Decoding YNAB’s Account Type options

How about a little decoding fun?

One of the first tasks you’ll tackle when setting up your YNAB4 budget is setting up your Accounts. The first couple of Accounts everyone enters are usually very basic and relatively self-explanatory: checking, savings, credit cards, cash. We’re all familiar with these types of accounts and matching our physical accounts with YNAB’s account types is fairly straightforward.

But what happens when we have an account that isn’t so straightforward? What if we want to think outside the box a little or bend best practices to better fit our own personal circumstances?

For those of you who, like me, are unapologetic boundary-pushers, I’m here to help you decode the logic/programming behind YNAB4’s named account types.

First Step

Let’s deconstruct exactly what is happening in the last three (3) fields in the New Account wizard.

Account Type is a dropdown list of 11 account type options. [Shhh, don’t tell YNAB that I told you but these account names are really just placeholders.] They are a beautiful example of putting if-then computer logic into plain language for an enhanced User Experience.

In the end, there are only 4 options for all accounts:

1. On-budget with a positive starting balance
2. On-budget with a negative starting balance
3. Off-budget with a positive starting balance
4. Off-budget with a negative starting balance

Assumed Starting Balance	On-Budget	Off-Budget
positive	1	3
negative	2	4

So, that’s all nice and geek-y but, I get it, you want practical. You want to know, “what type of account is this?!” (this being whatever funky account it is you’re trying to create in YNAB4).  Patience, patience.

Second Step

Recalling the screenshot above, YNAB gives us 11 different named account types to choose from. Since there are really only 4 possibilities some of YNAB’s example accounts are duplicates — different names for exactly the same results.

Using the table above, we can look at YNAB’s eleven account types and define whether they are a type 1, 2, 3, or 4.

Account Name	Account Type	Assumed Starting Balance	On- / Off-Budget
Checking	1	positive	on
Savings	1	positive	on
Credit Card	2	negative	on
Cash	1	positive	on
Line of Credit or Other Credit	2	negative	on
Paypal	1	positive	on
Merchant Account	1	positive	on
Investment Account	3	positive	off
Mortgage	4	negative	off
Other Asset (house, car, etc)	3	positive	off
Other Loan or Liability	4	negative	off

Or, to look at the puzzle from a different angle, let’s divide the eleven named Account Types into their property groupings (see Table 1):

Assumed Starting Balance	On-Budget	Off-Budget
positive	Checking Savings Cash Paypal Merchant Account	Investment Account Other Asset (house, car, etc)
negative	Credit Card Life of Credit or Other Credit	Mortgage Other Loan or Liability

So what’s all this mean and how are you supposed to use this information?

If you have an account that does not fit neatly or easily into YNAB’s list of example accounts — let’s say for instance you borrowed money from your parents, or you have a safe in the floor under your bed or whatever crazy example we out-of-the-box types like to come up with — the easiest way to choose an Account Type is to answer these two simple questions:

First: Is it an account that you will be spending or creating budgetable money from? If Yes = it’s On-Budget. If No = it’s Off-Budget

Second: Does it have a positive or a negative starting balance?

Once you know On or Off, positive or negative, you can choose any account type in the corresponding box. Yes, that’s right, I said any. If you’re really a rebel, you could choose “cash” and go on to create a checking account. Or you could choose “Investment Account” and go on to add your fully restored 1965 Ford Mustang because you want it to be counted toward your total net worth.

In the end, the name you choose from the dropdown box does nothing more than tell the program, “get ready, boys, here comes a positive balance” and then selects the on- or off-budget radio button for you.

If you really want to nitpick and boil it down, all you really have to do is pick any account with the right type of account balance — negative or positive. YNAB will suggest that the account be on- or off-budget but you have the option to override the program’s suggestion and click on the other radio button. So you could choose Checking, enter your starting balance, and override the on-budget suggestion by clicking on off-budget instead and you’d end up with an Investment or Other Asset account.

On the left is one final screenshot demonstrating the decoded logic of YNAB’s account types. I’ve created 11 different accounts. Each account name corresponds to the type of account I chose from the dropdown box. I gave each account a $100 starting balance and let YNAB decide whether that balance should be positive or negative. I also let YNAB choose whether the account would be on- or off-budget.