Emergency Fund vs Building True Expenses

We all know we need to save, but it can be hard to know HOW to save. Discover the necessities and differences between having an emergency fund and building your true expenses (or, as they're more commonly known, sinking funds).
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[@maggiebookworm]

Anyone else think the YNAB subscription should be a built-in category on YNAB? haha. It took me 3 years of using YNAB to finally budget for that yearly subscription, oops!

[@tektauron]

I actually started using YNAB a few days ago, and yes. It's one of my true expenses!

[@devlinfae]

It’s in my True Expenses category:)

[@mamascrafts13]

I actually set a category just for that!

[@amirgamil]

Meta-irony! Never used that expression before. And there's a good chance I never will again. So I thank you for this opportunity 😄

[@jordanhoman0212]

It's not built in, but it is part of the tutorial!

[@JaesWOverley]

Hannah, have you been reading my comments on Ashley's videos? Building sinking fund amounts for True Expense categories truly make the benefits of YNAB shine. Whenever I discover another annual bill I immediately add it to our Annual Expense Category Group and set up a goal for it. We also have an Emergency Fund category that helps alleviate any anxiety about the unknown. The crazy thing is that it appears Murphy and his Law seem to know this and generally stay away. Lastly, thank you for making me laugh out loud at another of your wonderful videos! I look forward to next week!

[@kkmrad93]

I love the bloopers / extra bits at the end! I think I could listen to you talk about anything even if it isn't budget related. Thanks for the video, I'm off to make more categories!! (:

[@AurelioPita]

Finally someone talks about true expenses. I was having a bad time trying to figure out how to deal with it. Using emergency fund didn't seem right.

[@ksio5853]

Feel like you’re reading my mind this week. I was just searching for more info on sinking funds vs emergency funds. Wonderful timing! You’re a crackup and my kids enjoy watching with me. Great job!

[@YNABofficial]

Ha!! I love that your kids join you!! Well, hopefully some of these financial mindsets will seep into their young minds and your kids will have saved up enough money for college before they even get there ;) Thanks for watching!! -Hannah :)

[@1esk192]

This was such a game changer for me. Before I heavily relied on the category "stuff i forgot to budget for" and now I don't even have it anymore. True expenses get treated like monthly bills now and i love how my targets give me peace of mind.

[@TornadoBarrage]

0:01 relatable

[@YNABofficial]

😂😂😂 -Hannah :)

[@wannabedal-adx458]

One aspect of this goal setting (not specifically a YNAB type goal), is to save up enough to cover auto, home owner (or renter's), and other insurance deductibles. That could cover some of your true expenses especially if you have a loss or claim in that area.

[@MrKitagurl]

Saving up for the insurance excess is a great idea. That way if you need to claim you can. mind blown

[@siwenstokes5930]

Hannah, I really like your teaching style! Keep up the good work!

[@w00t55]

Looking forward to the next video, because that’s something I’ve been wondering about!

[@fallondavis747]

Love these videos. Can’t get enough!!!

[@colin1818]

I've had a variety of sinking funds in my budget for a number of years (I've gotten to calling them Rollover Funds). Car Maintenance, Annual Renewals, Christmas 20XX and Family Travel (weddings, funerals, et al).

[@BlackPrl72]

Brand new to YNAB. I love the videos and presentation! Thank you to the team that makes it possible!

[@YNABofficial]

Grant, we're so glad you're here!! We'll make sure to keep the content comin' for ya :) -Hannah

[@devlinfae]

Finally creating a True Expenses category! :)

[@tusharbhuiya5397]

Lady's a great presenter - love the humour!

[@ceciliaruns72]

I wish you would make more videos! 😁 I've watched all of them now!

[@wiseman4160]

Great video! Every few months vet check up during the year sinking funds. Taking pet to the vet because he or she looks very sick emergency fund.

[@TheNicoliyah]

Sinking funds have been a revelation to me, especially now with the new online banks that allow you to have separate savings pots in one account.

[@YNABofficial]

Right?! Same. This week alone my car's AC went out, started leaking brake fluid, AND I was told I had a tail light out yesterday. Luckily, I've been dropping money in an Auto Repair category every month for a while now, so I'm hoping to have some, if not all, of the bill covered! Sinking funds for the win! -Hannah :)

[@shantellerobb5896]

Do you stop putting money in a sinking fund after a certain amount? Like holidays, do you have a number in mind then when you hit it, you stop and start another sinking fund? I have written out a budget but I can’t save for everything right now, I don’t make enough money for that.

[@TheNicoliyah]

@@shantellerobb5896 It depends, I have a non emergency emergency fund (or curveball) fund which has a set amount & the others, I just put the same amount each month & then if I have upcoming expenses for say my car or a holiday, then I will use the money in the pot to cover it. But do what ever works for you

[@keithmallett7987]

Truly... Wow, Hannah you've come so far - you started your videos with needing to budget for a dating service and now you're budgeting for kid's summer camp???? One of those four walls you talk too got the better of you :) I guess that was predActable :) Another great job! Keep it up!

[@YNABofficial]

Ha! Well, it's all for the example :P Now if there were a DOGS summer camp, you can bet your bottom dollar I'd be saving up for that. ;) -Hannah :)

[@gpslentz]

Thank you! I've been waiting to see your dog!

[@ThuyNguyen-bu9ge]

Caring for future you - that is beautiful. I care for so many people. I should care for future me as the center focus that will radiate love and care for others.

[@Bwcap]

Very good video!! Really the Software is crush!!!!😄😄😃

[@MichaelHorst]

When will we have that amazing new color scheme in the app!?

[@YNABofficial]

All in due time, young Michael. All in due time. -Hannah :)

[@Sclark2006]

@@YNABofficial speaking about Color Schemes.... When we'll have Dark theme in the mobile app? It's uncomfortable to have the white background when one's in the dark of the night...

[@natew]

@@Sclark2006 I've had dark side on Android for months. Maybe check your settings?

[@natew]

I would like it on the web app though 🙂

[@ErinRose94]

Yay Julep is so cute!!! Great video otherwise, too, ya know, budget, sure..JULEP

[@YNABofficial]

Okay, this is my favorite comment of YNAB KZbin history. Erin wins all!! You get me :) -Hannah :)

[@ransom0]

IMO anything that has a good statistically significant chance of happening, i try to budget for that.

[@amandanance9136]

Where do you put the money for individual categories? Maybe an envelope. Or money market account.

[@sadboiiz]

Well i like watching your vids

[@ReeceCaruso]

Such an important topic to talk about! Great job breaking it down

[@carrjar]

Good one! How could I forget vet bills?! (Opens another Capital One 360 Savings account)

[@Kamishax]

How are you liking that HYSA? I was considering capital or Ally.

[@scruffthemagicdragon]

Mind=blown.

[@thealphareich]

The neighbor would be taking care of that expense.

[@wildwheelsdarin]

okay... pretend it was your kid that hit the baseball ;)

[@fxnicaragua9349]

you would have to fix it first, because it's your house, then send the bill to your neighbor... emergency fund refunded!

[@luckyhappyrebecca6347]

Enjoy from🇺🇬🇺🇬🇺🇬🇺🇬🇺🇬🇺🇬🇺🇬🇺🇬🇺🇬

[@GroovyMisfit]

How would one classify items like a Computer and Cell Phone. These items have become necessities like car maintenance, home maintenance. Would I set a True Expense for this? But I don't routinely replace my phone. I usually make it last as long as I can. Is there a YNAB forum somewhere?

[@YNABofficial]

Absolutely! Our original default template that we used to set new YNABers up with actually had a "New Computer" savings category built right into it! Our new template let's YNABers select and decide their own categories. I would do your research, decide how much you want to build up for a new computer and a new phone, and start a category for each. If you want to make sure to have that money all saved up by a certain date, feel free to add a date to the target-this'll make sure you're dropping in the exact right amount each month to hit that goal by the time you want! If you don't have any particular date in mind for when you want to fund these categories by, I'd recommend setting up a "Monthly Builder Savings" target for it for an amount that feels good to you, whether that's $20 a month or $200 a month-this will prompt you to drop that same amount into that category every single month until you eventually decide to disable the goal (which is great considering that the moment you buy a new phone, it's basically time to start saving up for the next one 🙃). And our old YNAB forum is retired, but feel free to check out the YNAB reddit community or join the YNAB Fans facebook group! There's LOTS of helpful activity and discussion in these groups to help spark ideas or get your questions answered! Hope this is helpful! 🌻 Hannah

[@_sunvsmoon]

"...even building up a clothing category if you're not someone who thinks to buy new clothes. I do not personally know what that is like." RIGHT. My clothing category is my demise

[@jenlovesjesus]

I couldn't use the desktop version so I deleted my account. If there had been help.....is the app better? I would be willing to try that, but I won't pay for something that doesn't work. I have a budget planner that syncs with fountain pens, ballpoint and gel pens, as well as colored marker. It didn't cost me $85 a year, either. Just saying....

[@YNABofficial]

Hey Jennifer! Saw your comment on the Running Multiple Budgets video too, but wanted to also share a hopefully helpful word here as well in case you only caught one of these comments! Because KZbin is #confusing. ;) If you haven't given customer service a ding yet, definitely give that a shot!! If your trouble is that transactions won't import from your bank, our support team can do a deep dive and figure out what's going on with your particular situation! Otherwise, they're pretty darn sleuthy and may be able to give you some insight into the troubles you're having. I am so sorry to hear your frustrations! We want your budget to work for you too. This page contains all of our help resources, and if you scroll near the bottom you can find the button to get connected with customer support! Wishing you the very best of vibes right now as you try to nail down what the trouble is. 🥰 -Hannah :)

[@JG-no4qr]

Where do Sinking Funds fall into all this?

[@YNABofficial]

Hey JG! I saw your same question on another video, but I'll go ahead and repost my response to that one here as well in case you miss one or the other: True expenses and sinking funds are essentially one in the same-sinking funds is the universally recognized term, whereas YNAB invented the synonym "true expenses" to remind us that what we often think of as our expenses typically leaves a ton of gaps in our financial plan, and this term spurs us on to question what we might be missing. Of course we know rent and groceries and gas are our expenses-duh-but what about all those expenses we know are coming in the back of our minds (car repairs, home repairs, vet visits, even Christmas or vacations) but never recognize as our routine expenses? These are often the expenses that trip us up and throw us off in our financial flow, so we like to refer to them as TRUE expenses (because, truly, they are our expenses-we know they'll come eventually!) and we encourage you to build *sinking funds* for them, so when they DO come around you can give 'em the old 1-2 RIGHT quick. So, all that said, you build sinking funds for your true expenses. An emergency fund, on the other hand, is a more specific sinking fund-it's another true expense all on it's own! The car breaking down isn't really an emergency-we know the car's gonna need new tires or a tune-up one day, so we should build a specific sinking fund for that true expense so we're prepared when it happens. Same with vacations: sinking fund. Holiday gifts: sinking fund. The vet: sinking fund. But emergencies deserve their own sinking fund because they are expenses we truly did not see coming. It's the back-up for when our plan wasn't sufficient, when we are totally caught off guard. Ideally, if we recognize all of our true expenses and build up sinking funds for them, the emergency fund is lightly (if ever) touched! BUT, nonetheless, we are at least a little bit prepared when they hit. I hope this helps! Great question!! -Hannah 🌻

[@aspendrakeelkins443]

I love you guys and I will use ynab forever, but omigosh the editing on this is giving me a headache! Less cuts, *please.*

[@okgreat252]

Lisa E I know - I’m getting whiplash just watching this

[@walterwillis603]

Would be watchable if the camera didn't keep moving. I just listened. The canera shifting is annoying.