I have three savings accounts—a regular savings account for big
purchases and short-term emergencies, a savings account for my
daughter to allocate money that she's been given or that we're setting
aside for education, and a Health Savings Account (HSA) for medical
expenditures that I get as part of my employer's insurance.

I'm curious how people are handling interest earned on their savings
accounts. I can see two options to handle:

Option #1
* Allocate interest directly to an expense bucket. For instance, I
could allocate interest earned on the HSA Bank account directly to the
Medical/Dental bucket.
* Advantages: Simple
* Disadvantages: Don't have easy visibility into how much interest
I've earned. Is this really a problem though?

Option #2
* Allocate all interest earned to an Interest Income bucket and then
allocate the money from that bucket into the appropriate expense
bucket.
* Advantages: Can see how much interest I've earned on all three
savings accounts by viewing the Interest Income bucket. Also, the
graph seems "more correct" since the interest earned shows up on the
income graph instead of as a negative amount on the expense graph.
* Disadvantages: Two step process to get paid interest—1) allocate
interest earned to the Interest Income bucket and then 2) allocate
from the Interest Income bucket to the appropriate expense bucket

Could other MoneyWell users please weigh in on how they're handling
interest earnings?

Thanks,
Matthew
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