Mistaken charge that will be refunded (In a week)

Hi!  I recently changed my auto insurance.  I cancelled my policy before payment was due, but they auto-deducted my regular premium today.  I called and they will be issuing a refund on the 28th.   

So my question is - currently, it's showing as an overspend in my insurance category.  Do I just leave it as an overspend and reconcile when I get the refund?  Or do I move money from other categories until I get the refund? 

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  • If this was on a credit card, just leave it. It will resolve itself on the 28th.

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  • The hardline view is that your budget should reflect reality.  The reality is that money is no longer in your account, so you should cover that expense until you get your refund.  If you have enough of a buffer that it's not a material issue to you that that amount is missing, the softer touch would be to just let it ride and rectify itself on the 28th.

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    • Coral Unicorn  Thanks!  That helps!  

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  • Coral Unicorn said:
    The reality is that money is no longer in your account

    Only if OP paid with cash. If a credit card was used, they have exactly as much cash as before.

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    • dakinemaui You're right, I should have said that money is already obligated.  If for whatever reason the refund doesn't come through, that could wind up being an issue, particularly on a credit card where it may be converted into interest-bearing debt if not paid off by the due date.

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  • Coral Unicorn said:
    If for whatever reason the refund doesn't come through

    Actually, leaving it as an uncleared transaction would call attention to the fact it hadn't come through at the next reconciliation (and the next...), prompting me to investigate.

    Yes, you could enter the "refund" in the scheduler for a similar prompt. Again, this is the preferred option when funds are tight.

    I just prefer less effort. 🙂

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    • dakinemaui Leaving what as an uncleared transaction?  The refund that hasn't cleared yet?  Or the initial charge that has cleared your account?

       

      My point behind the hardline stance (and to be clear, I also mentioned the other option of just floating it until the refund came, if that was within their means) is that the hardline view suggests your budget should reflect reality.  The reality is you have money that was spent (whether it was your own or the credit card company's) and until you have the refund in hand, that spending should be covered.  That's totally disconnected from whether you have a prompt in YNAB to remind you about the expected incoming refund.  You can both cover the existing spend AND set up a prompt to remind you that the refund is incoming.

       

      Just because you choose to go with another method as your preferred option doesn't mean that is or should be the preferred option.  But it sounds like you've got your mind pretty well made up on this, as do I, so I'll just leave it at that.  Have a nice day! 🙂

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      • dakinemaui
      • dakinemaui
      • 10 days ago
      • Reported - view

      Coral Unicorn I must apologize, I've mixed up two threads. My most recent reply about "leaving it as an uncleared transaction" makes no sense whatsoever.

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  • Coral Unicorn said:
    the hardline view suggests your budget should reflect reality

    Again, I am discussing credit overspending, and YNAB has no hardline stance against it. In fact, they recommend leaving the category overspent when cash is needed elsewhere or as one approach to reimbursements (which is effectively what this is). As they are the ones who drew the "line", I very much doubt they would make a recommendation that crossed it. 

    The entire reason for the hardline view is to maintain accurate spending guidance. I'm sure you'll agree that every penny of every green category is backed by cash in-hand. In fact, you probably already know all of this, so it's mainly for the benefit of the OP.

    I'm not saying leaving it yellow/overspent is the only option. But I am saying it is an option that is recommended by YNAB themselves and that it requires the least effort.

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