joint credit card conundrum - advice please
I have been using YNAB for a few years and added our family expenses to it earlier this year but we don't have money in our account to cover our credit card purchases each month. we never pay interest - we pay the statement amount each month by transferring from our personal accounts (we have a set amount for grocery/home stuff purchased on the visa that we each contribute and usually keep to this amount or we have to find money elsewhere in the budget to cover it). My husband doesn't want to move money over to teh joint account to use for those purchases (the YNAB way) that will just "sit there" for that no interest grace period. (He isn't a YNABer)
I actually added a pretend "line of credit" for the grocery/home stuff visa amount that we transfer each month at the beginning of the credit card cycle so that TBB is not red - but it gets messy as its easy to move "pretend money" instead of "real money" (we have an emergency fund, money for my son, etc. in that account too) and the most irritating is that it never adds up - it "should" be simple - there's only three categories in there with "actual" money from the account, but it never adds up when i take our account balance and subtract those category amounts, there's always money missing. I think because it goes to the credit card payment - sorry it's so hard to explain. i've dug myself into a very confusing hole... and I'm spending way too much time trying to keep it all going.
any ideas on ways to simplify? I thought about :
1) getting rid of the joint account and just using my own personal account for our joint transactions (to cut down on transfer errors) and
moving money to the joint account to cover the grocery/home stuff visa amount from my savings so there is only "real money" in it - not ideal as then will "My " money just get swallowed up? or I could see if my husband can cover half
2) starting a separate budget just for the joint account. and separating it from my personal budget but that doesn't address the "pretend money" issue.
is there any other option you can think of to simplify this? I LOVE how my personal account runs so smoothly. I want our joint to be the same .
thanks so much for reading and for any ideas. and for being kind as I am still learning and getting our finances in order - I've made HUGE strides in my personal finances but still working on the joint stuff.
Sara B said:
My husband doesn't want to move money over to teh joint account to use for those purchases (the YNAB way)
That's not the YNAB way. The YNAB way evaluates affordability by looking at category balances and then assesses method of payment by account balance. Pay with any account that has sufficient funds.
YNAB doesn't care about the location of specific dollars -- they're all interchangeable, after all. Any synchronization of a set of categories to an account balance is a holdover from previous (pre-YNAB) workflows. (It's a great idea when all you have is accounts, but that's not the case when using YNAB.)
A separate budget for the joint expenses will definitely maintain separation, but it would require the transfer of funds to that account. If the pennies of interest are that important to your SO, this is probably a bad choice. Even with this approach, use of a personal CC ("personal" meaning it lives in your personal budget) for joint expenses will have to be tracked as reimbursements in both budgets. You'd be signing up for more effort without dedicated CCs that can be used solely for joint expenses.
It seems that you two are not really thinking about money as a unit. It's "my" money and "his" money. I'm not saying that's bad or good, but since that is the case, you might want to employ a workflow appropriate to that mindset. Financially, it's more like you're roommates.
In such a workflow, you'd have a category in your budget for his portion of things you buy. A joint expense like groceries would be split to debit both your Grocery category and Husband Expenses. (You budget for your portion in your categories.) If he buys joint groceries, you would again record a split transaction outflowing your portion of groceries to your grocery category and inflowing the same amount to Husband Expenses (since this is effectively paying you back). Whoever is behind can buy next time or you can just settle up each month. The docs have the recommended workflows when dealing with the budget side of things.
You pay your CC (YNAB tells you exactly how much is available for that) and let him deal with his.
This definitely preserves the separation between each person's money.
For completeness, the following are some thoughts about a fully joint budget, which can work even when one person isn't terribly into YNAB. In summary, I'd suggest either fully joint finances or fully separate (see above). Trying to do a bit of each can get messy, and one typically winds up with the disadvantages of both approaches.
The fully joint budget is a unified plan for all your and husband's money. (Big surprise, I know!) There are some joint categories, but there are some categories that are predominately (or even exclusively) yours or his. The artificial boundary of separate accounts aren't present -- the boundaries are defined by the category balances. You both make a plan at distributing the combined amount of money toward various categories while keeping you both happy. (Or you make a stab at a plan and he gives feedback, etc.)
Lots of people have His and Hers "Spending" categories. If there's money Available in the category, use any account you like to pay. Put things on a CC and keep as much money in a higher rate account as you'd like until it's time to pay the CC bill.
I realize you said he's not a YNABer, and that doesn't have to change much. My spouse has YNAB on the phone for easy access to category balances. Some people just print out their non-YNAB spouse's typical categories and tape them to the refrigerator. It's just about awareness.
This has the least "overhead" as far as account transfers and transaction recording. The tradeoff is more communication is needed. Invariably, someone needs more than originally planned, so deciding what category will give it up probably should be something to discuss.
At any rate, I hope it helps.