Over Budget Spending
How do you handle this type of situation?
My pest control company double charged my during the month. I made a phone call, and they are going to refund the second charge. In the mean time, I categorized the second charge under "Pest Control," creating an alert with a red -$49.00. When the refund came through, I planned to add it back into "Pest Control" to eliminate the alert. However, the month ended, and I have not received the refund yet. The -$49.00 did not carry over into the current month.
How do I budget the $49.00 when it comes in?
The reason it did not carry over, is YNAB is set up that any red overages are taken care of the first thing in the new month.
My cell phone bill is on a true 30 day cycle so I have months with 2 bills, How I handle this is I pay them both, that is what I would do in your situation, then when the refund comes in put it TBB (To Be Budgeted) and put it back where you need it.
Was this a credit card transaction, or debit card?
If it was a credit card transaction, it turn into credit card debt, and you need to budget money to the card payment in order to fix it. (i.e., YNAB will tell you you don't have enough money budgeted to pay your card in full.) If it was a debit card, check, or cash transaction, it's just subtracted from To Be Budgeted when the month rolls over.
Hi Rubik's Cube !
If you have a moment, take a look at our reimbursement Help Doc.
There are two ways to handle reimbursements: 1) Budget for the initial expense, then treat the reimbursement as income or 2) Temporarily overspend, then use the reimbursement to cover it.
Since it was red overspending, it was automatically subtracted from your To Be Budgeted when the month rolled over - essentially, it's been covered, so you can categorize the $49 you receive as Inflow: To Be Budgeted once they process your refund.
I just wanted to remark that this scenario was a lot easier to handle using YNAB 4's "Red Arrow" function. I wish it hadn't been removed.
I care about reporting accuracy. I don't think a refund (or reimbursement) should be classified as "income", and I don't think an erroneous charge (or reimbursable-expense) should be classified as "spending". But that's exactly what happens if you record your refunds as "Inflow: To Be Budgeted."
Instead, my workaround for the new YNAB, to carry negative category balances over to the next month, is to record a negative budget entry at the beginning of the new month. When I eventually receive the refund (or reimbursement) I'll record it as an inflow directly into that category, which should bring the balance back to $0.