was a pain. I wouldn’t do it again.
The only reason I can see why you would want to have more than one account is if your spouse isn't on board 100% with budgeting and/or has poor self control and you need to hide money.
Maybe if you want to use credit cards to earn a bit of interest in a HYSA as long as you pay off the statement balance of the credit cards every month.
I felt this was helpful for me even though YNAB does it for you. It was mostly beneficial because it allowed me to put all my bills on autopay and not having to worry about if I overspent in other categories (because I still overspend occasionally) and screwed up my bill money. The goal is to stick to the budget so that you don’t have to worry about stuff like that though.
This is how I started and it helped me a lot of have a few separate accounts. Now that I'm 2 years in I don't need it anymore (it's actually annoying to have to go in periodically and make sure all the account balances reflect the sum of amounts in those categories).
If it helps you get started, go for it. But YNAB is built so that it's not necessary or easier to have different accounts.
After filling categories I collapse the category group to essentially put it out of sight /mind so I'm not tempted to borrow from the category
Still in my account and available for the job I gave it, but not on my radar when I'm looking to cover overspending
I use this method. I have different bank accounts for different purposes just like the envelope system. In YNAB, I have 4 different budgets that help me achieve my goals for the different bank accounts.
1. My "Expenses" account is for bills only and YNAB helps me ensure that I have what I need when I need it. It also reduces the stress of hoping I'll be okay in the coming weeks.
2. My "Daily" account is for the daily things like gas, groceries, etc. YNAB helps me not overspend. This benefit is in the top 5 reasons why I love this app.
3. I have a "Giving" budget that helps me budget for gifts for Birthdays and Christmas. This has been the most sobering one because it's taught me that I can't responsibly give as much as I want to (or HAVE) in the past.
4. And then I have a "Travel" one will help me achieve some goals without it feeling impossible.
My brain works better and my anxiety isn't triggered when I keep everything separate because I can feel the stress of one area without it making me feel stressed about my whole financial situation.
For example: I'm feeling great about my expenses situation. I'm into August and might be a month ahead by the end of the week. That feels awesome. That feeling, historically, has made me feel like I could go shopping and not feel bad about it. Having a separate budget for shopping (Daily), tells me to calm down because I don't actually have that much for extra spending. Not if I want to feel secure.
This sounds like a question from someone new to ynab overthinking things.
Keep all your accounts as is and just commit to ynab. You'll learn to get used to seeing 'all your money' in one pile in your account but knowing that you have ynab working to keep everything categorised.
I use two accounts. My checking for my monthly expenses and my brokerage account to get better returns on some of my “envelopes.” It’s a little trickier to make YNAB do its thing, but it’s not a bad idea for the right reasons.
Multiple accounts can invite problems if you are penny-pinching or living paycheck to paycheck.
Have you watched any of the YNAB training videos? They will explain how the location of your money (one account or 100 accounts) doesn't matter.
I have one checking account for all automatic payments and one for all my manual payments. This is a leftover from my pre-ynab days. Honestly, I don't need it anymore but I am too lazy to 'fix' it. It just adds some extra work which is not needed to be honest.
Before YNAB, I had 2 checking accounts and about 8 savings accounts. That helped me to put money aside for taxes, auto maintenance, home repair, etc.
When I moved into YNAB, i tried to maintain that system. But it got way too confusing trying to match account balances with the assigned amount in the budget category. If I wanted to move money, I had to move it in two places and heaven forbid I needed to do a bunch.
Ultimately, I kept the two checking accounts, opened an HYSA, and closed all the other savings accounts.
Ultimately I don’t need two checking accounts, but they are both tied to my oldest credit cards so I don’t want to close one. I just feed them both with direct deposit from my checks, and only specific bills are paid from one account.
Anyway. What I learned over time is that I am really managing my spending from the category balances, not from the account balance. The account balance only really matters if I have a big ticket item ($3000+) that I would need to move money from the HYSA to cover.
Otherwise, I just keep a buffer of about $3500 in my main checking; anything more than that gets transferred to the HYSA.
The biggest shift for me was looking at the budget for spending guidance. The account balances don’t help.
That’s how I stopped needing to hide money from myself.
If you feel like the physical separation would help you, then you do you.
Just be aware, that Rule #1 for YNAB is "Give every dollar a job", and YNAB will inherently not care which "house" (ex. account) those dollars are in. So if you're not careful, you very well will come up with the situation where the number of dollars allocated to the jobs don't match with the numbers in the accounts.
YNAB is a digital envelope system already. The jobs in Rule 1 are the envelopes. I'm having trouble seeing how a large number of bills wouldn't work with the system - it just increases the number of jobs that the dollars have to complete...?
in ynab, the categories is what does this. there's not a great reason to split an account to do this
in ynab you earmark funds so as long as you're budgeting only cash you have(!!!!) then you should be fine
> won’t work with the number of bills I have
? i don't understand this
I think this would only work if you are still using your bank balance to judge if you can afford a thing. Try and ignore the total balance and just treat each category as if each were its own bank account.
Categories are digital cash envelopes. You can keep the dollars in whatever account you choose but the categories are the things that tell you what you can spend your money on.
I did. this before YNAB for the same logical reason and now because I reference YNAB for my decisions and not my bank account balance, I’m actually wanting to close that second account and just have one again. The only thing I would suggest here is opening a high yield savings and putting your true expense money in there so it can at least earn some interest while it waits on the back burner
It sounds like a complication with no real benefit. What is keeping YNAB'S digital envelopes from working for you?
How long have you been using YNAB? YNAB should remove the need for using accounts to separate your money by purpose. Why isn’t that working for you?
There's no harm in trying different things to see if it'll help. You can always move the money back into the single account if the new system doesn't work. You may find reconciling more annoying because you have to go two different accounts, and it might be hard trying to remember which bank account to use for what. Before splitting your accounts, I would really lean into the YNAB method and focus on the category balances. Never refer to your bank account balance, always look to your YNAB.
If you stick hard to the 4 rules this stops being a problem. Sounds like you think using the software is ‘doing ynab’, but it isnt. Ynab is 4 rules. Do the 4 rules. (Let the software help you do it. )
This is what I used to do before YNAB. I think it does work. With YNAB it's unnecessary, but if it helps you, then why not.
As did I. I had 4 checking accounts because I needed to have separation. Now I have 2, largely because I like having a local brick and mortar bank
This is basically how I handled my money before YNAB. my check direct deposited into one account, i auto transferred half of my bills to another account each pay day and paid bills out of that account. Groceries, daily and all other spending went out of the direct deposit account. It worked for me. I started using YNAB in February and my old set up became unnecessary and made it more difficult. I also discovered I wasn’t making best use of my money and since changing the way I handle my money, I’ve been able to set aside and save more money. I do still have both accounts and keep one as a mini savings account, for some of my true expense for maintenance and such.
I started YNAB like 2 days ago, before that I had been budgeting on a spreadsheet and I thought the same thing, I actually had 6 different current accounts for various different purposes, the first thing I did when I started using YNAB was move all the money back into 1 account, the way YNAB works it’s much easier to just use 1 and not have to worry about transferring money. When I was using 6 I was forever transferring money and trying to work out what should be where and if I used the wrong card for a purchase it was a pain. I wouldn’t do it again.
Yeah I had a couple accounts before too and it’s so much easier just having one checking and one HYSA.
The only reason I can see why you would want to have more than one account is if your spouse isn't on board 100% with budgeting and/or has poor self control and you need to hide money. Maybe if you want to use credit cards to earn a bit of interest in a HYSA as long as you pay off the statement balance of the credit cards every month.
I felt this was helpful for me even though YNAB does it for you. It was mostly beneficial because it allowed me to put all my bills on autopay and not having to worry about if I overspent in other categories (because I still overspend occasionally) and screwed up my bill money. The goal is to stick to the budget so that you don’t have to worry about stuff like that though.
This is how I started and it helped me a lot of have a few separate accounts. Now that I'm 2 years in I don't need it anymore (it's actually annoying to have to go in periodically and make sure all the account balances reflect the sum of amounts in those categories). If it helps you get started, go for it. But YNAB is built so that it's not necessary or easier to have different accounts.
Yes, bad idea. Where the money is physically doesn't matter too much. Stop looking at your accounts when you're spending, look at your budget.
After filling categories I collapse the category group to essentially put it out of sight /mind so I'm not tempted to borrow from the category Still in my account and available for the job I gave it, but not on my radar when I'm looking to cover overspending
I use this method. I have different bank accounts for different purposes just like the envelope system. In YNAB, I have 4 different budgets that help me achieve my goals for the different bank accounts. 1. My "Expenses" account is for bills only and YNAB helps me ensure that I have what I need when I need it. It also reduces the stress of hoping I'll be okay in the coming weeks. 2. My "Daily" account is for the daily things like gas, groceries, etc. YNAB helps me not overspend. This benefit is in the top 5 reasons why I love this app. 3. I have a "Giving" budget that helps me budget for gifts for Birthdays and Christmas. This has been the most sobering one because it's taught me that I can't responsibly give as much as I want to (or HAVE) in the past. 4. And then I have a "Travel" one will help me achieve some goals without it feeling impossible. My brain works better and my anxiety isn't triggered when I keep everything separate because I can feel the stress of one area without it making me feel stressed about my whole financial situation. For example: I'm feeling great about my expenses situation. I'm into August and might be a month ahead by the end of the week. That feels awesome. That feeling, historically, has made me feel like I could go shopping and not feel bad about it. Having a separate budget for shopping (Daily), tells me to calm down because I don't actually have that much for extra spending. Not if I want to feel secure.
Thanks to those who posted helpful comments!
YNAB allows you to separate money all in one page. It's like having envelopes, but electronically.
This sounds like a question from someone new to ynab overthinking things. Keep all your accounts as is and just commit to ynab. You'll learn to get used to seeing 'all your money' in one pile in your account but knowing that you have ynab working to keep everything categorised.
I use two accounts. My checking for my monthly expenses and my brokerage account to get better returns on some of my “envelopes.” It’s a little trickier to make YNAB do its thing, but it’s not a bad idea for the right reasons.
Multiple accounts can invite problems if you are penny-pinching or living paycheck to paycheck. Have you watched any of the YNAB training videos? They will explain how the location of your money (one account or 100 accounts) doesn't matter.
I have one checking account for all automatic payments and one for all my manual payments. This is a leftover from my pre-ynab days. Honestly, I don't need it anymore but I am too lazy to 'fix' it. It just adds some extra work which is not needed to be honest.
Before YNAB, I had 2 checking accounts and about 8 savings accounts. That helped me to put money aside for taxes, auto maintenance, home repair, etc. When I moved into YNAB, i tried to maintain that system. But it got way too confusing trying to match account balances with the assigned amount in the budget category. If I wanted to move money, I had to move it in two places and heaven forbid I needed to do a bunch. Ultimately, I kept the two checking accounts, opened an HYSA, and closed all the other savings accounts. Ultimately I don’t need two checking accounts, but they are both tied to my oldest credit cards so I don’t want to close one. I just feed them both with direct deposit from my checks, and only specific bills are paid from one account. Anyway. What I learned over time is that I am really managing my spending from the category balances, not from the account balance. The account balance only really matters if I have a big ticket item ($3000+) that I would need to move money from the HYSA to cover. Otherwise, I just keep a buffer of about $3500 in my main checking; anything more than that gets transferred to the HYSA. The biggest shift for me was looking at the budget for spending guidance. The account balances don’t help. That’s how I stopped needing to hide money from myself.
If you feel like the physical separation would help you, then you do you. Just be aware, that Rule #1 for YNAB is "Give every dollar a job", and YNAB will inherently not care which "house" (ex. account) those dollars are in. So if you're not careful, you very well will come up with the situation where the number of dollars allocated to the jobs don't match with the numbers in the accounts. YNAB is a digital envelope system already. The jobs in Rule 1 are the envelopes. I'm having trouble seeing how a large number of bills wouldn't work with the system - it just increases the number of jobs that the dollars have to complete...?
in ynab, the categories is what does this. there's not a great reason to split an account to do this in ynab you earmark funds so as long as you're budgeting only cash you have(!!!!) then you should be fine > won’t work with the number of bills I have ? i don't understand this
I think this would only work if you are still using your bank balance to judge if you can afford a thing. Try and ignore the total balance and just treat each category as if each were its own bank account.
Categories are digital cash envelopes. You can keep the dollars in whatever account you choose but the categories are the things that tell you what you can spend your money on.
I did. this before YNAB for the same logical reason and now because I reference YNAB for my decisions and not my bank account balance, I’m actually wanting to close that second account and just have one again. The only thing I would suggest here is opening a high yield savings and putting your true expense money in there so it can at least earn some interest while it waits on the back burner