Amex Plan It, best way to handle in budget.

So I decided to make a large purchase and finance it through Amex Plan It feature. Basically you create a structured payment plan for a particular purchase with Amex. The credit card balance will be reflecting the amount owed minus the payments as they are made. 

However when I go to forward in my budget, this balance doesn't appear to show up under the Credit card when I look forward. I would think since this is basically a loan, the balance will reflect on the credit card as it is payed off.

What is the best way to address this new debt in YNAB?

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    • nolesrule
    • Stealing From the Future fix is an improvement but is incomplete....
    • nolesrule
    • 1 yr ago
    • Reported - view

    The category in your budget is a payment category. It represents the money you have set aside in your budget to make your payments on the credit card. I assume since you financed the purchase that you did not have the money to pay for it outright in the purchase category, so that money would not get moved to the payment category.

    Therefore you will need to budget money to your payment category to cover the future payments on this purchase.

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      • Mae P
      • Coral_Admiral.10
      • 1 yr ago
      • Reported - view

      nolesrule Yep. I did an Amex Plan It last year. Each month I added the monthly "principal" amount to the budget column and entered the associated fee separately. 

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  • What about budgeting the money under credit card payments? Or will that mess things up?

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      • nolesrule
      • Stealing From the Future fix is an improvement but is incomplete....
      • nolesrule
      • 1 yr ago
      • Reported - view

      Gold Ink If you didn't have the money in the category when you made the purchase, that's what you'll do if you budget the money for the payment in future months.

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  • In the months between now and the end of the payment plan, you'll need to budget to the AMEX Payment category to narrow the gap. (Paid-in-full status has a Payment Available that covers the entire account balance.)

    Set a Pay Off Balance by Date goal if you need help with the math. Note the calculated values assume you can budget to the category in the target month. If you cannot do that, set the target to sometime in the previous month.

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  • Last piece is that you’ll want to categorize the monthly fee to “interest and fees.” 

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  • Y'all I just want to say THANK YOU SO MUCH for this thread!!  Plan It has been breaking my brain for months now (I'm a new YNAB user) and this makes so much more sense now thanks to your tips.   

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  • I use the Plan It feature very sparingly, but it always goofs up my budget - these tips are perfect, thank you!

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  • So this all makes sense, but YNAB still pulled in the purchase that I used the “Plan It” feature on (so I have a -$600 transaction that remains uncategorized).  If I assign a category to that transaction, then that category will show as overspent even though it isn’t.  I already created a category/goal for the interest/plan fee, and also created a goal on the Amex Payment for my monthly cost. I am just unsure how to categorize the initial purchase. Any input is appreciated!

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    • Silver Robot The original purchase can be categorized in whatever spending category it belongs (Household, Boat, Tuition, or whatever it is!). You'll see credit card overspending in that category the first month, which is a-ok! When the month rolls over, that overspending won't rollover and instead it will be reflected in your overall credit card balance.

      To pay down that balance, you'll do as suggested above: set a goal in the Credit Card Payment category and assign your payment amount to that category every month to pay down the balance over time. :)

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      • WordTenor
      • Can we agree that goals are dumb and immature? Sure.
      • WordTenor
      • 4 mths ago
      • 1
      • Reported - view

      Silver Robot The category *is* overspent. You bought a doohickie that you haven't budgeted for.  If you don't want the category to be overspent, budget for the doohickie. 

      This is exactly the mindset Amex wants you to have about the thing. "I didn't really spend $600 right now because I get a 0% loan to pay it back." But you did spend $600, and YNAB is forcing you to reckon with that. 

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