Hello, fellow Goodbudgeters!
I’m trying to figure out a way to work with my mortgage and taxes payments.
My current situation:
- My wife and I both have separate (real-life) bank accounts for day-to-day expenses.
- We have a joint (real-life) bank account for our mortgage
- Every month we both transfer half of the mortgage payment from our personal (real-life) bank accounts to the (real-life) bank mortgage account.
- Every month we transfer 1/12 of the taxes to this same (real-life) bank mortgage account, so when taxes come due in January we have the full amount available there.
So, let’s assume our mortgage is $1000/month and our taxes are $2400/year. Every month the both of us transfer $700 (half the mortgage + $200 for taxes) from our personal accounts to the mortgage account. We do it in one transaction ($700), without separating mortgage from taxes.
How can I keep track of what’s going toward the mortgage repayment and what’s going to be saved for the taxes? How do I know when January comes, if I have the right amount saved for taxes?
Thank you very much!
Welcome to Goodbudget!
You’ll want to track these amounts with Envelopes so you can easily see how you’re progressing toward your goals. Which account “holds” the money isn’t relevant, because Accounts and Envelopes just show you the same money from two different perspectives. Accounts show you where the money “lives”, and Envelopes show you how the money, in aggregate, is allocated to be used. Assuming you track the mortgage account in Goodbudget, that tax and mortgage money will appear as Unallocated until you create envelopes for it.
In this case, you’ll want a monthly envelope for the mortgage and an annual envelope for the taxes. When you make the transfers, you’ll create Fill from Unallocated instructions for those envelopes: $1000 to fill the monthly Mortgage envelope and $400 to the annual Taxes envelope. It doesn’t matter than you each transferred $700 because that’s happening in Accounts and this is happening in Envelopes. If they don’t happen the same day you could certainly do four different fills; two for $500 to mortgage and two for $200 to taxes, but you don’t have to. (You can automate these Fills if you’d like them to happen on a schedule.)
Your monthly envelope will fill and empty each month (although I saw your other post about bi-weekly payments so I’ll address that over there) but your Annual envelope, which should be budgeted to Add each payment instead of Set the budget, will continue to accrue until you make the tax payment. At that point you’ll pay that bill from that envelope and begin accruing again.
So long story short: continue to make your transfers into your mortgage account, which will not change your available funds in the Envelopes at all. Use those Unallocated funds to fill the envelopes you’ll be using, then pay the bills out of those envelopes.
I hope that helps, but please ask if I didn’t explain something clearly!
Do you mean the mortgage itself a the joint account and you make payments to it by simple transfers? Or do you mean you have a joint account where you pool funds that are then used to pay the mortgage invoice?