Entering Student Loans

I'm going back to school and want to keep track of my student loans and debt. 

I paid for one loan on a 0% interest credit card, and entered it under the spending category "Tuition" and the Account is my Credit Card. I also entered a student loan from the government under spending category "tuition" and the Account is "Student Loan." But now my budget is minus thousands of dollars.  I'm sure I'm doing this all wrong.  

What is the best way to enter and track student loans?  Obviously I'm not in school for economics, lol.  

7replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • Loans should be tracking accounts, not part of the budget. The credit card should be managed as an on-budget credit card.

    Like 2
      • Cyan Cello
      • Cyan_Cello.6
      • 2 yrs ago
      • Reported - view

      nolesrule Thanks so much. That definitely clarifies it for me.  

      Like
  • If you're currently using the loan funds, they had to get to you somehow. Are they on a credit card? Did they send you a check? Or put the money directly in your bank account?

    My loan money was disbursed into an account with a "credit" card. You'll put that account in the budget and spend from it. You'll want to set it up as a checking account, because YNAB doesn't like positive credit cards. 

    You'll also have a tracking account for the loan that you owe the lender. Before you spend anything from the loan, there should be a net zero impact on your net worth. As you spend from the loan, net worth will go down. 

    The negative amount in the tracking shouldn't be in your budget, but the positive amount you are using on budget will allow you to budget and spend the loan money.

    Like 2
      • MXMOM
      • MXMOM
      • 2 yrs ago
      • 1
      • Reported - view

      Move Light Sound Life mine are paid direct to the school. But for the record I have them set up as tracking. 

      Like 1
      • Cyan Cello
      • Cyan_Cello.6
      • 2 yrs ago
      • Reported - view

      Move Light Sound Life Thanks. That was very helpful! 

      Like
    • Cyan Cello Glad it helped! I just realized that I may not have been clear on one aspect about the loan - the point of the tracking account.  I have an example below for anyone else who may need it.

      Pretend you have $100 of your own money before you get the loan. Your loan comes in at $500. You now have $500 to spend on tuition/books/expenses, and you also owe the $500 to your lender. To represent both sides of the loan coin in YNAB, you put the $500 in whatever account it lives in (except not a credit card, if it's a pool you can spend from), and you make a tracking account for $500 as well. 

      The checking account reflects the reality that you're holding on to the money and can budget/spend it. 

      The tracking account reflects how much you have borrowed, and will only change if you take out more of a loan or make payments (or incur interest). 

      You need both accounts because you can't budget with a tracking account, and you will need to pay the money back eventually.

      If your school received the money directly, then maybe you can get away with just the tracking account, but I doubt that is the case with you, since you wanted to budget with it.

      Like 2
  • Move Light Sound Life Thanks! That's very clear and helpful

    Like 1
Like Follow
  • Status Answered
  • 2 yrs agoLast active
  • 7Replies
  • 206Views
  • 4 Following