Managing temporary debt from one month to another - inaccurate reporting
This is something I have already discussed with the support team, but wanted to revisit as you think about ways to improve the website and credit card tools. I am going to just copy and paste my previous conversation with support team:
So I made clothing purchases (that were not budgeted for, basically creating credit card debt) in the month of April. Now, in May my clothing returns went through and my credit card account has been credited back money for those purchases, let's say $200. Since I didn't budget any money in May for clothing, if I leave the "clothing" category listed on the +$200 credit to my account, the May YNAB Clothing category in my budget shows +$200. This is inaccurate, I don't actually have $200 to spend on clothing, since this was just a return to lower the debt on the account. If I mark that money to "to be budgeted" it is properly recorded with the credit card - however it messes up the ability to accurately record spending in the clothing category in reports later. If I want to pull up a report later on clothing spending, that report will not be accurate it will show $200 spending in April but not the return in May, which makes it sound like I spent $200 when really I spent nothing. It would be great if there was a fix to this in the future, a more accurate way to monitor and categorize returns :)
I think the problem is that the system doesn't have any way to know that the $200 have anything to do with one another. I might have a return and a reimbursement for per diem at once. I do want the return to go back to the card category after it zeros out the spending in the category, but the per diem is probably more money than I actually spent. So I don't want to lock all that money away in my CC payment category; I want control over how much gets budgeted for card payback.
I think this is an instance where it's important to pay attention to the budget. If everything was automated, then there'd be no need to think about where our money is going. But I do feel the frustration. If the return happens in the same month, and if you haven't moved money from other categories to cover the overspending, then the return can be categorized as inflow into Clothing, and it reduces that overspending - easy peasy. But if it comes the next month, you need to always categorize it as To Be Budgeted and then budget those dollars in the credit card category. BUT if it was *budgeted* spending, and the return happens in the following month, then categorizing it as To Be Budgeted reduces the balance on the card, but then you have to manually move those extra dollars from the credit card back to To Be Budgeted and re-budget them into Clothing. Whew! So many steps. I get that YNAB says to just always categorize returns as To Be Budgeted, but I don't like putting returns as To Be Budgeted because I don't want my reports to count returns as "income." I believe YNAB said in an email recently that they're working on some updates to how things like that are handled, but I haven't seen anything change yet. One simple but big help would be if the credit card category showed yellow when it doesn't match the account balance.
I miss being able to roll over debt within a category from one month to the next like you could with YNAB 4. Life doesn't operate on a monthly basis for me - it's more of a rolling two weeks. So if I have an overspending on the last day of the month, but I know it will get covered by the next paycheck (maybe in a few days), then I'll just leave it rather than underfund other categories. But because the next month marks that category as zero rather than negative, I sometimes forget that the category had overspending last month, especially if I don't get paid for a couple weeks. I also don't like just starting over because if I budget a certain amount per month, then I want to treat it as having to build that category back up over time, not just wiping it clean and starting from zero. For instance, if I budget $50 to household items every month and overspend by $25, then I have to not only remember to budget money in the credit card category to make the balances match, but I have to remember to only budget $25 this month rather than the usual $50 because I overspent last month. Much easier if the category already shows negative and I just budget my usual $50, and it does the math to show a correct category balance. I get that YNAB chose to do it that way to force users to cover overspending when it happens and to give a more accurate picture of credit card debt, but life doesn't start over at the beginning of the month. The old way was much more visual and ongoing (like, well, life).
Would this work: You get that return and categorize it as an inflow in the clothing category, then use the money from clothing to cover the overspending on your credit card or wherever you need to use it. That way the clothing category has positive spend from month one and negative spend from month 2 (shows the refund) so your overall clothing spend is still correct. Then you move that money from clothing up to your credit card, and your amount available to pay the credit card becomes correct.
I think this is what I've done with returns that happen in a different month.