Woah, things got confusing when adding a credit card! How do I figure this out?

Does YNAB offer one-on-one coaching, because I do not see how this can be explained how how I can understand.  But here it goes.

So we decided to start paying all our bills and shopping with our credit card to take advantage of cash back rewards.  

For easy math, let's just say we already owe $900 on the credit card and it has a $1,000 credit limit. 

I calculated and budgeted for $800 of bills to come out using the credit card.  So I make an $800 payment to cover the future expenses coming out this month.

I decide to start from scratch and create a new budget in YNAB.

So far I've added

My Family Checking Account

My Family Savings Account

My Credit Card

I start going to all our bills to switch over the payment method to be for the credit card, except, now I've found that our auto loan payment will not accept credit card as a payment.  It has to come out of our checking account, but we don't have money to cover it, as it's now in our credit card account.

So to fix this, I add to YNAB

My Business Checking Account

and transfer $300 to our Family Checking Account.

I've assigned all the budgets and setup all the schedule payments and for what accounts they're coming from, I've also recorded the $800 transfer to our Family Checking to our Credit Card and recorded the $300 to our Family Checking to cover the auto loan.

Looking at the budget amounts, everything is so confusing!

In the budget tab, my credit card shows a negative -$670.53

And my "Ready to Assign" Shows a positive $379.98, which doesn't make sense.  We should only have $79.98 available after all the budgeted amounts.  And I already have $300 budgeted for the car payment.  

I also had to create new categories, since when I added my business checking, it showed way more available than what we have to spend for our Checking Account.

This is a nightmare, I've spent hours trying to figure this out.  How do I fix this mess so it makes sense?

I've used YNAB for years, but only for my Family Checking.  Adding all these other components I feel like maybe YNAB isn't built to handle multiple accounts?

Any help is appreciated!

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  • Forest Green Violin said:
    YNAB isn't built to handle multiple accounts?

     Actually, YNAB handles multiple accounts just fine.

    The main thing to remember is that YNAB's categories are like an overlay to your bank accounts. Which account the money is living in doesn't affect its category, and vice-versa.

    When YNABing with multiple accounts, the process to spend money now has two steps:

    1. Check the category. If funds are not sufficient, move money from a lower priority category. If there's still not enough, skip the purchase (or if you have to, increase debt...)

    2. Check the account you want to pay with. If funds are not sufficient, transfer money.

    I'll break down your specific situation shortly.

    Like
  • Forest Green Violin said:
    already owe $900 on the credit card

     When adding the credit card, the first thing to do would have been to go to the budget page and assign $900 to the CC Payment category. This would cover purchases made before the card was in YNAB and give you Paid In Full (PIF) status.

    Now, let's say you only wanted to pay $800 of that pre-YNAB debt now, and you'll get to the other $100 later.

    Go to the budget page and assign $800 in the CC payment category.

    When you make a CC payment, look at the category's available to ensure you have that money sequestered for the purpose of that payment. 

    Honestly, to see this in action, I would recommend deleting the payment in YNAB temporarily, then assign things properly, then enter the payment (obviously within one sitting).

    Like
  • Thank you!  I'm figuring that either (A) My Math is Wrong, or (B) I'm doing something wrong in YNAB.  And I think it's (B).  I know I shouldn't have an extra $300 floating around and there doesn't seem a place to put it since I've already  budgeted for that Auto Loan.  So I just don't know.  It seems like whatever account I add, it just adds it to one big pool  It combines my Business and Family Checking into the available balance, but what does it do with the Credit Card that has money I owe in it?  That I'm also adding money to cover expenses and with eventually get back up to owing a higher amount, until I make another payment.  I'll wait to see what you say about the specifics and see if I can gain a better understanding.  Thank you for your time in helping me out!

    Like 1
    • Forest Green Violin Sorry, I posted the same time you gave your second reponse, I'm reviewing that now.

      Like 1
    • Forest Green Violin Yeah, I used to write the whole answer in one post, but I think people seem to process better when I break out components. It's the internet. Communication is what it is. 🙂

      Like
  • Forest Green Violin said:
    I calculated and budgeted for $800 of bills to come out using the credit card. 

     When paying bills with a CC, budget to the bill category. 

     

    Forest Green Violin said:
    So I make an $800 payment to cover the future expenses coming out this month.

     Maybe this opens up your credit limit to allow you to use this method of payment, but that $800 is not covering future bills. It's covering past spending. On a category basis, at least, which is the whole point of YNAB.

    Like 1
    • Move Light Sound Life 

      I think that's the problem.  "It's covering past spending" from the credit card.  I need to do it in a way that YNAB knows that the $800 is for future spending on the credit card, not the past credit card balance.  It's actually both, but YNAB is looking at it as covering the negative balance on the credit card, not future payments.  

      So I'm not sure I understand how to get YNAB to see that $800 payment to the credit card as being for future spending.

      Like
  • Forest Green Violin said:
    So to fix this, I add to YNAB
    My Business Checking Account
    and transfer $300 to our Family Checking Account.

     Honestly, I would take that Business checking account back out of YNAB. 

    You can still do a transfer from Business to Personal at your bank. You would just have it be an Inflow: RTA and assign it where it's needed.

    Like
  • Forest Green Violin said:
    It's actually both, but YNAB is looking at it as covering the negative balance on the credit card, not future payments.  

     Can't be both. Rule #1 is give every dollar a job, which means the same dollars can't both pay for past and also future transactions. 

    You've gotta pick, and since you've already made the payment, you've picked the past. 

    Like 2
  • Move Light Sound Life said:
    You've gotta pick, and since you've already made the payment, you've picked the past. 

     So in YNABs eyes, now I have no way to cover my future spending?  I feel like in this case, YNAB isn't going to work for what I need it to.  Would you agree?

    Like
    • Forest Green Violin I would not agree. I think in your case, with what seems to be a fair bit of floating on the CC, you need YNAB even more to keep everything trending away from debt. 

      It's too bad you already made the payment to the card, because that would make things a little easier in your world, but that's a real-world situation. 

      We can absolutely represent your situation in YNAB if you'd like to learn how.

      I think it would be beneficial to you. 

      Like 1
    • Forest Green Violin To cover future spending in YNAB, you need to a) have the money in your checking/savings account and b) assign it to the category that you want to spend it from.

      If you already paid the $800 to the card, it is no longer in your checking/savings account, and thus is covering past spending on the card and cannot cover future spending. (Unless the $800 takes the card balance positive, which is a whole other can of worms, and sounds like is not the case here?)

      As Move Light Sound Life said, it sounds like YNAB could be very beneficial for you in figuring out where your money is going and what you are actually paying for vs. borrowing.

      Like 1
    • In fact, I'm going to write up how to deal with your situation in YNAB for the benefit of someone else who comes across this thread.

      It's your choice whether you would like to try it out. 

      You can also reach out to YNAB's help in your app (?). They will likely make you a video based on the way your budget looks when you enable support access. 

      Like
  • You say you used YNAB previously. Before you added all these new things, was it reconciled and with an RTA of $0? 

    If you've done all these new things today, I'd recommend getting back to that and I can walk you through the optimal set up. 

    Edit: I see you completely started fresh with a new budget, so this is perfect.

    Like
  • Sure, I'd love to learn, so I'll try and put my frustrations aside.  LOL.  

    I do know that I will have to have both the credit card and the checking account in YNAB as both will have different bills being charged to them.

    Would it be best to start from scratch? 

    If you could walk me through the optimal setup I'd appreciate it!  

    Like 1
    • Forest Green Violin Yes, start from scratch (since you already did)! 🙂 You can do it, frustrations notwithstanding. 

      Like
  • Move Light Sound Life said:
    In fact, I'm going to write up how to deal with your situation in YNAB for the benefit of someone else who comes across this thread.

     OK, sounds good to me and I appreciate that.  Thank you!

    Like
  • Forest Green Violin said:
    I decide to start from scratch and create a new budget in YNAB.
    So far I've added
    My Family Checking Account
    My Family Savings Account
    My Credit Card

     Ok, so do this again (or undo/delete stuff until you get back to this state).

    The credit card balance has nothing to do with RTA. You can choose whether your starting balance in YNAB is the -$100 (after payment) or -$900 (before payment). Just let me know.

    RTA will be the sum of your family checking and savings accounts. 

    Like
    • On the budget screen, assign your RTA $ to the categories that you will spend from before you get paid again. Include $800 to the credit card payment category only if you chose the starting balance of -$900.

      Does that cover what you need it to cover? No shame either way, it just helps me tell you the next step.

      Like
  • OK, I just used the "Make a Fresh Start" option, and removed the Business Checking.

    Is it OK if we use actual amounts here so I don't get confused setting this up?  I just used whole numbers in the beginning to try and make it easier for me to understand.

    Also, is it OK if I post some screen shots?

    Like 1
    • Forest Green Violin That's entirely up to you and how anonymous you want to be on the internet. Lots of people do use real numbers, but I would absolutely black out your email (top left) and any identifying bank names/transactions/other personal info.

      This is a public part of the forum, even if your username is Green violin. 🙂

      Short answer: go for it, but be smart. 

      Like
  • OK, So I've got the three accounts here and they've been reconciled.  

    The Credit Card, once I've imported it, is BEFORE the payment.  We made a payment of $921 to the credit card this morning, which is currently pending but has already given us that amount available to spend on the credit card.  If that makes sense.

    The Family Checking Balance is BEFORE I transferred $921 to the credit card for payment.  So technically, that $1017.04 won't be available to spend form the checking once that payment goes through.

    Also, we've already started making payments with the credit card since the funds are available, so we have some pending transactions to record in the credit card section of YNAB.

    My Ready to Assign amount is $1,017.17.  Should I go ahead and start assigning the amount to the categories in my budget, or do I need to record the pending transactions and payment first?

    Like 1
    • Forest Green Violin Actually, assign $921 to the Credit Card Payment category, since you know you're "about to" make a payment for that amount. 

      Then record the payment as a transfer from checking to credit. 

      Look to see how that affects both the resister and the budget page.

      Like
    • After that, you'll have $96.04 in RTA. Assign that to what needs cash next (car loan, right?).

      Then, go ahead a transfer what you were going to from your business account, record that as an Inflow RTA in YNAB, and assign that to whatever else needed cash before your next paycheck.

      Like
    • After that (RTA = 0), yes, please enter whatever the pending transactions are on your credit card.

      Like
  • OK, I'm working on this now.  It's not clear to me yet how this is working, but maybe after I see all the numbers and do the actions it will make sense.

    Like
    • Forest Green Violin Yeah, give it a try and let me know. 

      P.S. it might feel a little... heart-stopping (that was me at the beginning, too), but it's better to face the direction that will get you where you want to be. YNAB lays out your signposts, as it were. It will get better!

      Like
  • OK, something strange happened, so I'm going to stop here for a moment.  

    I assigned the $921 to the credit card.

    I also assigned $0.13 to a savings category, since I won't be spending that or assigning it any other category, it's just sitting in out savings account.

    I assigned the remaining balance of $96.04 to our auto loan payment.

    I then moved $921 from our checking to our credit card as a transfer for the payment we made that's still processing from this morning.

    So now....  and this was unexpected, but I have $24.03 available to assign.

    I did the transfer of $300 from my business checking, into our family checking, this brought the "Ready to Assign" up to $420.07

    After assigning $300 to our auto loan, it's now down to $120.07 for "Ready to Assign"

    Take a look at the screenshots below.

    So far, I still have pending transactions of bills processing on my credit card that I still need to record, but if I assign the budget amounts I won't have enough to cover the cost.  This is where my confusion comes in. 

    Let me know what the next steps should be. 

    Like
  • Forest Green Violin said:
    I did the transfer of $300 from my business checking, into our family checking, this brought the "Ready to Assign" up to $420.07
    After assigning $300 to our auto loan, it's now down to $120.07 for "Ready to Assign"

     Sorry not to complicate things further, I think I may have moved the 96.04 back to Ready to assign, then did the transfer from the business to the checking.  Then reassigned $300 to the auto loan.  Sorry for the confusion there.

    Like
  • Forest Green Violin said:
    So now....  and this was unexpected, but I have $24.03 available to assign.

     It's because your credit card is now positive in YNAB. Is that the case in real life?

    I think yes, because -896.97 + 921 = 24.03.

    Assign that $24.03 to one of the bills categories you're paying on the card.

    Like
    • Move Light Sound Life 

      LOL, I feel like an idiot for not knowing this.  We actually had two payments we made this morning.  The first was for $821.00.  Which would have still left a balance on the card, but she wanted to buy clothes for the girls and get the 4% cash back from using the credit card, LOL, so we paid another $100 to cover that expense.

      So yes, after the two payments process, we would have a positive balance of $24.03, however, we will probably never see that as we have pending transactions already that would immediately put it back in the negative once everything processes.

      I didn't mention they were two separate payments, didn't think it would be relevant, so I just summed them altogether as $921.

      Like
    • Forest Green Violin No worries. In YNAB, positive credit card balances go to RTA because it's your money to spend. 

      Just assign it to one of the pending bills categories and it will match reality.

      Then you'll have 96.04 in RTA to represent your cash as expected, right?

      If that's all good, we'll move on.

      Like
      • MXMOM
      • MXMOM
      • 3 mths ago
      • 1
      • Reported - view

      Forest Green Violin Question - is the credit card a prepaid credit card? If not, is your credit limit low like around $1000 which is why you need to make the payments "in advance".

      Like 1
  • Forest Green Violin said:
    I feel like an idiot for not knowing this. 

     Don't. It took me several days to figure it out (with back and forth here) the first time it happened to me.

    Like 1
  • OK, yes, if I assign the $24.03, then I'm left with the $96.04.   See the screenshots below and you can see where everythings at.

    Like 1
    • Forest Green Violin Cool beans. 

      So, the first thing to ask yourself about where to put the $96 is... Do you have any other spending that will require cash before you get paid again? 

      If so, put the money in that category(ies).

      If not, I'd probably fill up one of your pending bills categories.

      Then, go ahead and manually enter all your pending transactions. It might be painful. Remember to breathe!

      Like
  • OK, I've assigned $30 to a category we can only use for checking and I'm putting the rest, $66.04, in the Stuff I Forgot To Budget For Category.

    I'm adding all the pending transactions now.

    Like 1
    • Forest Green Violin 

      To determine the next advice I'll give -

      Do you ever pay interest on your card?

      Or,

      Are you in the cycle of charging things, then getting paid, then paying them off before the statement is due?

      Like
  • Well, we're doing something I've never done before, which is to use Credit Cards to A) Built Credit and B) Take Advantage of the Case Back Rewards and C) have an extra layer of security to protect our checking account when doing online purchases. 

    My plan was this:

    When we receive income, I determine how much we've budgeted for bills for the week (we get paid weekly), then I make one payment to the credit card to cover all those expenses, and just use the credit card from that point.

    Also, my plan was to round up each budget category, so for example, if my Electric bill was $125, I instead pay $130 to both, cover that expense and pay down the credit card a little at a time.

    That's the plan I came up with. 

    So far, it looks like we'll be using the credit card for everything except my Auto Loan Payment, some shopping at Winco, which only accepts debit and our Rent payment, because the amount of rent is higher then our credit card balance.  Everything else will come out form the credit card, including gas, groceries, bills and utilities and other expenses.

    OK, about to send some more screenshots here in a moment.

    Like
  • OK, things aren't looking too good.  Here's what it looks like.

    Like
    • Forest Green Violin Ok, on your budget page, somehow your Immediate Obligations have an extra 24.03 assigned. Get rid of that so your RTA isn't negative. 

      Like
    • I see why that was, now. You had probably put that 24.03 in a bill category, like electric, that wasn't pending yet. 

      If you want some mind-bending YNAB magic, go ahead and type 24.03 in your grocery category, since that transaction is actually pending.

      If you don't, that's fine - YNAB took care of the positive balance that became negative and helpfully put the 24.03 in your CC payment category for you.

      Like
    • Move Light Sound Life That amount was originally in the grocery category.  I took it out though and it set my Ready to Assign to $0.

      Like
    • Forest Green Violin Well, gosh. I'm sorry I led you astray there. It's fixed now. 

      Like
  • OK, I did that, and all my Money Is Assigned, but we have some negative balances in some categories that's being covered by the credit card.  How do we resolve this?

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