2-Way Roommate Reimbursements
I have read the docs about how to handle basic reimbursements where someone (work, friend, roommate, etc) owes you money so you create a "Roommate Reimbursements" category to stage the balance that they owe you and when you receive their payment, you add that as an inflow to that same category.
My question is around the best way to handle 2-way reimbursements. For example, the scenario of when you and your roommate both are paying for different expenses and thus, one's grocery purchase will offset some of their rent owed to you.
Ex: Say I pay $1000 in rent and create a split transaction with $500 for my Rent category and $500 for my Roommate Reimbursement category. Then say my roommate buys $200-worth of groceries, of which I owe half. So I now owe them $100 for groceries, or to simplify things, they just now owe me $400 for rent. How do I accurately represent this in YNAB?
I am hoping to avoid the pay and then pay back multiple times scenario.
This YouTuber recommended treating what they paid FOR you essentially as a payment TO you -- e.g. Add an inflow transaction to the Roommate Reimbursements category for the $100. This does lower the Roommate Reimbursements value to the accurate level, but then I have this "fake" transaction hanging around in some account that will never actually show up in my linked account transactions so I end up with a long list of uncleared transactions sitting around indefinitely.
Would love to get your help!
This is a great question. First of all, this is definitely an area we're looking at to see how we can make it easier, since it's such a common scenario. But here's what we've come up with for now.
It’s easiest if we follow a sample scenario.
Joe and Tom are roommates. Joe budgets for and pays the electric bill and the rent, and Tom buys the groceries and pays the internet bill. Joe should budget for rent and electric in his budget and pay those bills. Tom should budget for groceries and internet in his budget and pay those bills.
At the end of the month, most likely, one of them will owe the other one money.
Here’s how to settle it up using a sample month.
At the end of the month Joe’s totals:
TOTAL - $1100
At the end of the month Tom’s totals:
Groceries - $700
Internet - $200
TOTAL - $900
The total living expenses were $2,000. So each of them are responsible for $1,000.
$1,000 (what they’re each responsible for)
- $900 (what Tom paid)
$100 (What Tom owes Joe)
So this month, Tom also needs to budget for and pay Joe the $100 he owes him.
To balance this out, each roommate should keep a category called "Living Expenses Adjustment”, or something similar that makes sense to you.
Initially, you may not know how much to set aside for the living expenses adjustment category, or if it’s usually the same person who’s always short, but over time you’ll have some data. So initially, it’s important to budget something so you’re ready. Take your best guess and maybe add a little to that to be on the safe side. Then adjust as you learn.
Sky Blue Violin said:
Then say my roommate buys $200-worth of groceries, of which I owe half. So I now owe them $100 for groceries, or to simplify things, they just now owe me $400 for rent. How do I accurately represent this in YNAB?
It's simpler than you (and that YouTuber) think. :) A split transaction recorded in your checking account with a net of $0 (no money entered/left your account):
Split 1: outflow $100 against groceries (your portion)
Split 2: inflow $100 against Roommate (they paid your portion, so they now owe less)
Net (top-line): $0