Do I Even Need a Savings Account?

[@hlindenberger1540]

The only reason to have a Savings Account is to keep your savings a tad bit safer. Having an account that is not attached to any debit card helps keep your funds a little less accessible to fraud.

[@conureron3792]

Exactly why I have a savings account

[@weyniwilliams5083]

It also makes them less accessible to me. It takes three days for my online bank account to transfer my funds back and forth between my checking account. It’s not worth the hassle to try to use that money. So, it just sits and grows.

[@samueltremblay275]

It's funny you say that because tomorrow I have an appointment with my bank because of a fraudulous transaction has been made in my debit account. My first reaction was to transfer about near the total amount to another account but as my bank security noted me, there is a line credit protection of 5k$ on this account if it goes below zero. In other words, if I just leave 5$ and a fraud of 500$ is done, my account will fall at -495$. In my case, it's not worth moving my money to another account thanks to bank insurance protection. PayPal looks like the source of all evils but this is another story 😆

[@nosirrahm]

Unless there is overdraft from savings.

[@chrisclinard1907]

I was just thinking the same thing. Glad I'm not the only one.

[@donaldzieglerii270]

My wife and I are 71 & 72 and live on Social Security. Living on SS is hard but when I signed up for YNAB, I now have money left over each month. We just set our goals and stay on them. It's amazing when it's all laid out in front of you, you can see the road map and not get off the main road. If that make sense.

[@YNABofficial]

Donald!! This is an AMAZING comment! I love it!! Would you mind if I shared it as a future YNAB Win?! That's so rad and inspiring. 🌻 Hannah

[@donaldzieglerii270]

Go ahead!

[@YNABofficial]

YEAHHHHH!! Best news of my morning!! Thanks Donald!! 🌻Hannah

[@sherrylynnbishop8007]

My husband retired at the end of last October. We also sold our home and relocated to another state. Social Security started in December. On Jan 1st I did a fresh start and I have a brand new budget with our retirement income and updated expenses. We, too, are spending less than our income each month. Savings and investments are just sitting around waiting until their "job" comes up. With the downturn in the markets, this gives me a lot of peace of mind. Our budget is like a road map and it does make it easier not to get off of the main road and get lost (as in overspend or create debt or even have to dig into savings categories!) Thanks YNAB!

[@YNABofficial]

Ahhh, I'm LOVING all these stories! So so good, Sherry-thanks for sharing!! 🌻 Hannah

[@01fxstsi]

Now that savings accounts are back to good rates there’s good reason to keep your’re savings in savings accounts again.

[@jpstoehner]

Great video and hilarious ending. While interest on dollars that many people keep in savings may not amount to much (ie. 28 cents in your example), probably a slight disservice to suggest savings are mere clutter. High yield savings are a thing and even though rates on those are currently very low, if someone is carrying a decent amount in traditional savings or checking, they should look at HYSA options like Ally, Marcus, Discover, etc. Might as well earn something on your cash…even if it’s not significant.

[@VioletEmerald]

Yes!

[@mdel310]

Getting 1% right now with sofi, online banks are the way to go.

[@mellowyello1478]

Ally used to be good about their savings, unfortunately its not as high yield as they used to be. If i ever reach my benchmark (10k in bank, no debts.) I'd love to put 10k into an actual high yield account and just let it sit while i rebuild towards another 10k.

[@jpstoehner]

@@mellowyello1478 It’s not just Ally. Pretty much all of the best HYSA rates are at .50% but maybe will start ticking up soon with Fed raising rates.

[@jpstoehner]

@@mdel310 Glad you mentioned that. Gonna take advantage. Looks like it’s capped on balance that earns 1% but pretty good.

[@erikahagan8767]

It was a HUGE lightbulb moment for me when I realized dollars were dollars, wherever I parked them. YNAB don't care - just give 'em jobs. I do have a savings account (tiny interest is still interest) but the savings "categories" in YNAB don't match up to the savings account dollar amount - dollars are dollars, they all have jobs.

[@YNABofficial]

Mine is the same way! The amount of dollars in my checking vs savings account is completely non-sensical-I look to the budget to know what I'm saving for and where I'm at with those goals. -Hannah 🌻

[@kme06d]

Put it in a high yield savings account like Ally! It's not earning much now (half a percent), but it's better than a regular bank savings and the interest rate will change as fed rates rise back up. I only keep enough money for bills and a small cushion in my checking account, everything else goes to Ally.

[@WorkshopGreg]

We keep funds separated between savings and checking as a stop gap in the event our checking account becomes the target of fraud (which I'm hearing from banking buddies is on the rise). It can take weeks to get your funds back depending on how elaborate the attack is. We have our savings account 'Locked' with our bank so no funds can be withdrawn without the bank first verifying with us that the transfer was authorized. We've been lucky that it hasn't happened to us yet, but I figure it's only a matter of time.

[@lizp.9513]

Exactly!

[@Tracy_F]

I have separate checking and savings accounts. I actually have a good amount of money in my Ally account and get pretty good interest. So I also keep 2 different budgets in YNAB. Each account gets its own budget. I also actually like that it’s a hassle to move the money to my checking account to spend it.

[@mdel310]

That friction is why you should always have separate accounts. Once the money goes to savings, you are less likely to want to spend it.

[@sakeena9364]

I was just about to comment what was said above using experience but the comment load in

[@sakeena9364]

I don’t budget mine so it’s like how she displayed it in the beginning, if I did combine them and used the money in budget for things I want, I would also be able to buy them and my net worth wouldn’t move. I actually have my two savings accounts on my budget and every month I place money on them like it’s a sinking fun when they aren’t they are just there to build my net worth. Which has been going up x7 every month.

[@Tracy_F]

@@mdel310 yes!

[@amytaylor9268]

Hmmmmmm I may try this! I’d love to know how it’s organized?

[@jaredwilliams8621]

Last time we had a "savings account" was when we were saving our down payment for our home. We had a pretty good amount of money, so the extra interest of moving it to a money market account made it worth the hassle of managing a separate account.

[@joanhall3718]

Dollars are dollars, but fraud can hit anyone. I have savings accounts at two different banks so if one is compromised I have access to the other while dealing with the fallout. I’ve also stopped using my debit card since my credit card has much better protection. Pay the credit card bill every month so no interest.

[@debbiew263]

Same here.

[@beachhoppr]

also there is the idea that one does not want all their liquid cash in 1 single account at 1 single bank.

[@sillyellie296]

A new Hannah video? Definitely need that for hilarity and information!

[@nancyrowe5307]

I'm binging the Hannah videos this weekend! I just discovered them although I've been a daily YNAB-er for 7 years! 😱Anyway, I keep ALL my money ALL the time in Sofi savings bc it's high yield (5% right now), and they have free/immediate/unlimited "overdraft" to checking. It took awhile to get used to seeing "$0" and "overdraft" but man oh man, that "free" money (interest) each month - makes it sooo worth it. Been doing it this way without a hitch for 4+ years. Now, what I DID learn from this and am about to change...I had a lot of "vaults" (Sofi's version of digital envelopes under Savings) AND had the exact same list in my YNAB budget. I spent years always making sure they always matched. This video made me realize that is ridiculous - double info/waste of space! I just delated my vaults and now all my money is just sitting in "Savings" and only broken up/assigned in YNAB. THANK YOU and please keep making videos (and show more Julep!!) :)

[@rsd22123]

One of the best things I did last year was merge my savings with my checking. One less account to deal with at the end of every month, not to mention the peace of mind it has given me. Seriously. Just do it and try not to yawn when you do.

[@anniemilakovic7683]

I think it depends how much money is in those buckets....i'm not keeping a 20k emergency fund in my main checking account, or even at the same bank. I will keep a $500 sinking fund in there.

[@sakeena9364]

Yea, you would want to keep a large amount of money on a card you do use.

[@PamJernigan]

Savings accounts can be good, for the various reasons people are mentioning. (Some day, perhaps, interest will get above 1%!) When I opened multiple savings accounts, though, it was solely so that the money would be protected from me (and my husband) spending it accidentally. Because that used to happen a lot. But I've closed most of them now because it's not a problem with YNAB. So for *that* reason, you don't need a savings account if you have a budget. And y'all should check out your local credit unions, if you're in the States. My checking account gets a higher interest rate than my savings accounts, and no fees. Regular banks will bleed you dry with fees.

[@TheGoodMidlifeCrisis]

Totally in for Tuesday night bowling or budgeting!

[@YNABofficial]

Alright, that makes two of us!! All good things start small. -Hannah 🌻

[@alexhaney100]

I absolutely love keeping some of my savings in my checking account! I used to keep them separate but it got really annoying and felt like a waste of time to keep transferring money back and forth. I also keep some of my emergency savings in checking, which has really come in handy when I needed it suddenly. As a general rule of thumb, if I will be using the money within a year or so I keep it in my checking account. Longer term savings goals such as saving for my daughter's education, a down payment on a house, etc go into specialized savings and investment accounts. For my emergency fund I keep one month's worth of money in my checking, plus I'm one month ahead on my expenses already too so I have a two month buffer there before I need to pull from a savings account should something major happen.

[@iyeshaluker23]

I was distracted trying to figure out what was in her mug.

[@YNABofficial]

Hot chocolate 🥰 -Hannah 🌻

[@hooksbookspodcast]

This concept was game changing for me!!!!!!!

[@YNABofficial]

YEAHHHHH!! So glad something clicked! It blew my mind too when I realized it! -Hannah 🌻

[@halfmoonyogi4997]

Yeah, as others are saying my first thought 5 seconds into the video is this: My savings account isn't connected to anyone or anything but me. I don't have overdraft protection, I don't have any auto payments out of savings, no company or person has the account number except me and the bank, and there is no card number to steal to access it. It keeps my savings a bit more secure than a checking account, which I monitor constantly and have connected to lots of current and past bills, use debit online etc. Despite monitoring it constantly, I still manage to make math mistakes sometimes and end up needing to move money around but at least I am doing it intentionally rather than accidentally spending savings. That being said, I have gotten into cash budgeting and love hiding my money from myself as well, so I don't have immediate access while I am out and about 😅

[@deniselittle5558]

Haha, that was hilarious to see my words - well my reworded words, suddenly appear in this video.

[@YNABofficial]

Ha! We LOVED your comment! Here's your full quote below for anyone else curious to read the original comment! "I always avoided budgeting because I thought it would been extremely restrictive and I already believed I had little to spend as it was, but now that I understand what budgeting really is I have found out why I used to struggle to pay my bills and why I didn't have money for anything I wanted. I know have credit cards paid off, savings are piling up and I have the freedom to spend on many of things I want. Now to somehow get this across to my adult children." We loved it so much 😂🥰 -Hannah 🌻

[@mavrosyvannah]

I look at my savings account and add a zero to the right. Since I automatically save 10% the answer I get instantly tells me my annual income before the reset.

[@rebeccamarkley5231]

So I spit coffee all over my phone and my clean dishes watching the outtakes. Luckily I don't need a checking or savings account to deal with that! ☺️

[@YNABofficial]

😂😂 You'd think I was napping between each take! -Hannah 🌻

[@donaldzieglerii270]

Outtakes! Where did you find those?

[@YNABofficial]

@@donaldzieglerii270 Skip on over to 9:01!

[@markhines192]

Yes, amen Hannah

[@DrJam0073]

You crack me up Hannah!

[@josephbaumann292]

Thank you so much, this is great!! You just solved an issue for me. This is perfect!

[@YNABofficial]

Woo hoo!! That's so great to hear! -Hannah 🌻

[@danesparza77]

Ok - I get it. A dollar is a dollar. But when I need to go spend money for a category, how do I know where to safely spend it from in YNAB?

[@AntWrig]

Can you list these categories?

[@YNABofficial]

Hey Antonio! Which categories are you wanting a list of? I can do that for you! -Hannah 🌻

[@davidsonmg]

Just remember when you transfer money into savings from checking it's not just a transfer. Those dollars are still free to be spent so be sure to move them into a savings category ASAP or you'll be allocating dollars later on that will be spent elsewhere.

[@edwardhanson1572]

Thanks for reminding me, Hannah. I really need to start saving for the apocalypse.

[@YNABofficial]

👌🏻👌🏻👌🏻 -Hannah 🌻

[@wannabedal-adx458]

My savings account/fund is at or above 1 month's of expenses. The rest of my 'savings' is store elsewhere. So in that case, I will create a Emergency Savings Category group and put in there all the spending for each emergency category that I need to spend on in case I lose my primary source of income. That way I know I am technically a month ahead and can budget the rest of the month soundly as money comes in. But also like some of the discussion so far about still keeping a savings account not tied to checking account with a debit card for fraud prevention!!

[@YNABofficial]

Oh wow! Very smart, and sounds like you are VERY well financially prepared for when life gets a little wonky. Way to go! That's not easy work!! -Hannah 🌻

[@sharaf.6333]

Since SoFi Money is giving me 1% on my checking account and the same rate on a savings account, I just keep all my money in my checking account and my Categories in YNAB are my Savings buckets for Goals & Bills.

[@sakeena9364]

It’s the same percent. If it was different you would place it where it is higher.

[@mrachel3]

This actually made me feel bad about myself for liking a savings account.

[@YNABofficial]

Oh no!! I am so sorry, that was certainly not my intention!! Like I said in the video, I'm not saying it's better to only have one account or even that it's the right thing to do-I was moreso pointing out that a solid budget (especially with YNAB) makes the need for multiple savings accounts obsolete. I still have a savings account (not really for great reason, more just due to the fact that it's not hurting anyone to have one 😂). But I used to have FOUR and now I realize my budget tells me everything those four savings accounts used to tell me, so I closed them and now I let my budget tell me what dollars are safe to spend and where I am with my savings goals. Please don't feel bad, and I'll make sure to watch my tone in future videos! I hate to think of being discouraging to any viewers. You're doing great, my friend!! Thanks for watching, despite the topic being the flip side of what you practice! -Hannah 🌻

[@hoofhearted4]

my Savings is for my Emergency Fund. they are one in the same. i DONT plan on spending that money. If it never gets spent, thats a good thing. i probably shouldnt link it to YNAB.

[@fyrchiky]

LOVE the video!! Hannah, you're awesome.....as is everyone else at YNAB. I will keep my actual, bank, Saving's account as I get Bonus Interest when I deposit minimum $200/month, so over the years that interest will add up, and to the point where I now have to claim interest as income! Thank-you Canadian Government! I've been a YNABber for about 12 years, and I learned something new with this video today! Hey, can I get one of those pigs?????? Love the coffee mug, but I REALLY love the pig!

[@sherrylynnbishop8007]

My son made me one for Christmas! He reached out to Hannah and she told him she bought Banksy at Michaels (a crafting store) and painted his cute face herself. So he bought one and made it for me for Christmas. He sits beside my monitor on my computer desk so I can see his cute face every time I reconcile on YNAB.

[@YNABofficial]

Terri-DANG. That's so Canada. I love that for you 😂😂 Congrats on TWELVE YEARS, HOLY YIKES!! That's what we call a lifer :) 🌻 Hannah

[@YNABofficial]

HA! SHERRY! THAT'S AMAZING!! 😂😂😂 That's a very fun and thoughtful Christmas gift, but of course I'm biased 😉 He was so thoughtful to reach out! A dream of a world with more Banksy's in it! 🌻 Hannah

[@bewilde2]

OMG why can't any of your videos, blogs, etc. make it 100% obvious what is happening - visually! I'm just beginning so nervous. Because I am just starting the money in "ready to assign" is the same as what is in my account. I ASSUME that the money that comes into "ready to assign" will be the money that is new into my account going forward, yes? So, my account balance and "ready to assign" will never match again -- assuming I am actually managing to save money -- correct? That existing money is "doing something"? Thanks

[@angelaparks2869]

I guess an additional reason to have a savings account is because you use a credit union instead of a bank.

[@YNABofficial]

Oh! Tell me more, Angela! What difference does the credit union vs bank have? -Hannah 🌻

[@angelaparks2869]

@@YNABofficial Hello Hannah! Thanks for these vids. I'm trying to leave Banktivity and switch over to YNAB, but want to learn as much as I can before leaping. Credit unions require a membership account. All the ones I've been with have called it a "share draft" account, which is basically a savings account. It has a permanent and inaccessible balance of $5 to keep the membership in place. The interest is still abysmal, but not as abysmal as it was at my last regular bank, which was Bank of America. My real, real savings is at Fidelity in a cash management account.

[@YNABofficial]

Ahhhh! I never knew that! We opened my checking and savings accounts with our local credit union when I was in 3rd or 4th grade so I could deposit my earnings from a newspaper route my brother and I both worked with my mom! I obviously wasn't paying much attention 😂 That's fascinating! I guess I never realized my savings account was part of my membership! I believe mine actually has a $25 inaccessible balance-I always wondered what that was all about. Now I know! Thanks Angela! 🌻 Hannah

[@biblioholic7139]

Just because you can doesn't mean you should 😉