Splitting A Monthly Bill, but Someone Paid for the Whole Year: How to Budget?
My 5 friends and I split a monthly subscription to a service. The service is $15 a month, and each time it gets charged to my card, I venmo each of them for $2.50.
I have a category I added called Fees/Friends Covering which is where I put expenses that I expect to be reimbursed via venmo/check. I put stuff like split bills, drinks, etc. on there.
So, every time I get the $15 charge, I split the charge into $2.50 for software subscriptions, and $12.50 for fees/friends covering.
The issue is that one of my friends just gives me money upfront for the whole year ($30). I put that money into my Fees/Friends Covering for that month since that's what the money's for, but then the next month, I noticed that after I get all of my payments, I have this:
Essentially, since I only got $10 from my 4 friends who pay monthly, and I got the lump sum the month before, the next month I am apparently "overspending on credit" by the amount of $2.50.
What's the best way to account for this? After everything is settled, I would hope to have my friend's lump sum reflected in this area, slowly depleting by $2.50 each month.
I would have a dedicated category for each friend, though you could do it with one for the up-front friend & one for everyone else.
Categorize the lump sum to that person's category. Your split of the $15 outflow should have a line for that person, which whittles down their category over time. (Ideally, splits for every person.)