Budget or create saving buckets?

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kayanco
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Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 12:01 pm

Hey guys,

Do you have a good way of compartmentalizing the money in a savings/checking account into buckets?

For example:

You want to visualize the balance in your checking/savings account as 3 different buckets:
A - for a trip
B - to buy something
C - for something else

And you contribute small amounts each month
A - $50/month
B - $25/month
C - $30/month

But you want to be able to visualize or know, when each bucket reaches it intended goal value, e.g.
A - $2000
B - $500
C - $600

One way could be to open 3 separate checking accounts, that way we know checking account A is for the trip and is currently at $1500 (so $500 more to go)....but I was wondering if there was another way, by just having a single account.

Thanks guys!!

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FelixTheCat
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Re: Budget or create saving buckets?

Post by FelixTheCat » Thu Jun 19, 2014 12:03 pm

Yes. I have a CapitalOne360 (used to be ING) account where I can open up a savings account for $1. I have several accounts/categories like Bills, Vacation, Christmas, etc.
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NOVACPA
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Re: Budget or create saving buckets?

Post by NOVACPA » Thu Jun 19, 2014 12:12 pm

Fidelity...

I have multiple cash management accounts (CMA) with them. You can continuously change the name of the accounts to serve different purposes. ING or Cap360 is similar, I hear.

For no fees, minimum balance, bill pay, etc, Fidelity CMA is my favorite.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 1:20 pm

imgritz wrote:Yes. I have a CapitalOne360 (used to be ING) account where I can open up a savings account for $1. I have several accounts/categories like Bills, Vacation, Christmas, etc.
Yes that's what I was looking for. Is it a savings account or checking?

Do the several account have their own account number? Or is it just one actual account

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 1:20 pm

NOVACPA wrote:Fidelity...

I have multiple cash management accounts (CMA) with them. You can continuously change the name of the accounts to serve different purposes. ING or Cap360 is similar, I hear.

For no fees, minimum balance, bill pay, etc, Fidelity CMA is my favorite.
So separate account numbers for each?

traumadoc77
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Re: Budget or create saving buckets?

Post by traumadoc77 » Thu Jun 19, 2014 3:12 pm

I have multiple free saving accounts at Ally... emergency fund, house fund, car fund, vacation fund, taxes/insurances fund. I could keep them in one account but I like it this way, it is easier for me to see and save I think.

NOVACPA
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Re: Budget or create saving buckets?

Post by NOVACPA » Thu Jun 19, 2014 3:18 pm

kayanco wrote:
NOVACPA wrote:Fidelity...

I have multiple cash management accounts (CMA) with them. You can continuously change the name of the accounts to serve different purposes. ING or Cap360 is similar, I hear.

For no fees, minimum balance, bill pay, etc, Fidelity CMA is my favorite.
So separate account numbers for each?
Yes - there are separate account numbers for each. I have everything direct deposited, so once it's set up, the automation works wonders.

This gets off the topic of your question slightly, but will provide some good insight in how you can set this type of systematic saving up.

My system of accounts looks something like this: http://www.iwillteachyoutoberich.com/au ... -finances/

I'm an accountant, naturally, I like to have everything bucketed appropriately.

Carson
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Re: Budget or create saving buckets?

Post by Carson » Thu Jun 19, 2014 3:20 pm

Accountant here too. For the most part, I track the balance in excel. The sum of the detailed items equals my bank balance.

I do have 2 different accounts, mainly for ease of use. One is next to my checking, the other is more long term and takes time to transfer.
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Re: Budget or create saving buckets?

Post by bloom2708 » Thu Jun 19, 2014 3:46 pm

We have the following accounts at our local bank now. I had an ING Direct/Capital One 360 account, but decided to move the funds local. I loved ING Direct, but am not a big fan of CO 360.

Primary checking
Emergency fund
Trip fund
Taxes fund (for paying property and income taxes)
Car fund (for < 2 year money for next car purchase)

My goal is to give every dollar a "name/purpose". I don't put money in these funds unless the balance dips below the desired threshold.
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avenger
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Re: Budget or create saving buckets?

Post by avenger » Thu Jun 19, 2014 4:26 pm

Wow. That all seems so complicated - why the need to do such mental accounting? Money is money.
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bigred77
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Re: Budget or create saving buckets?

Post by bigred77 » Thu Jun 19, 2014 4:27 pm

I have many such cash management accounts with Fidelity for this purpose. Alot of them I drop in like 50 bucks a paycheck.

I know its dumb and just mental accounting but it works for me and I feel soothed when i log in to track my progress towrds my next vacation.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 8:40 pm

NOVACPA wrote:
kayanco wrote:
NOVACPA wrote:Fidelity...

I have multiple cash management accounts (CMA) with them. You can continuously change the name of the accounts to serve different purposes. ING or Cap360 is similar, I hear.

For no fees, minimum balance, bill pay, etc, Fidelity CMA is my favorite.
So separate account numbers for each?
Yes - there are separate account numbers for each. I have everything direct deposited, so once it's set up, the automation works wonders.

This gets off the topic of your question slightly, but will provide some good insight in how you can set this type of systematic saving up.

My system of accounts looks something like this: http://www.iwillteachyoutoberich.com/au ... -finances/

I'm an accountant, naturally, I like to have everything bucketed appropriately.
Hey NOVACPA, thanks,
Ramit Sethi of 'I will teach you to be rich' is a good guy, I was actually reading the same article when I was doing my own research just before posting this thread...his book look really popular on Amazon as well.

Since you are an account, you'd be great with numbers...I looked up the Fidelity account, but the interest rate of 0.07 doesn't look that great...do you think the convenience outweighs a better interest rate?

Thanks!

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 8:48 pm

bigred77 wrote:I have many such cash management accounts with Fidelity for this purpose. Alot of them I drop in like 50 bucks a paycheck.

I know its dumb and just mental accounting but it works for me and I feel soothed when i log in to track my progress towrds my next vacation.
Hey, yep..that's sort of what I had in mind as well...like a separate bucket for a vacation/trip, and you could add to it little bit here and there, and you have a total amount in mind..and one day when it reaches that value, you know you are ready :) time for vacation prep!

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archbish99
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Re: Budget or create saving buckets?

Post by archbish99 » Thu Jun 19, 2014 8:50 pm

Take a look at YNAB. You put money into a category, and the balance accumulates until it's spent. You can put notes about how much you're trying to save up, if needed.
I'm not a financial advisor, I just play one on the Internet.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 8:52 pm

avenger wrote:Wow. That all seems so complicated - why the need to do such mental accounting? Money is money.
Agree...that's why I was hoping I could still keep just one account, but somehow figure out how to compartmentalize the balance into buckets...like if the total is $2000...$1500 is for a trip, $500 is for xyz...and we add $50/month to the $1500, and $25/month to the $500...

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archbish99
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Re: Budget or create saving buckets?

Post by archbish99 » Thu Jun 19, 2014 10:05 pm

Yep -- we put $400/month into our "home improvement" category in YNAB; this month, we're getting new countertops, because YNAB says we have enough money for them. The checking account balance will probably look different, but none of the other budget categories will.
I'm not a financial advisor, I just play one on the Internet.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Thu Jun 19, 2014 10:16 pm

archbish99 wrote:Yep -- we put $400/month into our "home improvement" category in YNAB; this month, we're getting new countertops, because YNAB says we have enough money for them. The checking account balance will probably look different, but none of the other budget categories will.
Congratulations!! :)

I read about YNAB in your previous post, and also last night I came across YNAB when I was messing with Mint...YNAB idea sounds good, but it's paid.
Let me see if Mint will do something like what you are talking about.

sscritic
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Re: Budget or create saving buckets?

Post by sscritic » Thu Jun 19, 2014 10:57 pm

What happens when one bucket overflows? Does it all go down the drain, or do you allow the overflow to fill another bucket?

If I want
A - $2000
B - $500
C - $600

but have
A - $1000
B - $1500
C - $1600
I am grinning like the Cheshire cat. Buckets, smuckets.

The trick is knowing addition.

Maybe we need a new sub forum on arithmetic.

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Re: Budget or create saving buckets?

Post by sscritic » Thu Jun 19, 2014 11:11 pm

I have 4 checking accounts, a money market account, a savings account, and two money market funds. I needed $30k to buy a car, but none of my 8 accounts had $30k in it, even if the total of all the balances was $60k. So I moved the money around until I had $35k in one checking account. Then I bought my car. I didn't need an account holding $30k to start, I just needed a total of $30k that I could move into one account. I knew how to add the balances and see that I had more than the $30k required.

rj49
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Re: Budget or create saving buckets?

Post by rj49 » Thu Jun 19, 2014 11:26 pm

One virtue of having multiple accounts, beyond mental accounting and motivation, is to take advantage of higher rates for longer-term goals. For instance, if you're planning for a new car in 7 years, you could have put a chunk of cash in a 7-year Penfed CD at 3% earlier this year. Then you could also put money in ibonds if the timeframe is over 5 years. You could also get creative and a bit more risky by putting some money into a balanced mutual fund--if the fund has a lot of gains after a certain amount of time, you'll go on a nicer vacation, and if it loses money and never regains it, then you go camping in a state park. A lot of people save their money to gamble it away in Vegas or on a cruise ship casino, so why not take a calculated risk that dollar-cost averaged savings over time will beat a savings account with some future discretionary income purchase like a vacation? In effect that's what's lots of us do in the withdrawal phase, including me (I withdraw set numbers of shares yearly), so in good years I get to spend more, and in down years I live more simply.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 12:12 am

sscritic wrote:I have 4 checking accounts, a money market account, a savings account, and two money market funds. I needed $30k to buy a car, but none of my 8 accounts had $30k in it, even if the total of all the balances was $60k. So I moved the money around until I had $35k in one checking account. Then I bought my car. I didn't need an account holding $30k to start, I just needed a total of $30k that I could move into one account. I knew how to add the balances and see that I had more than the $30k required.
sscritic, thanks.

Certainly. If your total balance (of 8 accounts) is $60K, and you need to extract 30K. Sure, you can move money around to end up with $35K in once account, or do separate checks, or separate withdrawals...many ways.

Maybe I didn't word it right, but I was asking something similar but a little different.

What if you had only one account with only emergency funds. And you want to start saving for 3 things.
(I'll just use arbitrary numbers)
A - your car, $5K
B - a vacation you want, 3K
C - new TV, 2K

And you want to save a little bit each month for these.
$200/month for A
$50/month for B
$40/month for C
(290 total)

Like previously mentioned, one way would be to open 3 separate accounts. And you say to yourself, when Account C hits 2K, I'll go buy my TV. When Account A hits 5K, I'll buy my car, etc.

And they could fill up at different rates...you get a $500 bonus, you put it in A...another month you are able to save extra, so you put extra $60 for B. Since they are separate, you can visually see how close/far you are from each goal.

So my question was, is there a way to do this in a single account?
Because with one account you'd be putting in $290 lump sum. Obviously it's "possible" (the math would be the same for one account), just not as neat/visual. In other words, I wasn't asking the mechanics of it...but if there was a cool/nifty way to do it, a visual "hack" sort of :)

I hope I didn't make it more convoluted :p

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GerryL
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Re: Budget or create saving buckets?

Post by GerryL » Fri Jun 20, 2014 12:44 am

For many years I subdivided my single savings account in Quicken into several "accounts" for different purposes (e.g., car, house, travel). It was more of a way to psych myself into seeing the money as several pots and not a big bottom line that might make me feel rich. Although I repeatedly suggested to the folks at Quicken that they offer a way to subdivide accounts, they never added that feature. Monthly reconciliation was often a bear because I had to keep track of money I had moved into and out of the artificial accounts, and I finally felt I was okay with managing different needs in one account, so I did away with the fake subaccounts.

marielake
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Re: Budget or create saving buckets?

Post by marielake » Fri Jun 20, 2014 6:16 am

Another YNAB user here. I have several savings categories (3 different trips, home improvement, computer replacement) that I fund every week, pay deposits from and watch the balances grow. The cash can sit in one account; YNAB allows you to manage any number of savings or expenses.

sscritic
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Re: Budget or create saving buckets?

Post by sscritic » Fri Jun 20, 2014 7:18 am

kayanco wrote: Like previously mentioned, one way would be to open 3 separate accounts. And you say to yourself, when Account C hits 2K, I'll go buy my TV. When Account A hits 5K, I'll buy my car, etc.

And they could fill up at different rates...you get a $500 bonus, you put it in A...another month you are able to save extra, so you put extra $60 for B. Since they are separate, you can visually see how close/far you are from each goal.

So my question was, is there a way to do this in a single account?
Now I see where we differ; it's in the when. Two years ago I bought a house. At the time I knew that the house (and I) wanted to replace the old carpeting, get some new furniture, and get a new large screen tv. My daughter and daughter-in-law wanted me to buy a new car for the sake of my grandchildren. So there were four things I wanted to get and therefore was saving for. I had no idea which I wanted to get first; there was no timetable. As it turned out, Christmas 2012 produced the new tv, summer 2013 new wood floors to replace the carpets, and last month, after a failed smog test, the new car. I still don't have any furniture in the living room, although the grandkids like to do gymnastics there, so they are not complaining.

Now I could have just as easily bought the living room furniture first (my guess is it is second to the tv in being the least expensive), but I didn't. I started with some money in non-invested savings and added to it each month, rather than formal investments, because I knew I wanted to buy all these things. Since I had no timetable, I just weighed my desire for the items with my desire to keep a relatively large (for me) cash balance. If I had had a timetable, I might have done a Dave Ramsey snowball in reverse, i.e., buy the least expensive item first as soon as I could afford it, then the next least expensive, and so forth. In a way I have (tv then floor then car), but if I had done this in a strict way I would already have the new furniture, but the new car would have brought my cash too low for my personal comfort. Then there is the reverse reverse Dave Ramsey snowball where you buy the most expensive item first. :)

In the end, I wasn't focused on the when or the order. I just knew I needed money to buy the things I wanted, so I saved money. When I spent it was determined by how I felt at any given moment, with the exception of the new car, which was forced on me by the state.

On the other hand, if I were you and knew I wanted to take a cruise in the summer of 2015, I might save exclusively for the vacation and put off saving for the car and the tv. That is, until one of them breaks down, in which case I will need to use my vacation money for a car or tv. In the end, I am not a fan of buckets; it's all just money to be used as we decide for ourselves. Given that, I don't try to visualize the separate parts of my money, which I realize is your goal. And here I am trying to talk you out of doing so. :)

basspond
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Re: Budget or create saving buckets?

Post by basspond » Fri Jun 20, 2014 7:25 am

I am trying to make my life and accounts simpler so the thought of opening different accounts to fund individual "projects" doesn't appeal to me. I have been splitting accounts using quicken, when I want to track separately, and it seems to work for me.

sscritic
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Re: Budget or create saving buckets?

Post by sscritic » Fri Jun 20, 2014 8:43 am

I have been thinking some more.

Often people don't ask the right question. They think they have the right question, but they really don't.

What is your goal? Is your goal to be able to visualize buckets? Or is your goal to buy the stuff you want to buy?

My goal would be to buy the stuff I want to buy. Now if visualizing buckets helped me get to my goal, then good, but I don't think visualizing bucket is really your goal. So before you concentrate on how to visualize or track buckets, ask yourself if that will help you buy the things you want to buy.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 9:23 am

rj49 wrote:One virtue of having multiple accounts, beyond mental accounting and motivation, is to take advantage of higher rates for longer-term goals. For instance, if you're planning for a new car in 7 years, you could have put a chunk of cash in a 7-year Penfed CD at 3% earlier this year. Then you could also put money in ibonds if the timeframe is over 5 years. You could also get creative and a bit more risky by putting some money into a balanced mutual fund--if the fund has a lot of gains after a certain amount of time, you'll go on a nicer vacation, and if it loses money and never regains it, then you go camping in a state park. A lot of people save their money to gamble it away in Vegas or on a cruise ship casino, so why not take a calculated risk that dollar-cost averaged savings over time will beat a savings account with some future discretionary income purchase like a vacation? In effect that's what's lots of us do in the withdrawal phase, including me (I withdraw set numbers of shares yearly), so in good years I get to spend more, and in down years I live more simply.
"and if it loses money and never regains it, then you go camping in a state park." LOL, I like how you accounted for the downside as well ;p

rj49, excellent post, thanks!
So far I've been very short-term focused, like months or 1 year. So even though I'm still unfamiliar with using CDs, iBonds, etc... I like the basic idea. Rather than just keep money in a checking account (what I do), if we can figure out the time horizons, we can get better use of it.

Mannn, tying up money for 7 or even 5 years! That seems like a LONG time! I'll have to cajole my brain into letting me do that :p
So far what I've done (since my lone checking account) is, I opened a saving account with GE capital retail bank (synchrony bank) @ 0.95 ...and in the process of setting up TreasuryDirect account for I Bonds (still haven't decided how much to buy).

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Hawkeye5
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Re: Budget or create saving buckets?

Post by Hawkeye5 » Fri Jun 20, 2014 10:15 am

I also use YNAB and just set up "sinking funds" under the savings category. These sinking funds provide money for anticipated or reoccurring expenses. I've a rainy day, home and car maintenance, medical, beef (I purchase half a beef a year), property tax, insurance deductible....you get the idea. This way when it is time to pay the property tax I know exactly where the money is coming from. It’s just another way of planning.

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Re: Budget or create saving buckets?

Post by mlipps » Fri Jun 20, 2014 12:42 pm

YNAB is great. You can also do this in the Virtual Wallet version of PNC's accounts. You can do it in the "Reserve" (aka secondary checking) or "Growth" (aka savings) account using the Wish List feature. I love it. Yes, of course it's just mental accounting (it drives my husband nuts), but it works for me.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 12:44 pm

sscritic wrote:... I still don't have any furniture in the living room, although the grandkids like to do gymnastics there, so they are not complaining.

haha...nice!! :D

In the end, I wasn't focused on the when or the order. I just knew I needed money to buy the things I wanted, so I saved money. When I spent it was determined by how I felt at any given moment, with the exception of the new car, which was forced on me by the state.
...
Yep, agree...that would work! Pick one goal, put all savings in one account, when have enough for A -> do A. Start over, when enough for B -> do B....nothing wrong with that.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 12:58 pm

sscritic wrote:I have been thinking some more.

Often people don't ask the right question. They think they have the right question, but they really don't.

For me at least, that's actually true. What I find is that after a little back and forth, the questions/intent/goal becomes clearer. Or someone might suggest something, way more swell :p

My goal would be to buy the stuff I want to buy. Now if visualizing buckets helped me get to my goal, then good, but I don't think visualizing bucket is really your goal. So before you concentrate on how to visualize or track buckets, ask yourself if that will help you buy the things you want to buy.
Here's why I'm leaning towards a bucket/visual type approach:

I have 11K in my saving account, 10K are for a future event in 2015. Now I want to save for other stuff as well, like vacation, etc.

But when I look at the balance, it throws me off a bit. I tend to think I have 11K to worth with...then I have to mentally remind myself that 10K is already earmarked, and I only have 1K to play with :)

So if there was a way I could see my savings balance as:
Total - 11K
Earmarked for 2015 - 10K
Remaining - 1K

So let's I'm at 13K total...whenever I'll see that, I'll have to always: 1. Remember the 2015 earmarked sum 2. Always do the extra mental calculation: I really only have 3K...not ready for vacation yet... ;)

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 1:10 pm

Hawkeye5 wrote:I also use YNAB and just set up "sinking funds" under the savings category. These sinking funds provide money for anticipated or reoccurring expenses. I've a rainy day, home and car maintenance, medical, beef (I purchase half a beef a year), property tax, insurance deductible....you get the idea. This way when it is time to pay the property tax I know exactly where the money is coming from. It’s just another way of planning.
mlipps wrote:YNAB is great. You can also do this in the Virtual Wallet version of PNC's accounts. You can do it in the "Reserve" (aka secondary checking) or "Growth" (aka savings) account using the Wish List feature. I love it. Yes, of course it's just mental accounting (it drives my husband nuts), but it works for me.

Yep...I like that. So at any time, you have a decent idea how much you can afford to spend on any of those things.

Of course it's not set in stone, you might spend more on the car maintenance that allocated...so you re-allocate from elsewhere...but overall I like the idea!

I think if all this money was sitting lump-sum, one might spend a large chunk on one thing, forgetting that in 3 months there's another large expenditure.
Or anytime you look at the total sum, you'd keep having to do a quick mental tracking of what all you'd be spending it on in the near future....so certainly I can see the merit of YNAB type deal.

Does YNAB link to a checking/saving account? Such that it pulls the total $ value, and then you slice it in the YNAP interface?

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 1:14 pm

btw, I was researching online and found (all free):
Mint
GnuCash
Money Manager EX

Not sure if they'll do what we are discussing in this thread, but I'll take a look, along with YNAB.

NOVACPA
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Re: Budget or create saving buckets?

Post by NOVACPA » Fri Jun 20, 2014 1:17 pm

kayanco wrote:
Hey NOVACPA, thanks,
Ramit Sethi of 'I will teach you to be rich' is a good guy, I was actually reading the same article when I was doing my own research just before posting this thread...his book look really popular on Amazon as well.

Since you are an account, you'd be great with numbers...I looked up the Fidelity account, but the interest rate of 0.07 doesn't look that great...do you think the convenience outweighs a better interest rate?

Thanks!
I don't chase yields for my daily operations. Everything besides the primary checking is run at a $0 balance. If it needs to be invested, then it is invested according to my AA and then moved back into the account prior to the expense.

Once my primary checking hits a threshold, I move money out of it and into a taxable brokerage, according to my AA. Everything else is on Auto-Pilot with direct deposit and auto investing.

As for budgeting, I do not. I have everything come off of the top (401k, HSA, Roth, Mortgage Payment, Car Payment, Housing Expenses). The remainder goes to my checking. Everything is tracked in Quicken and I manage cash-flow at that point. If I want to go on a $5000 vaction, I just put a $5000 bill due in 1 year and see how the cash-flow is affected.

*Edit: I hope this answered your question. Reading through the thread, it looks like people gave some different, albeit, great ideas with whichever course you take. I will no be responding to this thread as I am headed to the beach :beer so if there are questions asked to me I'll respond when I get back. That is good forum etiquette, right?*
Last edited by NOVACPA on Fri Jun 20, 2014 1:27 pm, edited 1 time in total.

mlipps
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Re: Budget or create saving buckets?

Post by mlipps » Fri Jun 20, 2014 1:25 pm

kayanco wrote:btw, I was researching online and found (all free):
Mint
GnuCash
Money Manager EX

Not sure if they'll do what we are discussing in this thread, but I'll take a look, along with YNAB.
YNAB is manual, as is GnuCash. Mint is automated, but it does what you describe REALLY poorly, which is the number one reason I switched from Mint to YNAB two years ago.

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 1:30 pm

NOVACPA wrote: ..Everything else is on Auto-Pilot with direct deposit and auto investing.
..I have everything come off of the top (401k, HSA, Roth, Mortgage Payment, Car Payment, Housing Expenses). The remainder goes to my checking. Everything is tracked in Quicken and I manage cash-flow at that point...
Excellent, very schick!

I'm trying to dabble into this automation business :)

Do you know if Mint can do what you do with Quicken? Or any free alternative to Quicken? (GnuCash, Money Manager EX..?)

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 1:32 pm

NOVACPA wrote:... I will no be responding to this thread as I am headed to the beach :beer so if there are questions asked to me I'll respond when I get back. That is good forum etiquette, right?*
YES!! Enjoyyyy :sharebeer

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 1:34 pm

mlipps wrote:
kayanco wrote:btw, I was researching online and found (all free):
Mint
GnuCash
Money Manager EX

Not sure if they'll do what we are discussing in this thread, but I'll take a look, along with YNAB.
YNAB is manual, as is GnuCash. Mint is automated, but it does what you describe REALLY poorly, which is the number one reason I switched from Mint to YNAB two years ago.
So YNAB = GnuCash ??
(a little bit? :happy)

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NORDO
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Re: Budget or create saving buckets?

Post by NORDO » Fri Jun 20, 2014 1:56 pm

archbish99 wrote:Take a look at YNAB. You put money into a category, and the balance accumulates until it's spent. You can put notes about how much you're trying to save up, if needed.
archbish99 wrote:Yep -- we put $400/month into our "home improvement" category in YNAB; this month, we're getting new countertops, because YNAB says we have enough money for them. The checking account balance will probably look different, but none of the other budget categories will.
kayanco wrote:I read about YNAB in your previous post, and also last night I came across YNAB when I was messing with Mint...YNAB idea sounds good, but it's paid.
Let me see if Mint will do something like what you are talking about.
marielake wrote:Another YNAB user here. I have several savings categories (3 different trips, home improvement, computer replacement) that I fund every week, pay deposits from and watch the balances grow. The cash can sit in one account; YNAB allows you to manage any number of savings or expenses.
Hawkeye5 wrote:I also use YNAB and just set up "sinking funds" under the savings category. These sinking funds provide money for anticipated or reoccurring expenses. I've a rainy day, home and car maintenance, medical, beef (I purchase half a beef a year), property tax, insurance deductible....you get the idea. This way when it is time to pay the property tax I know exactly where the money is coming from. It’s just another way of planning.
mlipps wrote:YNAB is great. You can also do this in the Virtual Wallet version of PNC's accounts. You can do it in the "Reserve" (aka secondary checking) or "Growth" (aka savings) account using the Wish List feature. I love it. Yes, of course it's just mental accounting (it drives my husband nuts), but it works for me.
Count me in as another YNAB devotee. We used to use a Mint-like system (our credit union basically offered their own flavor of Mint) but we made the switch to YNAB the beginning of last year.

In short, it's spectacular. I love the ability to roll balances and - like what you're asking about here - maintain "savings accounts" without physically separating the money at the bank.

We use the category hierarchy inside the program to manage the budget. So we have a few top-line categories (Needs, Wants, Savings, Rainy Day, Gifts) and then break those down into subcategories (Mortgage/Utilities/Groceries in Needs, Dining Out/Entertainment in Wants, Car and Home Maintenance/Lawn and Garden in Rainy Day, Roth/Vacation/New Car in Savings, etc.) for tracking purposes.

It works really well because the internal reporting lets you quickly see where your money's going. It's also great, for example, to see on a monthly/yearly basis what we spend on Needs to know how large of an emergency fund we need. And as with anything in YNAB, it's actual-account-where-the-money-resides independent. We have two savings and one checking account (and a bunch of credit cards) but it doesn't really matter what dollars are where; thanks to the "live on last month's income" philosophy of the program, any money spent is fully accounted for.

It's totally worth your $60 (or $54 through a referral link from any current user). Seriously, it's helped us save magnitudes more than it cost - and we were already rather frugal, responsible Bogleheads pre-YNAB!

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 2:09 pm

Whooaa! So much love for YNAB :p

May I dare ask, can someone post a Quicken vs. YNAB vs. Mint comparison?
(maybe include Pros/Cons :happy)

Jack FFR1846
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Re: Budget or create saving buckets?

Post by Jack FFR1846 » Fri Jun 20, 2014 2:53 pm

I use excel

My kids have "accounts" in it. My odest puts money from his job in. His graduation money meant for college expenses is there. The actual money is pooled so I can keep the min $25,000 in a high yield, limited access account at the credit union.

I don't separate accounts for things I would save for. I don't really make a budget, either. We just buy what we can afford.
Bogle: Smart Beta is stupid

mikep
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Re: Budget or create saving buckets?

Post by mikep » Fri Jun 20, 2014 2:55 pm

I use Smartypig, by default it comes with goals. Works for me, and they also pay 1%

Grt2bOutdoors
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Re: Budget or create saving buckets?

Post by Grt2bOutdoors » Fri Jun 20, 2014 3:24 pm

Neither - we buy what we can afford. We have two checking accounts, one savings account, one CD.
Money comes in, money goes out, the end of the month, excess is swept into a taxable account.

Multiple accounts are what corporations typically use - i don't have the patience for it on a personal level. Simplicity! (unlike my investment accounts :wink: )
"One should invest based on their need, ability and willingness to take risk - Larry Swedroe" Asking Portfolio Questions

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NORDO
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Re: Budget or create saving buckets?

Post by NORDO » Fri Jun 20, 2014 4:49 pm

kayanco wrote:Whooaa! So much love for YNAB :p

May I dare ask, can someone post a Quicken vs. YNAB vs. Mint comparison?
(maybe include Pros/Cons :happy)
Yeah, it's often seen as targeted towards people with financial issues, but it seems lots of Boglehead-type, financially savvy people use it too. Heck, their own user survey indicated that.

No doubt it may be a little biased, but they have a comparison:
http://www.youneedabudget.com/ynab-vs-mint

For me, the reason I switched was because my data was local. I got sick and tired of random upgrades to an online interface suddenly re-categorizing transactions or otherwise messing with things I had spent hours working on. That was the impetus for the switch but the overall philosophy (and general ease of use) are what keep me using it. Rolling balances, assigning income to the next month, the mobile apps and cloud sync - it's all really just a fancy software implementation of envelope budgeting / an Excel spreadsheet... but it works so darn well I can't help but recommend it to everyone.

Take a look at their philosophy. It really is core to the whole thing - and if you embrace it, I bet you'll come to love it too:
http://www.youneedabudget.com/method

kayanco
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Re: Budget or create saving buckets?

Post by kayanco » Fri Jun 20, 2014 5:01 pm

NORDO wrote:
kayanco wrote:Whooaa! So much love for YNAB :p

May I dare ask, can someone post a Quicken vs. YNAB vs. Mint comparison?
(maybe include Pros/Cons :happy)
Yeah, it's often seen as targeted towards people with financial issues, but it seems lots of Boglehead-type, financially savvy people use it too. Heck, their own user survey indicated that.

No doubt it may be a little biased, but they have a comparison:
http://www.youneedabudget.com/ynab-vs-mint

For me, the reason I switched was because my data was local. I got sick and tired of random upgrades to an online interface suddenly re-categorizing transactions or otherwise messing with things I had spent hours working on. That was the impetus for the switch but the overall philosophy (and general ease of use) are what keep me using it. Rolling balances, assigning income to the next month, the mobile apps and cloud sync - it's all really just a fancy software implementation of envelope budgeting / an Excel spreadsheet... but it works so darn well I can't help but recommend it to everyone.

Take a look at their philosophy. It really is core to the whole thing - and if you embrace it, I bet you'll come to love it too:
http://www.youneedabudget.com/method
Thanks. I read a few review on YNAB, already download it, will be taking a look at it soon...along with Mint, and GnuCash.

Did you ever use Quicken, any idea how it compares to YNAB?

One thing I read about YNAB, it doesn't automatically connect to banks...so I'm guessing initially it will take a while to set it up...

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archbish99
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Re: Budget or create saving buckets?

Post by archbish99 » Fri Jun 20, 2014 5:12 pm

kayanco wrote:May I dare ask, can someone post a Quicken vs. YNAB vs. Mint comparison?
(maybe include Pros/Cons :happy)
I've used YNAB for about two years now, Quicken for ~6 before that, and Excel before Quicken. I've played with Mint on occasion, but never used it full time, so take my comments there with a grain of salt.

Quicken
Pro: Automatic import from most banks, albeit *very* slow in my experience
Pro: Ability to track investment holding (number of shares, basis, etc.)
Pro: Can be used from multiple machines *if* the Quicken file is synced using some tool (OneDrive, DropBox, etc.)
Con: Paid ($40-$115 retail, depending on desired feature set; less on older versions)
Con: Cumbersome support process
Con: Intentional obsolescence every 3 years -- import functionality stops working, even if software and bank haven't changed. Upgrade at full or nearly-full retail price.
Con: Budgeting not very robust. Spending within budget categories is tracked, but over- or under-spending have no effect on next month's budget or other categories. Multi-month budgeting handled with "savings goals," which manifest as separate accounts and aren't actually tracked as they compare to the real account's balance.

Mint
Pro: Automatic import in background; speed is irrelevant because you're not waiting
Pro: Use from anywhere; cloud service
Pro: Free! (Updates are also free, for obvious reasons.)
Con: No investment tracking
Con: Similar budgeting experience to Quicken; see comments above.

YNAB
Pro: Most robust budgeting solution. Software built around a budgeting process, not a budgeting feature in financial tracking software.
Pro: Software works "forever" -- major versions require (paid, but discounted) upgrade, minor versions are updated for free. Even if you opt not to upgrade, software keeps working as long as banks continue to provide the supported file formats.
Pro: Hyper-responsive support staff. I usually get personal e-mails back within a couple hours, even to feedback. In one case, I got a reply from the owner of the company and we proceeded to discuss my feedback. (We continue to disagree, but I respect his position.) I've seen my feedback show up in future releases.
Con: Paid -- $60, or $54 with anyone's affiliate link (which forum policy prohibits posting)
Con: Download process is manual. I find that by bookmarking my banks' download pages, I can do the downloads faster than Quicken used to, but it is still more work.
Con: Investment tracking is balance-only
I'm not a financial advisor, I just play one on the Internet.

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archbish99
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Re: Budget or create saving buckets?

Post by archbish99 » Fri Jun 20, 2014 5:43 pm

kayanco wrote:One thing I read about YNAB, it doesn't automatically connect to banks...so I'm guessing initially it will take a while to set it up...
I would actually say that makes it take less time, unless you have an insane number of accounts. In Quicken, you have to configure the account, find the institution in their list, give it your username and password, answer challenge questions, and wait while it downloads your last several months of transactions.

In YNAB, you create a new account with a name, type, and current balance. Done. The first time you download transactions, it'll ask you which local account that online account should be paired with, and it will remember next time.
I'm not a financial advisor, I just play one on the Internet.

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Dutch
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Re: Budget or create saving buckets?

Post by Dutch » Fri Jun 20, 2014 6:14 pm

It seems like the bucket approach would postpone purchases? If you have 10 buckets filled to 95%, then you artificially haven't reached any of your 10 goals yet, but you have enough money in total for the first 8 or 9 goals.

Maybe that's a good thing :wink:

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Hawkeye5
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Re: Budget or create saving buckets?

Post by Hawkeye5 » Fri Jun 20, 2014 8:41 pm

Dutch, true if you are saving to purchase a couch or something of that nature and want to pay cash. Most, but not all, my sinking funds are for future payments at specific times. Property tax is an example. Paid once a year for a known amount so 1/12th goes into the sinking fund for property tax each month. Pay the tax when due, repeat.

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NORDO
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Re: Budget or create saving buckets?

Post by NORDO » Sat Jun 21, 2014 10:48 am

kayanco wrote:Thanks. I read a few review on YNAB, already download it, will be taking a look at it soon...along with Mint, and GnuCash.

Did you ever use Quicken, any idea how it compares to YNAB?

One thing I read about YNAB, it doesn't automatically connect to banks...so I'm guessing initially it will take a while to set it up...
I haven't really used Quicken - never loved the idea of how they manage upgrades in the software.

I did use Microsoft Money many years ago, but that's probably not a valid comparison in this day and age.

The lack of auto-downloading *seems* like a bad thing if you're coming from the Quicken / Mint side of things, but that's ultimately why YNAB is so great. Bear with me for a second...

What it really comes down to is awareness. Just like dieting or exercise, if you can actually track what you eat on a regular basis, you're 90% of the way to success. I speak from experience - I've lost a decent amount of weight largely due to watching what I eat, not exercising 60 minutes every day. YNAB is just like that on the finance side of things. By having to spend a minute or two here or there to enter transactions, allocate dollars, and reconcile, your money is always in front of you. Simply being forced to pay a little more attention tends to result in a much better appreciation of (and sticking to!) the budget.

As I mentioned before, we were good with finances pre-YNAB. But it was still easy to spend $50 extra dining out sometimes, or do the same elsewhere. That's pretty much stopped since we started using YNAB and have to choose where to re-allocate money in the budget if we exceed the balance in any category.

I basically spend 15-20 minutes every week downloading transactions from our banks to reconcile - and we use their mobile apps / the desktop version to enter transactions as they occur throughout the day. That might be worst than most people, but it's because we have 10+ accounts (credit cards, checking, savings) on budget and I also track our investment accounts off-budget. (What do I mean by on/off budget? See here).

So, at the end of the day, to answer your question - I really don't think the setup will take that long. They offer a TON of free classes online if you want to learn more, too.

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