Still Struggling with Credit Cards

All,

 

For the life of me I can't figure out the credit card feature. We put majority of our monthly expenses on a CC and pay it off every month. Somehow this process has resulted in my December "To Be Budgeted" amount to be way too high.

My "To Be Budgeted" amount seems to be a sum of my checking account balance, AND the amount of money I've spent using my CC this month which is under my CC Available Payment category. So, If I have $5000 in checking and have spent $5000 using my CC this month, YNAB is saying that I have $10000 available to be budgeted even though I don't have $10000 on hand. Hope this makes sense.

28replies Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
  • Why does your To Be Budgeted have any money in it? It should be zero because you've assigned it to categories.

    What is the credit card account balance (use a positive or negative number) and what is the Payment category available amount (use positive or negative number)

    Like
  • I don't want to budget the full amount because I don't have that much money to be budgeted. Credit Card account balance is -11,706.49 and payment available is -7,581.31.

     

    Checking balance is +11,169.85 and "To Be Budgeted" is +18,579.70

     

    Just doesn't seem to add up

    Like
  • Reconcile your accounts. Make sure your transactions in your CC are showing up properly: charges should be outflows and payments should be inflows in the CC register. If your total cleared balance from the bank does not match YNAB's, and you have verified that all the transactions are correct, you should change your starting balance to fix the difference.  I suppose you could do a reconciliation adjustment, too, but the problem would have been with the starting balance, so I would just fix that.

    If your accounts are reconciled (and you have input any pending transactions), then your TBB should be correct.  It doesn't sound like you have budgeted in other months, but that would require a few more audit steps, I believe.

    When the data is correct, you will need to budget to cover any spending, including in your CC payment category, which should at the very least be 0.  It should never be negative.  If you were a Paid In Full CC user, you would be able to pay off the entire balance of the CC with cash in your checking/saving at any time (most people hold on to that money and only pay the statement balance, but they could pay the balance if they wanted) and your CC category would be the absolute value of your CC account balance. It sounds like you're on the CC float, so any part of the balance you're not paying off would be considered interest-free debt, and if you want to minimize that in the future, you'll budget directly to the CC category.  Otherwise, budgeted spending on the CC will automatically set aside money in your CC available category to make a future payment.

    Always follow Rule #1: make the TBB = 0.  If you're not sure what to do with some of that money, I don't think there's anything wrong with making a category called "Decide What to Do with Me" - that's what we do if we have to move on from the budget meeting, but don't know what do to yet.  Then, when the priority becomes clear, move the money into the appropriate category.  For us, this has been better than loading up extra in something like a medical category, because then we're not tempted to WAM from the (how much again?) "extra."

    Oh, yeah.  Always cover overspending.  If you have spent money in December without budgeting, you likely have overspent categories.  Fix them.  The point of YNAB is to inform your spending, so you need accurate categories before the purchases.

    Like
      • Steve P
      • Sky_Blue_Clarinet.4
      • 1 mth ago
      • Reported - view

      Move Light Sound Life I think I understand this well. What I don't understand is below.  

       

      How can the below two images be true for my ynab account? Shouldn't the budget amount on the left (-$536.64) be the same as the "To Be Budgeted" ($18,579.70)?

      Like
    • Steve P The budget total matches your cash total. It *is* the plan for that cash. The $11.7k debt in the credit account is not considered.

      Edit: the fact your TBB exceeds your cash on hand indicates you have negative category balances.

      1. Budget to cover all red categories.

      2. Continue budgeting until TBB is $0, putting money into categories that will incur outflows soonest first.

      Like
  • Steve P said:
    and payment available is -7,581.31.

     This number should never be negative. That would likely be where much of the extra money is coming from.

    Like 3
  • Steve P said:
    I don't want to budget the full amount because I don't have that much money to be budgeted

    How do you know? The budget should be used to tell you exactly what you can and cannot afford. Allocate money to categories, highest priority to lowest, and stop when TBB is $0. If the category says money is Available, then it really is available for that purpose (assuming no red categories and your accounts align with those in the real world).

    Like 1
  • Hi, Steve P. I read your post "Still struggling with credit cards" and am curious to know if you were able to resolve the issue. This kind of mismatch between real money and "To be budgeted" has occurred for me in the past, and has led me to give up on YNAB. I really want the budgeting function, but the accounting as it shows up in situations like yours is really confusing to me. (I realize "budgeting function" and "accounting" are artificial distinctions--not perfect words--and will be criticized by some readers. Please don't. I'm trying to make sense of this system.)

    Were you able to resolve this in a way that made sense? I'm curious because I'm trying to decide if I'm going to try YNAB again. 

    Like
      • dakinemaui
      • dakinemaui
      • 1 mth ago
      • 1
      • Reported - view

      powerofideas There is never a mismatch between the cash you have in your YNAB accounts and the funds in your budget. If you are trying to make sense of things, I'd suggest trying to follow the recommended procedure: Allocate funds until To Be Budgeted is $0 (Rule 1) and cover at least the red overspending (Rule 3). A budget in such a condition is much easier to understand.

      Like 1
    • dakinemaui 

      I want to try again, so I appreciate your comment. Do you have any other suggestions for keeping this super simple? I'm wondering if I should avoid budgeting into the future, since that can also create confusion. 

      Like
      • Steve P
      • Sky_Blue_Clarinet.4
      • 1 mth ago
      • 1
      • Reported - view

      powerofideas No, unfortunately I have not found a resolution in this forum or from YNAB customer support directly. No one seems to understand my issue and I am close to giving up myself. No matter how many times people tell me "there is never a mismatch" and "just make sure your "to be budgeted" equals $0", there truly is a mismatch. My account balances are accurate. However, the amount of money in my "to be budgeted" is way too high. If I budget all of my money out, I will not have enough money in my accounts to cover my expenses. It all centers around the credit card payment somehow but I just can't figure it out. I wish I could talk with someone from YNAB over the phone or even do a screen share instead of back and forth on emails.

      Like 1
    • Hi Steve P !

      I took a look at things and just sent you an email! We can continue there if you prefer. :)

      Like 1
    • powerofideas As long as you budget for your starting balance and any subsequent purchases you make on your credit card, the amount Available in your credit card category should always be enough to pay off your credit card balance in full. 

      To learn more about how credit cards work in YNAB, take a look at our Quick Start Guide to Credit Cards and consider taking our Master Credit Cards with your Budget workshop! Those are both great resources to help you jump in with credit cards. :)

      Like 1
    • Steve P I'm sorry you're still having issues, but I'm sure Faness will get you sorted. 

      You're right - there's three parts to everything matching:

      1) correctly reconciled accounts, which you have

      2) TBB = 0, which you're skeptical of doing

      3) no red, overspent categories, which is my guess in your situation, specifically with the credit card category. This could have various causes, which may be hard to see without knowing more details.

      But, like I said, I'm sure faness will clear things up! 

      Like 2
    • Faness Thank you! I'm getting ready to try again :) 

      Like 1
    • Faness Thank you, Faness, for your response. I have everything set up now, and I can see that I get confused about what on the right side of the screen, in the budget, should correspond with the left side in actual accounts. Right now everything in the Available column is green, and adds up exactly to the total of my account balances. This includes the amount available for credit card payment; initially I left this out (thinking it was money I no longer had), but then I realized I do still have the money until I make the actual payment. (I wrote this out in case it's helpful to anyone else struggling similarly to make sense of the numbers.) 

      Many thanks to you and others for the assistance. I'm planning to budget only in one month, and reshuffle money as needed to keep all categories green at all times. With a bit of luck that might get me through the initial learning curve :) 

      Like 2
    • powerofideas We'll be here if you come across any other questions, but it sounds like you're getting the hang of things! :)

      Like
  • Steve P said:
    My account balances are accurate. However, the amount of money in my "to be budgeted" is way too high

    Then you have cash overspending (red, negative categories) or you may not understand that all cash-based accounts contribute to the budget (e.g., a savings account).

    As far as the former, you know the budget must total the cash you have. A shortage somewhere must be offset by a surplus elsewhere (apparently in TBB in your budget).

    Adhere to the methodology (especially Rules 1 & 3), and things will be easier to understand.

    Like 3
  • powerofideas said:
    I'm wondering if I should avoid budgeting into the future

    You certainly can always budget to the month in which a given check was received. (All past versions of YNAB worked that way.) Bills paid before you received money in a given month can use the carryover from the previous month. I like this approach because it keeps your "plan" (a.k.a, the budget) on a single screen (though perhaps scrollable).

    However, if you wish you can budget in next month's area AFTER the current month is complete. Just understand that the future-most To Be Budgeted is the only one guaranteed to be accurate. Just check it periodically.

    Like
    • dakinemaui Thank you. I'm going to start by not budgeting to future months. 

      Like 1
    • powerofideas in that case, I'd also suggest a category to allow you to eventually transition to budgeting with month-sized chunks aligned with the calendar.

      Like
  • Everybody here just keeps saying the same thing over and over.  I have the same issue.  I have 5k in my checking account.  I went to start my budget and it said I had 10k to be budgeted because it was including the money I owe on my credit card, which was also 5k.  How do I make YNAB understand that CC 5k is debt?  If I budget all the money in my checking account I will still show that I have 5k more to budget for.

    Like
      • satcook
      • satcook
      • 1 mth ago
      • 1
      • Reported - view

      Hot Pink Jackal your TBB number is $10,000. That definitely shouldn’t be the case unless you have a lot of categories with overspending in them. 

      Like 1
      • satcook
      • satcook
      • 1 mth ago
      • 1
      • Reported - view

      Hot Pink Jackal what other accounts do you have in YNAB?  That screenshot doesn’t show all of them....

      Like 1
      • Superbone
      • YNAB convert since 2008
      • Superbone
      • 1 mth ago
      • Reported - view

      Hot Pink Jackal Did you budget a payment for your starting credit card balance? If you are paying your card in full, the payment amount should be $4,652.20. If not, it should be somewhere between 0 and that amount. If it's negative then you have funny money in your budget.

      Like
    • Hi Hot Pink Jackal !

      When you first get started, your To Be Budgeted amount will include all of your accounts with a positive balance - so, Checking, Savings and any credit cards with a Positive balance. Since the credit card in that screenshot is negative, it wouldn't be included in your TBB.

      If you're still having trouble getting things to add up, we'd be more than happy to take a closer look for you! :)

      If you’re up for it, go ahead and enable Support Access for your account. Once you’ve done that, let me know—and mention whether you’d like to continue the discussion here or via email instead.

      Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • Reported - view

      Hot Pink Jackal If I had to guess, you budgeted a negative amount in your credit card payment category. To budget for a card payment, you budget a positive amount.

      Like
  • Hot Pink Jackal said:
    because it was including the money I owe on my credit card

    Sorry, it simply does not do this. If TBB exceeds the total amount of cash you have in your accounts, then you have red categories (cash-based overspending) and should fix that ASAP in accordance with Rule 3.

    Like 2
Like Follow
  • 1 mth agoLast active
  • 28Replies
  • 351Views
  • 9 Following