Hi everyone, I never really used the full power of Tiller until recently but I am having issues trying to figure out how to categorize investment account transactions. I have a few different investment accounts, 401ks, general investing, a 529, etc. With the exception of the 401ks of course, all the money comes from my debit account.
So Ill see the negative amount out of the debit account, then the positive in the investments then the purchase of the investments. I will also see the dividends getting paid out, then another transaction from the reinvestment of those dividends.
So I am curious, what type of category those types of transactions can be considered and what group to put them under?
Currently I thought it was a great idea to put them under a category that has a group of Bills which obviously is wrong. So I am trying to resolve that so I can get a better picture of my finances.
Hope someone can help me out! Thanks!
Hi @ccigas1,
I categorize the transactions from my bank account to investments as expense categories (“Roth IRA Contributions”, etc). The incoming transactions to my investments and any buy or sell transactions are categorized as a transfer category “Investment Activity” which is hidden from my budget. I categorize dividends and reinvestments as income and expenses since those can be taxable and I don’t want those numbers to get lost. I group the income categories under “OTHER INCOME” and the expense categories under “SAVINGS GOALS”.
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Thanks! Curious as to why you categorize the transaction from bank to investment as an expense? I was thinking it would have been more of a transfer than anything but its interesting to see that. Would it be just because of assigning a budget to it?
I am just getting started with Tiller so all of this would be really new to me. Always used other apps but this is way more involved and is very intimidating at times so thanks for the reply!
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That’s exactly why, yes. I want to keep my contributions as part of my budgeted expenses, but beyond that, I don’t need to include what happens inside the investment accounts in my budgets. Any other instance of moving money between my accounts I 100% agree that would be categorized as a transfer.
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A point to clarify, as we are new to Tiller and now trying to navigate this same question. @cculber2 answer states: “…buy or sell transactions are categorized as a transfer category “Investment Activity” which is hidden from my budget. I categorize dividends and reinvestments as income and expenses…”
But isn’t a dividend reinvestment a buy transaction? So why would this be categorized as an expense?
I guess we are thinking that Contributions is the expense (from a monthly budget standpoint), dividend income is Income.
For Investment activity I like the idea of calling these transfers, but I suppose the sale has tax implications, so still unsure. Again, just hoping to understand the logic of the reinvestment piece as this would potentially inform.
Finally, I guess one idea is maybe that retirement accounts that you can’t touch maybe it makes sense that all activity in those (ROTH, 401K, etc) just be Investment Activity/Transfer and the Contribution is an expense, while and Indvidual account contribution could be a transfer, and then only when there is a purchase or sale do you have an expense/income.