Split between categories and accounts

Ricardo: Woah! Let's fix this mindset right away. Something is wrong with what you're trying to do, Ricardo. Transferring money from one account to another does not have anything to do with your categories or funding a savings goal. Your envelopes/categories don't care which account the money is in. You can have $1 in 1000 accounts, or $500 in 2 accounts, or $1000 in one account. In all three cases, you have $1000 available to assign to your categories. If you have the idea that the dollar amount "available" in your category should match the dollar amount in your account, this is wrong. Envelope budgeting is all about giving your money a job. Putting money in a savings account is not "giving it a job". All you're doing is moving it somewhere else. You still need to tell the dollars what they will be spent for. That's where an "emergency fund" or "new car" category comes in.

Igor Thanks for the reply. I get what you’re saying, but I’m not sure you understood me fully. l try to make a monthly deposit into several different kinds of savings, emergency fund, investments, etc. I would like to have those as monthly targets to assign to and project my budget. At the same time, I would like to have those balances accounted for in my net worth, so I add them as accounts. So when I deposit that month’s contribution to my savings account, I am creating a transaction from my checking towards it. At the same time, my monthly goal can’t be counted as funded. Do you think this is the wrong approach? Should I not count these fixed savings in my budget and simply add the transactions? It isn’t game breaking, but would be nice to have. The assignment still works and counts as normal. I could also just make two separate transactions, one from my checking and income into the savings, but one would have to have the missing category, right?

Ricardo: Yes, that's the wrong approach and from my perspective that is what I outlined in my previous comment. Maybe we're talking past each other here, or I'm further not understanding. First, there is no connection with how much money you have in a specific bank account with how much you have available in a specific category. In Kualia, YNAB, and other envelope budget apps, we add up all of your money from every account into one big pool of money. This means moving money from one account to another has no effect on you any calculation, category, target, or anything. Second, you can only fund your savings category target with new money from your paycheck, or by taking money out of another category. This may help the most: Get rid of your savings account. (I'm joking, but hear me out). You are already using a system that segments your money into groups (envelopes/categories). And that system is Kualia. You don't need to do this again with a Savings account. Savings accounts were created before budgeting apps, and they were basically just one "category" that you put money into. With Kualia and other envelope budget apps, it doesn't make sense to have a savings account, or even multiple accounts. Each "category" is an account, if you think about it.

Igor I might have left out a key part of my intention. I don’t want my savings balance to count toward my monthly budget. In fact, I even submitted a feature request to allow ignoring certain accounts from the budget calculation to which you replied it might be possible in the future. Here’s what I’m trying to do: -I have both a checking and a savings account added, so that the total reflects my net worth. These are two real, actually separate accounts I have, in different banks even. -Each month, I want to budget €100 from my paycheck in my checking into an emergency fund category. -I then make a transfer from checking to savings, which represents that emergency fund category action. -Ideally, I’d like that same transaction to also fund the category, so I see that I’ve hit my monthly goal. To be clear, I don’t use the emergency fund category as an accumulating goal over time. I just want to track that I made the €100 contribution from my budget for that month. The savings account itself holds the balance, and I won’t budget it further. I totally understand that in envelope budgeting, moving money between accounts doesn’t affect categories. But I think in cases like this, especially when users might want to track net worth and set recurring transfers to savings/investments, there’s value in allowing account transfers to optionally fund a category. Maybe it’s a niche use case, and I hope I’m not being stubborn here, but I suspect that with investment accounts and net worth tracking becoming more integrated, more users will want to do something similar. In any case, as is, I can work with it!

Ricardo: Okay that makes a lot more sense now, thank you for that explanation. I'm sorry to say that I think you're still wrong here. If you think about the reason for envelope budgeting, you create an envelope so that you can put money into it, and then at a later time you can use that money to pay for things. When we add investment account support, here's how it will work: You'll create a category called "Investments" and set a target of €100 per month. When you get your paycheck, you will assign €100 to your Investments category. Now, you have €100 sitting there in the envelope waiting to be spent. A few days later, your investment account pulls money out of your checking for €100. This is considered an expense, and you will create a transfer for -⁠€100 from your checking account into your Investment account, and choose the "Investments" category as the category you want to spend from. Finally, you now have €0 available in your Investments category because you've spent all of the money. If we try to map this flow onto your scenario, it doesn't work. It sounds like you want to "spend" from the Emergency Fund category before it even has any money in it, and you want that to count as you funding it, all in one action. But, this is logically impossible (I think). Imagine that I did the same thing for Netflix. I create a Netflix category, and then click the button that toggles on the setting you're talking about. Well, when the Netflix transaction comes in, and I had not assigned money to the envelope yet, the envelope will go negative. Maybe you're suggesting that the app automatically funds the category when it goes into the negatives? If so, I see that going wrong really fast.

Ricardo: Here's what I think you should do for now (or what you're already doing): Ensure your Savings account is not added to Kualia. If you're not using the money to budget with, it shouldn't be added until we add the feature where you can add off-budget accounts. 1. Create a category called "Savings Transfer" or whatever, or you may already have one. 2. Set the target to €100 every month. 3. On the first of the month, assign €100 to it. 4. Make a transaction of -⁠€100 from Checking, and choose the "Savings Transfer" category. I'm either correct here, or totally not understanding how your suggestion would work in practice. If you have time to literally draw out on paper how the money moves, or give a more detailed explanation, I would be much appreciative.

Igor I understand what you mean conceptually, you are treating savings as a goal with a definite end date and purpose of spending, if I got it right. It makes sense for, say, saving up for big purchases, vacations, etc. You assign monthly up until you get the goal and then spend on it, makes sense. I am using that for my car registration, which I pay annually, for instance, and works great that it divides the goal between the months until then, great job, one of the features that sold me on you! However, I am talking loooooong term savings. For instance, you have a predefined retirement category. How would you set a goal for that? And when would you have it as spent? The way you described it before, it sounds like those savings goals are supposed to sit in your account. You should contribute monthly, of course, but it could be very variable and without a certain due date, but those contributions, in my opinion, should be counted as an expense, be it transferring to an IRA, or withdrawing and keeping it under your mattress. Same for an emergency fund, which I transfer out to a kind of certificate of deposit, in my case. I get that envelope budgeting separates money’s purpose from its location. But still, when I move money to a separate account, that’s me giving it a purpose. It’s money I no longer want to touch for regular expenses. It makes sense to me that the budget should reflect that move and count it as fulfilling a goal. I’m just treating my savings the same way one would treat a basic long-term investment. I’m “paying myself”, and I would like that action to count in the monthly flow. The way you described the investment feature is exactly what I mean, but instead of transferring to an investments account, I do it to a savings account and spend that month’s contribution. +1000 paycheck i.e. budget 100 assigned to “savings (transfer)” -⁠100 from my checking with my paycheck, categorized as “savings”, spent for that month’s budget goal. +100 into my savings *account*, outside of budget total and calculations. Net worth stays the same Again, I can remove my savings account, of course. I was only insisting because your net worth tab and the monthly chart would also be cool to check on overall, well, net worth, even if I don’t use it all to budget for the month. I have other apps for that, but would be cool to see it all in one place as well. I also understand if it’s not the main goal for kualia.