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It is common to move money between accounts, such as transferring money from checking to savings or vice versa. Anytime a transfer takes place, there are two transactions that must occur: a withdrawal from one account and a deposit to the other. In this guide, we will explain some options that are available to help you handle account transfers.

__Key Takeaway: Always make sure the transfer transactions are of the same amount (but opposite signs) and categorize them both to the same envelope. This will keep your account balances correct without throwing off your envelope balances.__

# Option 1: Create a Transfer Envelope

When a transfer takes place, there are two transactions that must occur—a withdrawal from one account and a deposit to the other. These transactions offset one another and must be properly accounted for to avoid disrupting any of your other envelope balances.

The simplest solution is to create a single “Transfer” envelope, which will store all the transactions that are transfers between your accounts. This option allows you to see easily if your transfers are being handled properly because anything other than a $0 balance in this envelope would indicate that you are missing or have miscategorized a transfer transaction.

### Creating a Manual Account Transfer

When you have manual accounts, you may want to transfer money between them. For instance, if you have checking and savings manual accounts, you will need to record a transfer anytime you move money from checking to savings and vice versa. Here's how:
1. Create an envelope named “Transfer.”
2. Create a transaction in the account you are transferring money FROM as an “Expense” and select the “Transfer” envelope.
3. Create a transaction in the account you are transferring money TO as “Income” and select the “Transfer” envelope.

*__Please note the amounts of the FROM and TO transactions must be exactly the same.__*
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### Transfer Money from a Connected Account to a Manual Account (Pro Only)

There may be instances in which you withdraw cash from your checking or other account, or you may be tracking a specific account manually while other accounts are connected. In either instance, you need to be able to account for transfers that are taking place between your manual and connected accounts. This is what you can do:
1. Assign the connected account's transfer transaction to the “Transfer” envelope.
2. Create a manual transaction in the manual account assigned to the “Transfer” envelope for the same amount as the transaction in the connected account, but with the opposite sign (i.e., if it's a withdrawal from the connected account, then you will create an “Income” transaction in the manual account and vice versa).
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# Option 2: Create an Envelope for each Account

With MoneyWise Pro, a credit card envelope is automatically created for you when you connect a credit card. For other accounts such as savings or investments, you will need to create an envelope for each account you will be transferring money between.

### Accounting for Transfer transactions

1. Create an envelope for each account you wish to transfer money to and from, if they have not been created for you automatically.
2. Create or assign the deposit transaction and the withdrawal transaction to the same account's envelope. For instance, if you have a transfer with -$100 checking transaction and +$100 savings transaction, you will categorize both transactions to the “My Savings” envelope.

If you have questions about transfers or any other features of the MoneyWise app, feel free to contact us at support@moneywise.org.

MANAGE | Sep 10, 2021

Transferring Money Between Accounts

By: MoneyWise

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