Credit Card - Moving Principal Category Money to Credit Card Payment then my goal is underfunded
Maybe I'm not using YNAB correctly. Here's what's happening.
I have a category for "credit card principal" money.
I created a "needed for spending goal" for this category to force me to set aside a certain amount each month by the 15th of the month just for the principal payment.
I then move money from this category to the "Credit Card Payment" Category before I actually make the payment using my bank.
But when I do that, the goal goes back to telling me I haven't funded it. Which I did, but moved the money to the "Credit Card Payment" category.
I can see why mechanically it's doing this, as technically when you move money out of a category with a goal...the goal still needs more funds to go back to green.
But, I did meet my goal if you know what I mean.
The only thing I can think of is to turn off the goal, but that's how I estimate how much I need to set aside every month.
Is there something different I should be doing?
I'm actually trying to keep principal payments and interest separate so i can track them separately. I have an "interest due" category, and have goals set up there too. When the interest transaction comes into YNAB, I just categorize it as "Interest Due" and YNAB somehow knows what's going on, moves it to my payment and doesn't tell me my goal is not funded. That's sort of what I'm trying to do with the prinicpal payment category.
Would this work for my principal category? e.g. When my principal payment comes into YNAB in my credit card account....categorize it as "Credit Card Principal"...and YNAB does the rest without resetting my goal?
Your Interest category is working differently than your Credit Card Principal category because new interest transactions are considered Budgeted Spending, which moves to your Credit Card Payment category when entered in your register.
Your Credit Card Principal isn't Budgeted Spending, it's debt that has already been incurred. So, right now you're simply assigning money to that category, then moving money from to another category at a certain time of month. This workflow will always result in your goal not having been met once you move that money.
I understand that you'd like to track the payments you're making toward the principal balance so you know you're making progress. Have you considered creating a Pay Off Balance by Date goal directly in your Credit Card Payment category? This goal type will calculate a monthly amount to budget in order to pay off your credit card debt by a certain date. And, the goal automatically adjusts if you send a bigger/smaller payment than planned.
Hi, I'll remove my principal category and give the goal within the Credit Card Payment Category a try.
"Pay a Specific Amount Each Month" looks like a better option for me as I have minimal funds to meet the " Pay by Date" goals recommendations unless I pick a year far surpassing 2069....YNAB only goes up to 2069.
Typing that out loud sounds terrible doesn't it?
Just one question though. When the Interest transactions category amounts (budgeted "buying time" spending) are automatically moved to the Credit Card Payment Category, does that amount count toward the goal? For example if I wanted to plan for paying interest PLUS $100 every month extra, should my goal be [estimated interest] + $100 = [monthly goal amount]?
I think where I was originally tripped up was that my credit cards are not interest only....there is always a minimum payment that adds a small principal amount to the interest. So in YNAB it felt like I was only paying interest, and wouldn't really know what the "extra" amount should be unless I kept logging into my bank to check.
Of course it's not helpful to pay only the minimum amount, but some months...that's the reality. That's where the principal category came from. I'd budget for minimum, and add extra funds when available...and budget for the interest the normal way you do in YNAB.
I think I was looking for a YNAB button to select "budget for minimum payment" or something. [interest] + [principal]= [minimum required payment]. Not as a good idea, but as something that has to be done until more funds are available. I felt like I was only budgeting for interest, not my actual minimum payment required by the credit card. Kind of like a "make minimum payment" button I have at my bank.
[edited update]: Just read this forum post: https://support.youneedabudget.com/t/60h8jws/credit-card-interest-more-than-minimum-payment-how-to-enter-this-in-ynab
Perhaps I could just use the Interest Due category only by just budgeting for the entire minimum payment there [interest] + [bank required principal] = [Interest Due]. Kind of like just lumping in that bit of principal payment as interest, even though it's not interest. Then anything extra above that would be a true principal amount...which I would add to the Credit Card Payment category itself. Not sure though.
Slate Blue Wildebeest said:
When the Interest transactions category amounts (budgeted "buying time" spending) are automatically moved to the Credit Card Payment Category, does that amount count toward the goal? For example if I wanted to plan for paying interest PLUS $100 every month extra, should my goal be [estimated interest] + $100 = [monthly goal amount]?
The interest does not count toward the goal on the Payment category. As I mentioned, when all other outflows are budgeted elsewhere, everything you budget toward the Payment category IS progress (principal reduction if you want to look at it that way). Set your goal for $100/mo.
Slate Blue Wildebeest said:
just budgeting for the entire minimum payment there [interest] + [bank required principal]
If you only want to budget a lump sum, do it in the CC Payment category, not the Interest category. (That one just stays yellow/overspent.) It's not obvious at a glance what your net progress is this way, but it is an option.
Regardless of which you do, just make sure the Available amount is at least as much as the minimum payment amount.