Incorrect Budget

Ok so I have reconciled my main checking account which is correct.  I also have a credit card which looks to be showing the right balance. However I have a savings account which has £900 in and I can't see where that money is going.   However it last months budget my household improvements is showing as under spend of £1180.  The thing is this from a credit card and I have already paid it off.

 

My understanding of credit cards are when the transaction comes in you need to assign it to a category, which is what I have done.

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  • The money in your savings account, as well as your checking account, is distributed throughout the various budget categories. Categories define purpose, accounts define location, and these are *independent* concepts. If you want more money in savings, then move it there without impacting the budget categories. OTOH, if you have some large bill payments coming up, move money into checking.

    The household improvement spending is actually OVER spending, because you went over the available amount. Ordinarily, overspending when using a credit card is yellow. Is that account set up as a credit card type, with a category under the Credit Card Payment group? Do you have the third party Toolkit Extension installed and configured to turn credit overspending red?

    Regardless of potential setup issues, the fact you paid those purchases off means you cannot have them overspent. As it stands right now, the money you sent the credit card is earmarked for other uses in your budget. To align the budget with the reality of your actions, you must move money from other categories to cover that overspending.

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    • dakinemaui I get the first bit about giving ever $ a job.  In regards to over spend on the credit card yes I do have a Credit Card Payment group and no I don't use a third party Toolkit Extension to turn the credit card over spend red.    I would rather not fix it by moving budgets from other categories as I feel this is not fixing the root cause of the issue.

       

      Let me get the logic straight on using credit cards. 

      1) I add the account as a credit card then I get a new category called "Credit Card Payment"

      2) Once my transactions start to come in I allocate them to any budget category I want example "Vacation"

      3) Once I am ready I can make payments via the "Credit Card Payment" category or I can pay off the balance of my credit card at the end of the month  from my checking account.

      4) If I get a refund on my credit card for a purchase I can put that refund against the original category it was spend on e.g "Vacation."

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    • Sky Blue Hail The thing you didn't write in #2 is important -- the budget category needs to have money to cover the expense. If it does, then money automatically moves from that spending category to the CC payment category (under the assumption that you want to pay off that purchase).

      In other words, YNAB will only reserve money to pay off budgeted purchases. You have to explicitly arrange to pay off any previous non-budgeted (overspent) amounts.

      Also very commonly, people do not reserve money to pay off the balance on the card when starting YNAB. You have to budget for that yourself.

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  • Sky Blue Hail said:
    Once I am ready I can make payments via the "Credit Card Payment" category or I can pay off the balance of my credit card at the end of the month  from my checking account.

     The CC Payment category is the amount of cash you have reserved to pay the CC bill. You can pay up to that amount whenever you like. If you need to pay more, move money from elsewhere in the budget first.

    A card with "paid-in-full" status will have a category that covers the entire account balance. Usually people only pay the statement balance, but you could pay the account down to $0 if you wanted to.

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  • Is the House Hold Improvements category you show above a spending category or is that what you've named your CC (and therefore it is under the CC Payments group)? 

    In general, you should understand that any red numbers means one or more other categories are overstated. If you have $100 split up between Groceries ($50) and Gas ($50), but you spend $100 on Groceries, the Gas category still says you have $50 to spend on gas, but you are out of money. You absolutely need to fix red numbers immediately to align YNAB with the reality that you gave away money earmarked for other purposes.

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  • Thanks I know its bad but sometimes I do buy things on my credit card that I know I don't have the current budget for.  If that is the case its it always best to just stick with the "Credit Card Payment " category and set a

    "Pay off Balance by date" ?

    I find using credit cards increasing confusing in YNAB. It also seems you can have one little error on a budget from 6 months ago that can effect the current months budget.. :(

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    • Sky Blue Hail If you don't have the budget for it, and you simply cannot move from elsewhere, then it is what it is. Yellow overspending indicates CC debt increase.

      However, you can't then turn around and send enough money to the CC to pay that purchase off -- you already decided you needed it elsewhere (otherwise you would have moved it to the CC Payment category). 🙂

      Again, the Available amount in the relevant CC payment category is the limit of what you can pay without stealing from other categories. Feel free to raise that limit before you pay, but you must respect the limit. Failing to do so means you can't trust your other category balances for spending decisions, which is kind of the entire point of YNAB.

      The Pay Off Goal just makes budget suggestions that will get you to paid-in-full status over time. You're going to have to adjust the timeline until the required budget contributions mesh with all your other priorities.

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    • dakinemaui ok thanks yes that does help.  However in this months budget it says this:

       

      However my credit card balance is only £-248.37

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      • dakinemaui
      • dakinemaui
      • 2 yrs ago
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      Sky Blue Hail You still need to move at least £527.95 to the CC Payment category. The reality is you already took that from some other category and gave it to the CC. You just need to decide what category takes the hit.

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  • Thanks mate your a legend !

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