Credit card spending putting me in the red next month?

I had to put some expenses on my credit card this month that I will be reimbursed for in a few weeks. This month's budget has my credit card in red as -$559. When I go to budget for January, it has my starting balance as -$559. How do I manage this in the context of the rest of my budget until the reimbursement comes in? 

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  • There are basically only two ways to handle reimbursable expenses. Prefunding the expense or overspending and waiting for the reimbursement to fix the red. Linked YNAB help article here

    I use the prefunding methodology wherever reasonably possible, but I have also chosen on occasion to use the wait until reimbursed and left the category overspent until it arrived.

    You will leave the category overspent as the month changes over. This will result in a debt (or increase in debt) on your cc of -$559. When your reimbursement comes in, record it to Income To Be Budgeted, then budget it to your credit card payment.

    Reply Like 1
      • ClimbingOutOfDebt
      • I think I can I think I can
      • ClimbingOutOfdebt
      • 1 yr ago
      • Reported - view

      HappyDance Thank you. So even though my budget for January is negative $559, I can just otherwise budget as usual?

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      • HappyDance
      • YNABing consistently since 2014
      • HappyDance
      • 1 yr ago
      • Reported - view

      ClimbingOutOfDebt 

      Assuming your cc account is identified as a credit card account, I believe....(she mumbled under her breath).... that after the month transitions, the overspend is contained in the cc account and doesn't affect your TBB number, so doesn't affect your ability to budget your January income.  I'm hoping someone else will come along and confirm that for you.  The one and only time I let my category overspend carryover was in YNAB4, so I'm not entirely convinced I know what I'm talking about.

      Edited to add: ... and that is how it is described as working  in the article I linked.

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  • Hi there! If the Credit Card Payment category is red, it sounds like you may have paid the credit card company for the transactions that would be reimbursed, even though you left the spending category as overspent.

    That would look something like this:

     

    The Electric category is orange here because I paid that bill with the credit card but didn't budget for it. The Credit Card Payment category is red because I paid the full amount on the card, including what I hadn't budgeted for.

    This is what next month looks like:

     

    That's because the $100 overspent on the Credit Card Payment category rolls over to next month and is subtracted from what's available to budget there. To fix it, go back to this month's budget and click on the orange (Electric in this example), then move money to cover the overspending.

    If you're wanting to leave the reimbursement category overspent, you won't also be able to pay the full balance on the card -- you can leave it overspent OR pay the full amount, but if you do both, YNAB will pull the extra money needed from next month's budget as you saw.

    Let me know how it goes!

    Reply Like 1
      • ClimbingOutOfDebt
      • I think I can I think I can
      • ClimbingOutOfdebt
      • 1 yr ago
      • Reported - view

      Jen Thanks, I appreciate the explanation. The good news is that in January, the credit card line item did re-set to zero as you said. The bad news is it pulled so much out of my budget when what I "wanted" (ok, not wanted, but needed) to increase the balance I'm carrying on my credit card. So when I went to budget my paycheck, I started at -$700, which means I have no money for, well, anything. Help!

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      • Jen
      • Budget Expert
      • Jen_c
      • 1 yr ago
      • Reported - view

      ClimbingOutOfDebt so sorry for the delay here!

      I'd be happy to take a look at that budget and help you figure out how to best represent what's happened and set it up the way you want. Email us at help@ynab.com , and ask for me. 😀

      Jen

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