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?
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?