How to cross reference credit card balance with budget

Hi, I imagine this has been answered somewhere, but in reviewing the documentation, I haven't been able to find this exact answer.

I pay off our credit card each month, and plan to stay ahead of our payment (trying to avoid the "credit card float"). 

When I look at my budget, I see an available amount that has been set aside to cover credit card payment. And it shows green if I have enough to cover my upcoming payment, which makes sense to me. 

What I am wondering though is if I want to be sure I am on top of my credit card balance from a budgeting perspective, should the amount available in the budget for my credit card payment be equal to the total balance currently on my credit card? 

So for instance if my budget shows that I have $1000 for my credit card payment but my credit card balance is currently -$1200, does that mean that I have $200 in spending on my credit card that has not been budgeted for?

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  • Yes. 

    Make your CC Payment category Available (positive) equal to your (negative) card balance at all times. 

    It should be a one-time budgeting event, then YNAB will handle the rest, especially if you only pay your statement balance. 

    There are a few known situations that can cause the balances to diverge, but someone else can post that list. 🙂

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  • When you first set up the card in YNAB, you need to budget directly to the credit card payment category for the existing balance on the card before any new transactions are applied. I *think* YNAB setup wizard currently prompts this by suggesting you add a goal to the budget line (personally I'm not sure this adequately makes the connection for a new user between the balance on the card and the Available amount in the payment category, but I haven't walked through the setup wizard in a while so I'm mostly basing that on the number of people who come here with your exact question and how often the answer is that they overlooked this step...but I digress).

    Note that the payment category can show green *even if* you do not actually have enough money reserved to cover your entire balance. You need to actively compare your Available balance to your account balance to verify. 

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  • Ongoing, if you pay your card in full each month, you'll always want the Credit Card Payment category to be a green and positive match to what you owe on the card:

    Here's a quick tip to ease any uncertainty you might have about being prepped to pay the card in full: you can use goals in YNAB to let you know, at a glance, if the category is short and needs a closer look.

    How? Set up a Pay off Balance by Date goal. Set the date far into the future (i.e. July 2060). (This future date means you don't need to adjust the goal each month, as you'll regularly pay off your card.)

    If your Credit Card Payment category matches what you owe on the card, it will be green and have a checkmark:

    If it is short, it will be yellow or green and have an incomplete pie.

    No checkmark? You'll need to check for overspending in the current month and cover the overspending.

    If you don't have any overspending in the current month (for instance because you're just getting started and simply haven't budgeted for the Starting Balance on the card as others on this thread noted), budget money directly to your Credit Card Payment category so it matches what you owe on the card and you achieve the checkmark! 😉

  • Thanks all for the tips! And thanks Dela for the goal tip, that is super helpful. Using that now and it really gives me more peace of mind. 🙂Thanks!

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  • Dela said:
    No checkmark? You'll need to check for overspending in the current month and cover the overspending.

     Or if it's just at the start of a new month, you might have a charge from last month that posted late and created overspending last month. You may want to move money in that month to cover the overspending. Make sure to check the previous month budget on day 5-6 of every month.

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