How to deal with money owed.

Hello. I have a question about how to handle money I am owed. My partner owes me money for something I have paid for in December. It will take her several months to pay me back. I paid for it out of my checking account and created a 'Pay Back' Category for this item in my Budget. The amount shows up red and negative in the 'Available' column for this Category in December and does not appear there in January.

I thought that I could keep track of what she owes me by creating this Pay Back Category but since it does not appear in the next month's budget (at least not in the this category) I do not know how to deal with this amount. Also, how should I have dealt with this in December?

Thank you in advance for any help with this.

FirIslander.

6replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • For long term paybacks like this, I like to create a separate asset tracking account.  From my experimentation so far, asset tracking accounts aren't included in your "to Be Budgeted" total.

    Like
    • Daily Impressions I haven't figured asset tracking accounts out yet. How do I set this up? Do I enter a negative balance when setting it up as a tracking asset? I had the money in my checking to cover the initial purchase. How do I categorize the transaction in my checking for this purchase? Once she begins paying me back, how is this handled?

      Thank you for your suggestion.

      FirIslander

      Like
      • Daily Impressions
      • YNABer since Jan 2020
      • daily_impressions
      • 2 mths ago
      • 1
      • Reported - view

      FirIslander Set up a tracking asset account like "Loaned Out".  Tracking asset accounts are not part of you To Be Budgeted total. Create a transaction as follows in one of your cash accounts.

      Payee -> Transfer: Loaned Out

      Category -> Gifts: Temporary Loaned Out

      Memo -> Loaned to Thorasus

      Outflow -> $500

      This has the affect of taking $500 out of your cash/checking account.  The category will have $500 spent against it (so you need to adjust your budget so it is not red).  And the "Loaned Out" tracking account has a postive $500 balance with the memo.  When you are paid back, transfer it back into your cash account with a memo that it was paid back.   If you routinely do this, the "Loaned Out" is a ledger of everyone who owes you money, when it was loaned and when they paid you back.

      What if it is never paid back?  Well you already budgeted for it when it was loaned out so you are not throwing off anything.  If you want to just write if off, create a $500 outflow from the tracking account with a memo that Thorasus will never pay you back for this.

      (Disclosure, I've only been using YNAB for a month but I tried this method out to make sure it works.  Can't say if there is a better way to manage it).  dakinemaui has a good suggestions below also.

      Like 1
  • Since the cash is actually now gone, you should budget to clear that overspending. Ideally, you would have budgeted to that category ahead of time to have funds Available to be loaned, but catching up now is a good second option.

    Ifyou budget $500 to that category, then as long as the balance is less than $500 you are owed the difference. Simple.

    You can even set a Goal for the amount you budgeted, which does the math, telling you exactly what is owed (the difference).

    Like
    • dakinemaui Hi. I had the money to cover the original purchase in my checking. I have the money now to cover this. It isn't covered by income in December, the funds are in a category I use for unexpected expenses, or to use your term, Available To Be Loaned. So, in December I can move funds from this category to her Pay Back Category, yes? If I do this how do you suggest I track her payments to me for this expense/loan?

      Thank you for your help.

      FirIslander

      Like
      • dakinemaui
      • dakinemaui
      • 2 mths ago
      • Reported - view

      FirIslander Yes, move funds in Dec. As her repayments come in, simply categorize those inflows back to the same category. When the Available in that category reaches the amount you budgeted into it, then you're square.

      It's a little easier than using a tracking account, if you ask me. I like to keep things simple.

      Like
Like Follow
  • 2 mths agoLast active
  • 6Replies
  • 104Views
  • 3 Following