Combined Budgets?

[WhereIsHeath]

If you have both business (rental) and personal income and expenses, do you tend to combine everything into one big budget or separate business from personal?  It's all your money anyway, but I've found it helpful to see how my rental business is doing by splitting out the budgets.  However I recently started using YNAB and I can't decide if I should keep things split or put them together.  How do you handle separate sources of income and expenses?  Thanks!

[Hamster]

I would budget separately. It makes it much easier to see how the business is actually performing and keeping track separately makes it easier to fill out your tax returns.

Not an answer to the exact question you asked, but along the same lines. If you have your personal and business funds in a shared account, I would encourage having a completely separate checking acct and debit and/or credit card for the rental/business.

It makes the accounting much easier, will make things simpler if the IRS audits you at some point, and for the deposit at least, may be required by law.

Requirements vary by state, but in general, you should not mingle the tenant's security deposit with your personal money. The deposit is the tenant's money (not yours) which you are holding in trust. You may be required to notify the tenant where the deposit is held, and you may be required to pay the tenant any interest earned in that account. It's worth looking into your state's regulations.

[WhereIsHeath]

On the banking side of things, I definitely have everything separated out -- separate checking, savings, credit cards, etc.  Otherwise I'd go nuts trying to track all of my expenses at tax time!  I'm just curious about the actual budgets with programs like Mint and YNAB.  I have everything combined in Mint, but I recently signed on to YNAB and am wondering about the benefits / drawbacks of creating two separate budgets or just lumping everything into one.

[en dub]

I use Mint and I have all of our business bank accounts set up on there, as well as our properties, but I tell Mint to ignore all of the business transactions. This has a couple of benefits:

• You get to see your total financial picture in one place
• The transactions are in place when it comes time to do your bookkeeping for taxes (I use QuickBooks)
• You can still do your normal personal budgeting via Mint

I keep it all separate and don't treat the rental income as income when calculating savings rate. That, to me, is probably the biggest benefit of separate budgets.

[nktokyo]

Separate! There's no benefit and only pain come tax season if you have everything all mixed up together. I keep separate records for each property, each flip, each consulting gig or whatever. It lets me work out what is performing and what isn't.