Reimbursements from someone else

Not sure I'm understanding this correctly, because it's not doing what I want it to do.

 

I setup a category for reimbursements from other people. I recently used that category, end of January, for my mother. Put a trans rebuild on my CC for her vehicle. She is going to repay me over the next month or so. What I want, is the balance of that to carry forward each month, until I've zero'd it out.

 

But it's not moving forward into February, so I'm not sure how to set it up to do that.

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  • Essentially you've lent her the money. 

    A potential solution: create a Tracking account for the receivable as an asset. Your payment to the Rebuild will match the original balance. As she pays you back, it'll be a transfer from the Tracking account to your checking account. This can come in as a TBB or to the Reimbursement category so that your reporting matches up to zero out the spending.

     

    Negative balances in a category do not carry over month to month.

    Like 1
    • jmorse would you say more about how a tracking account would work for these situations?

      I have a similar issue as Mitch.  I have three different family members that I have set up with categories.  If my wife or I are at a store we may pick up something for them and they pay us back or they will pick up something at the store for us and we will pay them back.  All is fine when it happens in the same month, but as Mitch says, if the balance is negative (they owe us) when the month rolls over, the balance does not carry over.  If the balance is positive (we owe them) the balance does carry over.  

      If I set these up as tracking accounts, would I set them up as asset or liability accounts?  Or does it matter?  They really change between an asset and liability, sometimes in the same month, because the balances change between negative and positive relatively frequently (2-3 times a month sometimes).   

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      • Mitch
      • Cyan_Hammerhead.5
      • 9 mths ago
      • Reported - view

      jmorse If I understand how this would work correctly:  I would need to "transfer" the balance from the reimbursements to the tracking account, at the end of the month? I don't see a way to have, for example, a CC transaction assigned to a tracking account.

      Example: I spend $1000 for someone else, put it on a CC, categorize it Reimbursements. Person pays me back $200 in the same month. I have spent $800 at the end of the month. I then create an asset tracking account, enter -$800 at the end of the month. Next month, person pays me another $200. I enter +$200, giving my asset a balance of -$600 owed. I imagine I would allocate any income from this person, to the reimbursement category? This seems like it would be the best way to track it at the end of the year correctly?

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  • I have a similar issue as Mitch.  I have three different family members that I have set up with categories.  If my wife or I are at a store we may pick up something for them and they pay us back or they will pick up something at the store for us and we will pay them back.  All is fine when it happens in the same month, but as Mitch say, if the balance is negative (they owe us) when the month rolls over, the balance does not carry over.  If the balance is positive (we owe them) the balance does carry over.  

    If I set these up as tracking accounts, would I set them up as asset or liability accounts?  Or does it matter?  They really change between an asset and liability, sometimes in the same month, because the balances change between negative and positive relatively frequently (2-3 times a month sometimes).   

    jmorse, would you say more about how a tracking account would work for these situations?   

    Like 1
  • I like the idea of using tracking accounts for this situation as jmorse says.  

    Here is another way to deal with it.  See the youtube video from Nick True, link below.  

    https://youtu.be/d1GQbytjj3s

     

    Nick True's method works well if the transactions happen in adjacent months (e.g. Jan and Feb) but not so great if they are spread out.  I do an annual canoe trip where everybody pools their expenses, which can happen from February to August, and then balance it out when the trip is over.  I really only want that balanced amount to show up on my budget for the canoe trip, but it doesn't work out well when I have a category for Canoe trips and have inflow coming in as reimbursement for the amount that I spent over my share of the trip many months earlier.  

    Like 1
    • Hot Pink Motherboard It sounds like the key thing you want to track is how much each canoe buddy currently owes you, right?

      You can do this from within YNAB, but it might be easier to pair YNAB with a spreadsheet or Splitwise. The reason I think so is that you're probably making a lot of shared purchases, where one transaction represents an amount that's going to be reimbursed by several other people.

      I'll give an example, even thought it will betray my complete lack of understanding of canoe trips.

      Say you pay $200 in canoe rental fees, and you're going to be reimbursed by your four canoe pals for their share ($40 each). In YNAB, whether you're using multiple categories or tracking accounts, you'd need to enter this as a split transaction with five lines.

      If this is only going to come up once or twice, then I'd go ahead and do that. If you're having to enter a complicated split transaction every single time you buy something for the canoe trip, though, I'd probably supplement YNAB with a different tool.

      The fact that you're "balancing it out," where someone else might make a purchase that represents a partial reimbursement, really sounds like a job for Splitwise to me—it's really good at this, and we're currently testing a method for entering Splitwise-related transactions in YNAB.

      Again, it's not that you CAN'T do this all in YNAB, but there may be a better tool for the job. Even if you use another app or spreadsheet, you can always see the TOTAL amount you're owed for the canoe trip by totaling up all transactions in the canoe trip category (or category group).

      Like 1
    • Matthew We do have one person that puts all of the expenses into a spreadsheet after the trip, divides the total by the number of people for a per person cost, and figures out who owes who and who is getting reimbursed by who.  And you're right, this is easier than tracking in YNAB.  

      I guess I was thinking of how to track my overall expense. 

      Example 1)  My out-of-pocket expenses for the trip are $150 ($100 in February and $50 in April).  Trip is in July.  In August Allen prepares the spreadsheet and determines everyone's share of the overall expenses is $200 (which I have budgeted for in YNAB).  I owe Kurt $50, which I pay him and put in my Canoe Trip category in YNAB.  All is good, because I still had $50 left in my Canoe Trip budget.  

      Example 2)  My out-of-pocket expenses for the trip are $150 ($100 in February and $50 in April).  Trip is in July.  In August Allen prepares the spreadsheet and determines everyone's share of the overall expenses is $100 (which I have budgeted for in YNAB).  Kurt owes me $50, which he pays me in September.  However, I only budgeted $100, but I  went over that amount in April by $50, knowing that I would get paid back that amount in September.  How would I handle that $50 debt between April and September?  

      As I typed the above, I partially answered my question.  Looking back over my Canoe budget for this last year, I realize I did not set a budget goal for this category.  I also did not budget any money for the expenses as they occurred.   I left them as red in the available column in my budget in the month that I spent money, thinking that I would/could "balance" this out when we figured out the per person cost at the end.  And I would budget my share at that time, after the fact.  Realize my error now, I should be budgeting before the trip.  

      I still have the question of how to handle the "debt" in example 2 above, if someone owes me money after the trip is over.  

      Like
      • MadDog
      • Navy_Blue_Pegasus.2
      • 9 mths ago
      • 2
      • Reported - view

      Hot Pink Motherboard For this type of thing, I would cover all of my expenses for the trip. That way, if something were to happen and I was not reimbursed, I have still made sure that I have covered it all in my budget so I am not going into further debt. 

      In the scenario where Kurt owes you $50, I would enter a scheduled transaction for the inflow of the money from Kurt to the Canoe trip category once I got the information from Allen. That way, I have the transaction as a reminder to follow up with Kurt to get the money. I can keep adjusting it forward in the budget if there is a delay but I still have visibility. I would do the same for the situation where you owe Kurt. Get the information from Allen, enter it as a scheduled transaction outflow to Kurt if I am not paying immediately. Use the canoe trip category.

      Like 2
      • Ceeses
      • Ceeses
      • 9 mths ago
      • 2
      • Reported - view

      Hot Pink Motherboard To handle the debt you have 2 choices:

      1. take on Credit card debt

      2. pay the "debt" with your cash until it is reimbursed.

      Option 1 works well if you can be reimbursed within the interest-free period of the card. Which is not the case here. So you will have to go with option 2. 

      What happens if you leave the debt in red in your budget? It means there are $50 more in your budget in other categories than there are in your bank accounts. So if you were to spend all your categories to $0, you would overdraft by $50.  You want your budget to reflect reality. And the reality is you spent that $50 to cover expenses for the canoe trip. You may have paid with a credit card, but if you pay the credit card statement in full and don't incur interest for that purchase, you are spending the cash on that eventually. So you need to move $50 out of your other categories. 

      Then when you get reimbursed, you inflow this directly categorised to the canoe trip. Then you can decide whether you want to keep this money there for the next canoe trip or you want to use it for something else.

      Some people don't like to move money around to cover those overspend as they say the amount is so small compared to the total amount of money in the budget. It's true if the reimbursement is imminent, moving money twice can be unnecessary work. But in your case, the reimbursement isn't imminent. And since it's a recurring event, seeding the category with the current expense and keeping the reimbursements in means it will be less money to save for future trips.  

      Like 2
  • Here is the official documentation to set up reimbursements: https://docs.youneedabudget.com/article/183-reimbursements

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