Credit Overspending and YNAB's budget moving
So, my wife and I pay our credit cards down to zero every month (thanks YNAB). But, sometimes we pay them down and find that we've spent more on our payment than we have allocated. Which is confusing since YNAB moves our budgeted money from the category in which we spent into the credit card budget item.
I have a theory, and I'm wondering if anyone here can tell me whether I'm correct. Sometimes we overspend in a few categories and go through the budget after entering transactions "fixing" the overages. When we do this, we simply add the money we need into the red/yellow categories in the first pass, then go back through and take money out of green categories until the red at the top of the budget goes back to zero.
My thinking is that when we do this, the money that we allocate into the overspent categories does not get reflected in the credit card payment category. Is that correct? Thanks for any answers you all might have.
It's more likely that you didn't budget for the initial balance on the card.
Your credit card payment category should always have an available amount that is the positive equivalent of your negative working balance. If it's not, make a one-time budget adjustment to fix it. After that, as long as your card doesn't go positive again, YNAB should have the correct amount ready in your CC - as long as you properly fund the original categories of the purchases, of course.
There's actually a list of other reasons the category can diverge floating around the forum. It includes the way rewards are handled.
Thanks. When I say Pay to Zero, I mean that I pay the full cleared balance. We did make a one time adjustment in the budget last month to fix it, but it is off again this month, and I'm not quite getting why. When we use cash back rewards we treat it as an inflow to the CC and make the category To be Budgeted.
Sea Green Stallion said:
When we use cash back rewards we treat it as an inflow to the CC and make the category To be Budgeted.
I'm not an expert on this, but I'm pretty sure this would result in you having extra in your CC payment category. You would then have to manually move that money to another category. I could be wrong.
However, since you're short in the CC payment category, either I'm wrong or that's not your problem. 😄
I'll leave this for someone else to confirm.
Good question. We do make sure that every bit of overspending from one month is covered by moving money around before the next month begins.
Maybe I'm just looking at something wrong. Maybe its been fixed since we made the adjustment last month, and I'm just getting confused. This little bit here was what was confusing me earlier today. I'm still a little confused about it, I guess.