Still Struggling with Credit Cards
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.
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.
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).
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.
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.
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.
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.
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.