Setup - Credit Cards & Expense Reports

Hi YNAB community!

I've just begun using YNAB and am trying to wrap my head around two particular challenges.
 

1. How do I budget appropriately when my automatically paid credit card payment will be not for the current month for which I'm accruing new expenses and for which I've budgeted, but for the previous month?
 

2. I have variable work-related expenses that make up a significant portion of my spending, and inflow when they're reimbursed. Sometimes the reimbursements are paid during the month in which I've accrued the work expenses, sometimes not. How do I budget appropriately for these situations?

 

Thanks for your help!

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  • As a one time only event, you must budget for all transactions that happened before you started YNAB. You do this in the applicable credit card payment category. After that, assuming you only make budgeted purchases, you won’t have to budget to the credit card payment category again. Though you do have to monitor this category because returns and cash back as statement credit can mess it up.

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  • @jenmas  - thanks for your help. Let's see if I understand: if I have a $3,000 balance on my credit card when I start using YNAB, I need to then budget $3,000 all one budget line? What if only some of that $3,000 is being paid off this month, and some next month? 

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      • jenmas
      • jenmas
      • 9 mths ago
      • Reported - view

      Beige Chef it doesn't matter necessarily. What appears in the right hand column for your credit card payment category is how much you have available to pay your card. What you choose to send to the credit card company is up to you. If you choose to only budget $2000 this month, you have to remember to budget the other $1000 next month as YNAB will not give you any direction on this because the transactions happened before you started YNAB. For transactions that occur after you start YNAB it's different. If you use your card at the grocery store for $25 and allocate it to your grocery category, YNAB will remove the $25 from the available amount in the grocery category and move it to the credit card payment available category.

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  • @jenmas thanks, I think I'm getting there. So every month I need to budget in the "credit card payment" category exactly the amount I will be paying the credit card company that month? I also don't understand how this works, as my budgeted spending doesn't get aligned with the budgeted credit card amount, since that amount reflects what I spent *last month*, not this month.

    Am I missing something here?

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      • jenmas
      • jenmas
      • 9 mths ago
      • 1
      • Reported - view

      Beige Chef It depends. Are you paying down credit card debt? If so, then you need to budget the amount of debt paydown you want to make, but this does not include any new transactions that were budgeted for in your categories - YNAB takes care of that when you enter transaction in you credit card account register.

      In my case, I am a paid in full credit card user. This means that if I wanted to, I could go pay my credit card balance down to 0 at any moment in time. However I merely opt to pay the full statement balance on or before the due date. In this situation I never budget to the credit card payment category (though I do occasionally have to negative budget from it to address adjustments related to returns or cash back statement credits). In my situation, the account balance on the left of the screen will always be equal to the credit card payment category available amount (except the account balance will be negative and the category balance will be positive).

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      • Chris M
      • cmac0351
      • 9 mths ago
      • Reported - view

      Beige Chef If you aren't carrying debt, you won't ever budget anything to the Credit Card Payment category.

      Pretend you have a bunch of cash in an envelope and you make a credit card purchase for $20. You now need to have $20 to pay off the card. You would move $20 from your purchase envelope to an envelope marked Credit Card Payment so you have the money set aside to pay the bill in the future. You wouldn't have to pre-load the payment envelope unless you are paying down debt and want to have extra in there to pay more than your purchases.

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  • Hi Beige Chef ! Welcome to You Need A Budget!

    It looks like a few of your questions have been answered, but I wanted to chime in with some additional resources. Here are the two best to help you understand how the Credit Card Payment category works:

    - The Help Docs section on Credit Cards & Debt

    - The workshop titled Master Credit Cards with your Budget
     

    And for question #2: There are two ways we recommend to handle reimbursements:

    1. Budget for the initial expense, then treat the reimbursement as income.

    2. Temporarily overspend, then use the reimbursement to cover it.

    You can learn more about those options in our reimbursement Help Doc. Let me know if you have any questions!

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