Brand New! Need help with credit card budgeting into next month vs this month
Hi all! I have about 10 days left of my trial period and I'm definitely going to take the plunge, but I've got some questions about how the months lay out. I already use this months money for next months bills - sort of; but I can't see how to do that in YNAB.
So the big reason I wanted to use YNAB is because I don't know where my money goes (I'm starting to now, oh yes I am lol) and it's absolutely giving me pause before I just flounce around blowing money I don't have on stuff I don't need, so hey it's already doing it's job! But the main reason was to track category spending throughout any given month.
I use the AmexBlue for groceries and the BoA card for gas - both returning 3% cash back which is awesome. I budget $300 a month for each of these categories, and I pay these cards in full every month. Looking at the image I'm including here, I've done good staying within the budget - great, on the gas, actually! And I can see how it's already put the surplus gas money into September, which is fine.
The problem is the gas card closed on August 21st, and so the $161.71 is due on September 18th. Any charges I make now go on the next statement, and I want to keep track of that as a whole new $300, not added onto the existing balance. I guess I budget $300 per statement, not $300 per month. I need to make sure I don't spend more than $300 between now and September 21st.
I guess this is all just how I think about it? I'm ok with YNAB moving the surplus of that card to September; but now I want any transaction I make today to ALSO be put toward September, because I'm not going to pay for anything I charge now until October.
Am I going to have to just jiggle the dates to make it show me a running tally of what I've spent in gas? The grocery category isn't a problem because that card closes on the 1st of the month so that category will be accurate.
Welcome! And glad to see that YNAB is doing its job of showing you what you want/need to see.
For the budgeting, YNAB works on the month basis and not by statement. Since each statement is approximately a month long, I would recommend budgeting $300 per month and monitoring it from there. The statement date becomes irrelevant because you are simply making the gas and grocery purchases and the money waits in the credit card payment category until you pay it.
YNAB is a plan for the cash you actually have. When you assign money to a category, you are reserving it for that category's purpose. Money in the category stays in the category until spent or you move it to another category.
When you make a budgeted purchase on a credit card, YNAB repurposes the cash you have from being in that spending category to being used to pay back the credit card by moving it to the credit card payment category. This allows you to pay any amount toward your credit card at any time, as long as the money is in the card payment category.
So if you want to have $300/month for gas, you've got it set up correctly. If you have money left over at the end of the month, you just have to top up the category in September to get back to $300.
As a result, the month boundaries don't matter for credit card payments, only that you have enough money in the credit card payment category to make the payment. For a pay in full user, the payment category should have enough in it to cover the entire balance on the card at any given time, not just the next statement amount.
It sounds like this is all making more sense to you now, but I did want to send over a link to our new video on Credit Cards - Ben does a great job of going over credit card handling and will set up up to move forward with using them to support your financial goals!