When you owe money to someone who also owes you money in return

Help!  Okay I am sure this is a kind of dumb question but I'm at a loss for what to do because everything I've tried either ends up with about $1000 extra in my budget (that doesn't exist) or about $1000 too little in my budget (that does actually exist in my bank account.)

I own property with a family member and there are some shared recurring expenses.  Typically I pay these expenses and the family member pays me back for their half.  *However,* I also owe the family member some money, and moving forward, part of the money they pay me as a reimbursement will go towards the debt I owe them.  No money actually changes hands, we just cancel the appropriate portion of the debt.

I have the debt set up in YNAB as a line of credit, and all the expenses are accounted for in the appropriate categories (paid in full by me).  I just don't know how to handle the reimbursement from the family member since I don't actually have any money from them... just several budget categories where I spent more than I budgeted.

How should I account for this?

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  • My first thought would be the money you owe them as a tracking account. That way you have an accurate accounting as it goes down.  Sounds like what you did as a line of credit. 

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      • lady_day
      • Administrative Ninja
      • lady_day
      • 2 yrs ago
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      Ruff16965 (05bd62cee897) Thanks.  Is there a difference between a tracking account and a line of credit?  We just set our account up 2 days ago and are still learning the system!

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    • Angela Day A tracking account is not part of your budget so it doesn't impact your day to day. Think your mortgage or 401K or things that you want to know about but that are not really part of the budget, they are not putting money into your pocket. 

      I use mine to track my back child support. The automatic payment comes out and I see the balance go down, but if I make an extra payment or two during the month it is a simply transfer and goes in the register like normal. 

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      • lady_day
      • Administrative Ninja
      • lady_day
      • 2 yrs ago
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      Ruff16965 (05bd62cee897) Got it - thanks, I'll check that out!

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  • I've done the same thing but on a smaller scale by using split transactions. 

    For instance: they owe you $10 but you want to record that as payment towards the line of credit.   You can create a transaction with a net $0 and one of the splits shows $10 outflow (transfer) to the line of credit account and $10 inflow into the desired budget category they are reimbursing you for.  

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      • lady_day
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      • lady_day
      • 2 yrs ago
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      jerald That's so smart!  I didn't realize you could make a net $0 transaction.  So to make it a little bit more complicated... the person owes me money in 3 categories (trash pickup, tv, and mortgage).  So would I just split the inflow 3 ways, and then put the entire outflow against the line of credit?

      EDIT: The last time I tried this I must have done something wrong because I ended up somehow applying the same $$ to both paying me back for my expenses, and paying down the debt I owe.  I just want the excess that's over and above my expenses to pay down the extra debt.

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      • jerald
      • jerald
      • 2 yrs ago
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      lady_day You can add lots of split lines so it can get incredibly complicated in just one transaction.  Money coming and going . . . from and to multiple categories.  And it doesn't have to be a net $0 transaction, either.  You can always play around with it in an experimental budget until you're comfortable with it.  

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