How to track individual savings goals in investment accounts?
December 20, 2024 7:40 AM Subscribe
My wife and I would like a system to track individual savings goals within our larger pooled investments.
For our day-to-day budgeting, we use YNAB. We have been using it for 10+ years, are very comfortable and happy with it, and it works well for our needs. The problem is that once we transfer the money into our brokerage accounts, it goes "off-budget" and so it's hard to account for it in terms of our savings goals.
For example, we have long-term goals for some home renovations, for our kids' college funds, etc, and we save money monthly toward each of these goals. But once they go into the brokerage accounts, they're all pooled together, so it's hard to keep track of individual goals.
Possibly relevant information:
To reiterate, what I'm looking for is a way to track individual long-term savings goals within our investment accounts. That could involve software (paid is ok), it could involve spreadsheets, whatever. It would be nice if we could have it connect to the Raymond James platform to download transactions etc, but that's not a hard requirement.
For our day-to-day budgeting, we use YNAB. We have been using it for 10+ years, are very comfortable and happy with it, and it works well for our needs. The problem is that once we transfer the money into our brokerage accounts, it goes "off-budget" and so it's hard to account for it in terms of our savings goals.
For example, we have long-term goals for some home renovations, for our kids' college funds, etc, and we save money monthly toward each of these goals. But once they go into the brokerage accounts, they're all pooled together, so it's hard to keep track of individual goals.
Possibly relevant information:
- We are in Canada and we invest our money with a group of financial advisors through Raymond James.
- My wife and I are both US citizens and we have somewhat limited options for our investments because of the complicated restrictions that the US government places on us. Our brokerage specializes in dealing with these situations and so switching to a different brokerage or handling the investments ourselves is not really an option.
- The Raymond James web interface pretty much sucks. As far as I can tell, there is no way to create buckets or otherwise track individual goals within the account.
To reiterate, what I'm looking for is a way to track individual long-term savings goals within our investment accounts. That could involve software (paid is ok), it could involve spreadsheets, whatever. It would be nice if we could have it connect to the Raymond James platform to download transactions etc, but that's not a hard requirement.
I can think of three options, none of them great. The first is one is to open one brokerage account per bucket at Raymond James? That creates a bunch of friction around moving money between buckets (which may even trigger taxable events), but if the number of buckets is small it might be the simplest and most explicit way that leaves YNAB essentially untouched (other than to track the new accounts).
The second is to have "virtual buckets" that exist only in YNAB and map to a fraction of the assets in your existing brokerage account, and track those virtual buckets in the YNAB budget. To do this, you'd need to keep the brokerage "on budget" in YNAB, and assign it to Budgeted categories that you do not spend against. That may make the various analysis options a bit fiddlier to use (e.g. you're going to find yourself unchecking those categories any time you want to figure out how much you're spending). But I think it will work?
The third option is also "virtual buckets" backed by a single real brokerage account, but to represent those with multiple "virtual" off budget accounts in YNAB. Keeping these up to date might be fiddly.
(Note these options all assume the problem you're trying to solve is tracking information. If the problem you're trying to solve is that you do not trust yourself not to spend your kids college savings on a new car, that's a different problem!)
posted by caek at 7:59 AM on December 20
The second is to have "virtual buckets" that exist only in YNAB and map to a fraction of the assets in your existing brokerage account, and track those virtual buckets in the YNAB budget. To do this, you'd need to keep the brokerage "on budget" in YNAB, and assign it to Budgeted categories that you do not spend against. That may make the various analysis options a bit fiddlier to use (e.g. you're going to find yourself unchecking those categories any time you want to figure out how much you're spending). But I think it will work?
The third option is also "virtual buckets" backed by a single real brokerage account, but to represent those with multiple "virtual" off budget accounts in YNAB. Keeping these up to date might be fiddly.
(Note these options all assume the problem you're trying to solve is tracking information. If the problem you're trying to solve is that you do not trust yourself not to spend your kids college savings on a new car, that's a different problem!)
posted by caek at 7:59 AM on December 20
The second is to have "virtual buckets" that exist only in YNAB and map to a fraction of the assets in your existing brokerage account, and track those virtual buckets in the YNAB budget. To do this, you'd need to keep the brokerage "on budget" in YNAB, and assign it to Budgeted categories that you do not spend against.
posted by caek at 7:59 AM on December 20
This is exactly how I do it with YNAB. Granted, I do it with checking/savings accounts, not brokerage accounts.
I'd do this: mark the brokerage account as "budgeted." On the Budget page, create a category group called "Raymond James." Under that group, create categories for your long term savings goals. Categorize all the funds in the account, even if you have to create an "uncategorized" category.
Of course, whenever there are contributions, withdrawals, gains, or losses within the account, they'll have to be added to or subtracted from categories. You can always make sure everything is accounted for by checking the account total against the total in the "Raymond James" category group.
posted by Boxenmacher at 8:46 AM on December 20
posted by caek at 7:59 AM on December 20
This is exactly how I do it with YNAB. Granted, I do it with checking/savings accounts, not brokerage accounts.
I'd do this: mark the brokerage account as "budgeted." On the Budget page, create a category group called "Raymond James." Under that group, create categories for your long term savings goals. Categorize all the funds in the account, even if you have to create an "uncategorized" category.
Of course, whenever there are contributions, withdrawals, gains, or losses within the account, they'll have to be added to or subtracted from categories. You can always make sure everything is accounted for by checking the account total against the total in the "Raymond James" category group.
posted by Boxenmacher at 8:46 AM on December 20
Response by poster: About this:
posted by number9dream at 9:37 AM on December 20
Of course, whenever there are contributions, withdrawals, gains, or losses within the account, they'll have to be added to or subtracted from categories.Yes, this is a huge part of the difficulty if we manage this in YNAB, and it's a big part of the reason why I asked this question. The consequences of this approach seem to me to be these:
- Anytime there's a fluctuation in value (or at least as often as one cares to record the fluctuations) you have to split those fluctuations up across all of the "virtual buckets" according to the percentage of assets in each bucket.
- Anytime you make contributions, you have to update those percentages, because you're not necessarily contributing the same amount to each bucket (and the buckets may not have the same starting percentages anyway).
- Before recording any contributions, you have to make sure that you're up-to-date on the current value (otherwise the percentages associated to each bucket may get skewed).
posted by number9dream at 9:37 AM on December 20
you have to split those fluctuations up across all of the "virtual buckets" according to the percentage of assets in each bucket
Do you really need these buckets to be fixed percentages of your brokerage account? If this were me, my saving target would plan to save a particular amount for a college fund or a vacation, not a percentage of my brokerage account.
If that's true for you too, there's a less error-prone approach to keeping things reasonably up to date: create an extra "unallocated savings" bucket that you update more regularly as a kind of slush fund (which is what you have now anyway). Its balance would be the current brokerage balance less the the sum of the other buckets (which is mostly unchanging), so it's a quick edit. And as long as it's up to date, the balance of the brokerage (and your net worth) according to YNAB is correct.
And then inside YNAB at a frequency you choose (which does not need to be the same as the frequency with which you update the "unallocated savings" category), you can move money from "everything else" category to the other categories. This is all moving inside YNAB so it's not error prone, unless your definition of an error is "the vacation category is not precisely X% of the total", which like I say, would not be my definition.
posted by caek at 10:14 AM on December 20 [3 favorites]
Do you really need these buckets to be fixed percentages of your brokerage account? If this were me, my saving target would plan to save a particular amount for a college fund or a vacation, not a percentage of my brokerage account.
If that's true for you too, there's a less error-prone approach to keeping things reasonably up to date: create an extra "unallocated savings" bucket that you update more regularly as a kind of slush fund (which is what you have now anyway). Its balance would be the current brokerage balance less the the sum of the other buckets (which is mostly unchanging), so it's a quick edit. And as long as it's up to date, the balance of the brokerage (and your net worth) according to YNAB is correct.
And then inside YNAB at a frequency you choose (which does not need to be the same as the frequency with which you update the "unallocated savings" category), you can move money from "everything else" category to the other categories. This is all moving inside YNAB so it's not error prone, unless your definition of an error is "the vacation category is not precisely X% of the total", which like I say, would not be my definition.
posted by caek at 10:14 AM on December 20 [3 favorites]
Maybe I’m missing something, but I’d think this is solvable in Google Sheets using a series of net present value functions.
I really don’t see why you’d need to minutely track gains/losses to know whether your investments are on track. You need to know what current total dollar amount will get you to your desired future dollar amounts and whether you have or don’t have that dollar amount in your investments today, and that’s doable without granular tracking.
For example, if I know I want to have $100,000 saved by March 2035 for goal 1, $50,000 saved by March 2030 for goal 2, and $50,000 saved by March 2028 for goal 3, I could use a net present value formula that shows what $$ value I should be at currently with regard to each of those goals if I want to hit it (taking into account the different timelines and potentially different expected interest rates). If the sum of the three outputs is less than or equal to your total current savings, you’re on track (because you have more in savings than the math says you need). If it is greater than, then you would be able to determine what % short you are across the entire investment scheme. If one investment set is more of a priority than another, you could choose to view that as “fully funded,” and then determine by what $$ amount or % your other investments are lagging behind.
(I do have a fever currently and it’s been a few years since I updated our retirement spreadsheet’s formulas, so it’s possible that, like, another formula would be better. But I think the underlying approach works. Money is fungible, and all that).
posted by moosetracks at 10:17 AM on December 20 [2 favorites]
I really don’t see why you’d need to minutely track gains/losses to know whether your investments are on track. You need to know what current total dollar amount will get you to your desired future dollar amounts and whether you have or don’t have that dollar amount in your investments today, and that’s doable without granular tracking.
For example, if I know I want to have $100,000 saved by March 2035 for goal 1, $50,000 saved by March 2030 for goal 2, and $50,000 saved by March 2028 for goal 3, I could use a net present value formula that shows what $$ value I should be at currently with regard to each of those goals if I want to hit it (taking into account the different timelines and potentially different expected interest rates). If the sum of the three outputs is less than or equal to your total current savings, you’re on track (because you have more in savings than the math says you need). If it is greater than, then you would be able to determine what % short you are across the entire investment scheme. If one investment set is more of a priority than another, you could choose to view that as “fully funded,” and then determine by what $$ amount or % your other investments are lagging behind.
(I do have a fever currently and it’s been a few years since I updated our retirement spreadsheet’s formulas, so it’s possible that, like, another formula would be better. But I think the underlying approach works. Money is fungible, and all that).
posted by moosetracks at 10:17 AM on December 20 [2 favorites]
I immediately thought that I’d personally do this in YNAB using the exact setup that caek suggests. So, I’ll second that!
posted by samthemander at 12:35 PM on December 20 [1 favorite]
posted by samthemander at 12:35 PM on December 20 [1 favorite]
We're not tracking these things on a day-to-day basis, but still, these seem to be pretty tedious and error-prone manual steps that we'd rather avoid.
posted by number9dream at 9:37 AM on December 20
How often do you want to update the brokerage account in YNAB and how detailed do the entries need to be?
A simple way to go would be to not link the brokerage account to auto-update. Then just manually update the total value of the account with a single transaction every quarter.
If you set up dollar-figure goals for your buckets and an unallocated bucket as caek suggests, the over/under would probably only affect one bucket.
That'd be just one transaction and one bucket per quarter (or however often you'd like).
posted by Boxenmacher at 2:23 PM on December 20 [1 favorite]
posted by number9dream at 9:37 AM on December 20
How often do you want to update the brokerage account in YNAB and how detailed do the entries need to be?
A simple way to go would be to not link the brokerage account to auto-update. Then just manually update the total value of the account with a single transaction every quarter.
If you set up dollar-figure goals for your buckets and an unallocated bucket as caek suggests, the over/under would probably only affect one bucket.
That'd be just one transaction and one bucket per quarter (or however often you'd like).
posted by Boxenmacher at 2:23 PM on December 20 [1 favorite]
I agree with putting them on budget in YNAB of you want to subdivide them. Just log into your investment accounts every 3 months or so and use a calculator to get the net change , then enter any positive change as income: ready to assign . FWIW I don’t do this … I keep enough in regular savings to handle and build categories like vacation, furniture, home repairs, etc. stuff that makes it to my retirement or brokerage is mentally off limits unless I need some to pay for a kid’s tuition - in that case I ask my finance guy to move X into my on budget savings and mark as income.
posted by caviar2d2 at 8:34 PM on December 20
posted by caviar2d2 at 8:34 PM on December 20
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posted by number9dream at 7:48 AM on December 20