Credit Card Overspending

Retyping this post after my browser refreshed and I lost everything (mildly frustrated). 


I have been using YNAB for about a year now, and if there's one thing I have never really understood, it's YNAB's relationship to my credit cards. 

Here is my dilemma (context include) - I lost my job back in April and have been rapidly burning through my rainy day funds (held in a savings account). Consequently, I have just started using my credit card to the point that I cannot pay it off as I normally would for now. Basically, I need to carry a balance. However, it appears that I have confused YNAB as it seems to have allocated funds that I do not have toward my credit card payment - I don't completely understand how this happened? So now, I have reduced this amount to what I intend to actually pay; however, I have noticed my "to be budgeted" balance is in the red for September. Is this how things should look? 

I can provide more information if necessary - I am eager to understand this. 

Thank you in advance!


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  • No, TBB should not be red. Reduce one or more green categories until it is $0. Red means one or more categories are not backed by real money.

    As for the funds YNAB allocated toward paying the CC, why do you think you don't have them? It's as real as the money in any category (see above caution about TBB, though). YNAB put it there because it was backing budgeted purchases made on the card, under the assumption you would pay that amount off.

    It's fine to reallocate the cash in the Payment category elsewhere with the understanding you'll necessarily have to make a smaller payment and therefore leave a correspondingly larger debt. It may be useful for you to ensure categories that must be paid with cash are funded (contain money), while others that can be put on a card are the ones to incur yellow overspending. The yellow warning simply means you don't have a plan in the budget to pay off that purchase, which is hardly news to you.

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  • Hi Dusty B. !

    It sounds like you had funds budgeted towards a category where you used your credit card, even though you don't intend to pay the full amount towards the credit card.

    For instance, let's say you have $20 budgeted towards Groceries. If you spend $10 on Groceries using the credit card, YNAB moves that $10 from the Groceries category to the credit card category. If you don't intend to pay that $10 off immediately, you can use the move money to move that $10 where you'd rather spend it. Just remember that you'll need to budget funds towards the credit card category in the future when you start making payments again.

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  • Like others have (and will) explain, YNAB starts with the fundamental concept that you will not spend money you don't already have in the bank (somewhere). The payment method (cash, debit, credit card) becomes irrelevant. So like Faness explains, when you spend money you planned on spending (eg. groceries), one of 2 things happens. The money comes out of the account (cash, debit, cheque, online payment) or YNAB earmarks money in the bank to pay toward a credit card (think of it like YNAB takes money from your bank account - which it doesn't really do but pretend for now - and puts it over here in an envelope in a drawer to use to pay the new charges on the credit card bill). When you decide to not pay all the new charges this month, what you have to do is "pinch" the money out of that envelope in the drawer (the CC payment budget category in YNAB) and decide to spend that physical money somewhere else. In a perfect YNAB credit card world, the amount of the credit card account and the amount in the credit card payment category will be equal. That would be if the card started at $0 and I pay the card in full every month. In your scenario, you are deciding to not do that, so don't panic when the account and the payment budget category don't equal. 

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