Credit card refund

I have read and re-read the credit card refund posts  and understand that the refund should go back to the category from whence the charge originally came.

But here is my situation.....

I have a category called "Dillon- Living Expenses" for my son who is away at college.  Each month $200 is deposited into that category.   When he uses the credit card to charge groceries, etc, I use that category to help pay those expenses.  

In April, he overspent his Living expenses by 300.00 so it was showing -$300 at end of April which I did not reconcile and fix as I did not have the money.   So come May, that -300.00 is now gone and reset to 0 in the category.     I also did not make any payment on the credit card yet so the balance on the card is $500.00.  (the $300 he overspent plus the $200 for April).  

Now it's May.  $200.00 is deposited again to his Dillon- Living Expenses category.   Then a refund comes through for $100.00 to the credit card which reduces the balance but it's still not paid off.  Still short-  after the credit I still owe $200.00.   ($500-$100-$200 from April that I had the money in Living Expenses)

How do I categorize the refund.  I do not want to put it back to "Dillon- Living Expenses" category because he does not have $300 for May to spend.  He still only has $200.00.  

What are my options?     I don't want to move $100.00 from that Living Expenses category to somewhere else cause it's not "real" money.   It's money he already overspent from a previous month. 

I hope that makes sense.     Am I doing this all wrong?


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  • Categorize the refund back to Dillion-Living Expenses, because the reality is the refund effectively undid some of his spending.

    Two observations:

    1. The refund reduced the debt on the card AND the amount in your CC Payment category. This means the gap between debt owed (account balance) and cash reserved for debt reduction (CC Payment category Available) is unchanged by the refund. The problem is there was already a gap of $300 from the April spending, and therefore there's still a gap of $300.
    2. You've stated you don't want him to spend that extra $100 in the future.

    Consequently, you should move $100 from his category (which increased because of the refund) to the CC Payment category.

    There is still a gap of $200, which you'll need to work out with him how that is repaid (if at all).

  • I think things are somewhat confusing because you're trying to do several things at once: plan for his future spending and track what he owes you. This is further complicated by the fact that the budget is the plan for your cash and there's no such thing as negative cash. YNAB is fighting you, trying to keep the plan for your cash grounded in reality.

    If I were you, I would just accept that this won't be the last time he'll exceed his allowance, and would institute a process on your side to handle everything seamlessly. In short, do the following two things:

    1. Read the first approach to reimbursement tracking that uses an offset category. If the category is less than the offset, then he owes you money.

    2. Devote $300 of your cash (e.g., from an emergency fund) toward covering any expenses for which he owes you. Do this in the April area, since you know at that point there was $300 of expenses he owes you. As the reimbursement docs indicate, increase the budget value on his category by $300 and make a note  that the "We're Even" point is an available amount of +$300. (I would change the category name to "Dillion Living Expenses ($300 Even)" or similar.)

    Now it's easy to keep track of what's going on, and you won't have to muck with moving funds to the CC Payment category. You've basically implemented an "overdraft" tracker within his category.


    Here's what happens in a hypothetical usage, starting at the beginning of April:

    • April 1: "Dillion Category ($300 Even)" Available = $500. (This from the offset of $300 plus his normal $200.)
    • April 30: Category Available = $0. This is less than the "we're even point" of $300, so he owes you the difference ($300).
    • May 1: you budget his normal $200, taking the category available to $200. He owes you $100 assuming he doesn't spend anything. Obviously he will, but hey, you were expecting this and have it covered.
    • May 5: the refund shows up. His category Available increases by $100, taking it to $300. You are now technically even, assuming he doesn't spend anything. You're under no illusion that'll happen, but you are prepared to give him up to $300 of "wiggle room".
    • May 10: he knows he's authorized up to his normal $200 spending each month, but he is also trying to "pay you back". He buys $125 of groceries hoping it will last the remainder of the month. Available is $175. This is less than $300 (the "we're even" point), so you are owed the difference ($125).
    • May 31: by raiding the freezer, he managed not to spend anything else. His category Available is still $175.
    • June 1: You give him another $200 infusion. Available goes to $375.
    • June 3: He buys $75 of groceries. Available goes to $300. You are even, assuming he doesn't spend anything else this month.
    • June 10: He realizes he's getting low on food and embarks on the genius plan to spend more time with family and mostly eat your food for the rest of the month. :-)
    • June 30: Plan successful, no more spending in June, so Available is still $300. You're still even.
  • dakinemaui said:
    He realizes he's getting low on food and embarks on the genius plan to spend more time with family and mostly eat your food for the rest of the month. :-)

    That's amusing!

    I wonder though - is the son looking at this YNAB account for spending guidance?  Surely, a college student can handle doing the $300 math, but looking at $0 is psychologically different than looking at $300.

  • Appreciate the responses.   I need to read through this a few times and absorb and I might have another question or two (or not).    

    Yes, technically he got the money back into the Living Expenses category because of the refund and he should be able to spend it.  But I say no since he "overspent" on stuff  he would have paid for himself but  lost his part time job due to COVID19 so he has no income coming in.  So this should just be a short term thing as he goes back to work next month.  

    So let me maybe look at the reimbursement tracking or maybe changing the categories on his overspending so when the refund comes back it doesn't hit his Living Expenses but another category.

    He does not have access to the YNAB- as it is really my YNAB.   

    He can't raid my refridge -- he's a vegan and we are carnivores.  :)    I'd still have to buy his groceries cause there is nothing here he will eat.    Which I will probably be doing when he comes home this week for a visit.  

    Again, thanks for your help.  

    Like 1
  • Move Light Sound Life said:
    s the son looking at this YNAB account for spending guidance?

     I had the same thought, but then figured they really should have their own budget. It's even more important to plan spending when money is tight.

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