For those who use YNAB, how do you manage keeping money in some of the long-term categories vs. investing in the market? For example, I don't need a new car now but I probably will in the next 5 years. YNAB tools would suggest I save up for this using money in savings, but I feel that money would be best invested. Same thing applies to home improvement projects, vacations, etc.

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If it suggests that, which I’m not sure I agree with, it certainly doesn’t require it. The way I handle this is to have a budget category for it, and also have a Tracking account in my budget that represents the brokerage account.

So let’s say I have $5k in my checking account that I want to earmark for a purchase in 5 years (let’s say a vacation), and I want to invest that money in low-risk equities. I would create:

1) a budget *category* for whatever that purchase is

2) an *account* that reflects where the money will actually be transferred to.

When I wanted to dedicate that money, two things would happen:

A) In my budget, I would allocate $5k to my “Vacation 2027” category

B) In my brokerage account, I would transfer $5k from checking to brokerage. I would then record that transaction as a transfer from checking to savings in my Accounts view.

I can say more but don’t want to go too fast.

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This makes so much sense! Thank you so much for typing all this up. I'm definitely going to use this approach going forward. It's exactly what I'm looking for!

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I only keep buckets in YNAB for things I anticipate spending on in the next few years/things I’m actively “saving for.” In other words, sinking funds that I would not be in a pinch with if I needed to spend them tomorrow (includes vacation savings, auto maintenance, home improvement, emergency fund). I personally find that to be a safer option than investing in the market since you never know and would hate to be forced to sell in a downturn. That said, I have loads of other investments that I don’t record in YNAB. I view those as long term holdings and they don’t have a “job” other than general security for the future.

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I like this mindset! Thank you!

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