How to deal with CC returns with new budgets

My budget started on 11/1/18. I made a purchase on 10/1/18 which I later returned in November, and received credit for it. I categorized the return/credit with the same category as if I were to make the purchase now. But something strange is happening with my Payment column now, for the credit card that had the return.

 

I contacted support and got this response from Laura W.

 

Thank you for including those screenshots. It's very helpful to see what you're seeing! First let's go over when you make a purchase with your credit card. YNAB moves dollars from your spending category to your Credit Card Payment category to prepare for your next payment. 


Categorizing a refund back to a spending category does the opposite. Those dollars move back to the original category. But that IKEA purchase was made before you started using YNAB so those dollars never made it to the Credit Card Payment category. The return categorized to your Improvements category moved money back to the original category, but it wasn't there in the first place - so the Credit Card Payment category turns red. 

To get things back in line, move money from the spending category (Improvements) to the Credit Card Payment category, and you'll be back on track!

I hope that helps! Let me know if you still have questions, I’m happy to help!

I am trying to get clarification on her response. Specificly about this part here. "To get things back in line, move money from the spending category (Improvements) to the Credit Card Payment category, and you'll be back on track!" 

1. How come in order I have to move money from spending (decrease my available funds) to credit card when this was a refund and I should have an increased amount in that category?

Thanks

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  • when you started your budget did you have an outstanding  balance on the card?  Did you budget to the payment category for that starting  balance?

    Reply Like 1
    • Herman I had an outstanding balance that I budgeted for.

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      • Herman
      • herman
      • 10 mths ago
      • Reported - view

      Pink Stallion since you budgeted for that opening balance, you have to categorize the return to "to be budgeted" then you also have to reduce the amount you budgeted to the opening balance by that amount.  This is an area I think ynab could improve the handling but it is what it is.  This will then show up in your overall to be budgeted and you can allocate wherever you want. 

      Reply Like
    • Herman  I looked up to see what was the opening balance and it was actually zero. When I categorize the return as "To be budgeted" the credit card column turns green, but my to be budgeted amount doesn't not increase by the credit amount.

       

      Am I missing something?

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      • Herman
      • herman
      • 10 mths ago
      • Reported - view

      Pink Stallion I think this is a confusing part of how ynab handles returns.  The return didnt make your balance go positive did it?  If not you should just to negative budget the amount to the credit card payment then budget it to whatever category you want.  If at that point your accounts reconcile and the cc payment category matches the cc balance you should be good to go.

      Reply Like
  • Hi Pink Stallion !

    That response is meant to have you move the abundance in your Improvements category to cover the deficit in your credit card category.

    This is because you're accounting for spending that didn't take place in your budget. If you had you spent $50 in your Improvements category in your budget and then categorized the $50 refund back to Improvements, the Available balance would be zero. However, since that spending took place before you started your budget, it's included in your credit card Starting Balance and needs to be applied back to your credit card category to cover it.

    Does that help clear things up?

    Reply Like
    • Faness no not really. From my understanding there is no spending only credit coming in, making my payment smaller.

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    • @Pink Stallion  Essentially, that refund reduces the amount of debt you owe. However, YNAB needs to know where the money came from in your budget. If the original transaction had taken place in your budget, it's like saying I was going to spend this money on Improvements, but I changed my mind - leave it on the credit card. Since the transaction didn't originally take place in your budget, it's saying apply money from my credit card to this category.

      If you categorize the transaction as Inflow: To Be Budgeted, it'll adjust the amount due on the credit card without affecting your other budget categories. I think handling it that way, rather than moving the money back from your Improvements category, will make things clearer here. :)

      Reply Like
    • Faness Okay I switched it to the "To be budgeted" category, and the credit card  numbers now are fine. But how come my to be budgeted amount didn't increase?

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    • Pink Stallion 
      When you categorize an inflow to a credit card as Inflow: To be Budgeted that inflow will only reduce the balance of the credit card. It doesn't increase your amount To Be Budgeted because your credit card balance takes up that amount. For instance, if your credit card balance was only $20 and you entered an inflow for $50 categorized as Inflow: To Be Budgeted, then you'd have $30 added to your To Be Budgeted (the amount positive on your credit card). This accurately reflects what happens in your account as well as far as the refund is concerned. The credit is applied, and your account balance is reduced.

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