Budgeting - but that goes on a CC

I'm cross-eyed over this:

Just started YNAB. Understood that I needed to budget for my current CC balance, so I did. Now I have a water bill that will be paid on a CC in a few days, but that credit card bill isn't due to be paid until next month. So do I budget for the water bill this month or next? How does YNAB know to apply my budgeted expenses that are on the CC and to do it next month? 

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  • If you budget for your bill now, when you pay, the amount in Available for the bill will reduce and the amount in Available in your credit card payment category will increase. This way the amount of the bill will be neatly put aside for you to pay the credit card statement when you are asked to do so.

    If you don't budget for your bill now, the Available for the bill category will go negative and orange. This tells you the amount will be converted to debt if you do not cover it before the end of the month. The Available in the CC payment category will be less than the debt on the card. If you do nothing, the Available for the bill category will be 0 next month and you will have to budget to the CC payment category directly to instruct YNAB you want to reserve funds to pay back your debt.

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      • Gold Elk
      • Gold_Elk.9
      • 1 mth ago
      • Reported - view

      Ceeses I guess I won't be able to see this in action until my current charges on my credit card bill are actually leaving my account with the cc bill payment at the end of next month. 

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 mth ago
      • Reported - view

      Gold Elk You can put in a test payment, review the budget, and then delete it if you are curious enough.

      Or create a second budget to use for testing different scenarios.

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    • Gold Elk you'll see the payment of the bill as soon as you enter the charge for it on the credit card. You won't see the actual credit card payment until next month.

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  • As a general rule (credit card or not), it doesn't matter when a bill is "for", it only matters when you pay a bill. If you want to always pay your credit card in full every month, you are better off to think you pay the bill when you put the charge on the CC than when you send a payment to the CC company. This way you don't use the money for something else.

    Another example is vacations, you often book ahead of time. It doesn't matter if the accommodation will be used in 3 months time, what matters is that you need to pay it now. The only way not to incur debt is to have the money to pay for it now, not to have it in 3 months time.

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  • Budget for it this month, because you are spending this month. The fact you incur debt on a cc is a secondary issue, but also one that is handled automatically if that spending is budgeted (funds are Available in the Water category).

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