How do I use you YNAB if you buy everything with credit card?
I’ve seen this question before but never a clear answer how do you use YNAB when you buy everything on credit card then pay it off those charges every month? What about occasionally not paying everything off - I.e some spill over?
I use YNAB to assign jobs to my dollars. When I make a purchase (regardless of how I pay), I record the transaction in YNAB in the appropriate account register (I have a whole bunch of on budget accounts - multiple checking and savings accounts, credit cards, store cards, wallet, gift card account, CDs) and assign the transaction to the appropriate category. The available balance in the category is then reduced by the amount of the purchase. I put most of my expenses on credit cards for the sake of convenience. But if you asked me to, I could pay off all of the balances immediately without 0% impact on my upcoming spending decisions because everything I bought on those credit cards is 100% budgeted for. I choose to only send money to my credit card when a bill is actually due, but I could also send a payment as soon as a make a charge (but that's needless busywork and reduces the amount of interest I am able to earn from my savings accounts). The impact to my budget page happens when I pay the store/vendor/service. Sending money from my checking account to my credit card companies has no impact on the budget.
Yes, in some situations, one might have to spend money on their cards that isn't backed by cash in a checking or savings account and therefore might have to accrue some credit card debt. But that doesn't particularly change how you use YNAB.
This is how I use YNAB. I have a credit card I use for all expenses and just pay it to zero every time I get paid. Basically what happens is that as you categorize transactions and fund those categories, YNAB adds the total to the amount available for payment. This might be different from the cards balance because if you don’t fund a category fully YNAB doesn’t consider that money available for payment.
For example, let’s say you start with a zero balance and buy $100 dollars worth of groceries and spend $40 at the movies, but only fund the groceries. YNAB would show a $140 account balance for the card, but only $100 available for payment. This confused the heck out of me for a while because I couldn’t figure out why these numbers didn’t match half the time.
To pay off the balance, you just enter a transfer transaction from your bank account to the credit card in the amount available to budget.