Credit Card Overspent - except I met my budget
I'm pretty new to YNAB and still figuring things out. For the last two months I've been absolutely delighted with how stress-free this budgeting software is, except...today I noticed my credit card payment situation.
I've seen a couple of posts that seem similar to my problem but couldn't quite parse the answers, so I'm here with a new post.
I use my credit card to pay almost all of my expenses--groceries, medical bills, pet supplies, etc--all things that I have budgeted for. I don't overspend in any of my budgeted categories. I pay the credit card off each month.
I have no credit card debt, so I haven't budgeted a monthly payment to pay down the debt--just budgeted into my normal categories. If I budget the same amount to pay off my credit card, won't that essentially be double-budgeting? I will have budgeted twice the amount of money I need to spend in a month, just so YNAB doesn't think I've overspent on my credit card.
Someone please help me out. I have so far loved YNAB but this is really perplexing me.
It sounds like you didn't account for the initial debt. YNAB doesn't assume you will pay that off, so you'll need to budget for that explicitly in the CC Payment category. (You are correct that budgeted purchases will automatically increase the amount reserved for your payment.)
Budget whatever is needed in order to make the CC Payment Available match the working account balance (as a positive number).
WordTenor That makes sense, but I think what's tripping me up is that the CC bucket seems to be showing an overspend because I didn't pre-budget money to pay the card. Like, if I hadn't budgeted any money for groceries, but spent $100 on groceries anyway.
But I don't want to put an amount into the Budgeted column for my credit card, because the budgeting for those payments is my budget as a whole.
Does that make sense? It's so hard to explain this in writing! :P
Which is exactly what happened for the groceries (and whatever else) you bought before starting YNAB -- aka the starting balance. Those are, by definition, unbudgeted purchases until you budget for them.
Bottom line: if you want this card to have paid-in-full status, you MUST make the amount in the category cover the entire debt.
Until you do, you are riding the CC float, relying on budgeted purchases made in the roughly 4 weeks between statement generation and due date to sufficiently raise the available payment amount. If you don't raise it enough but pay anyway, the Payment category turns red. This indicates some of the money you sent anyway is still earmarked for other uses (categories).
Any red in the budget indicates at least one category no longer has the money it says it does. "Monopoly money", an "infeasible plan", "misleading"... call it whatever you like, but it's not a good way to run your finances unless you know exactly what you're doing.
But I don't want to put an amount into the Budgeted column for my credit card, because the budgeting for those payments is my budget as a whole
Are you saying that if you were to budget enough to achieve PIF status, then you would not be able to budget enough to your other obligations? If so, this is text-book "Riding the CC Float", and you'll have to gradually budget your way out.
...I feel like we're not quite understanding each other. I have no credit card debt. I am caught up to all of my purchases as of two days ago. I just made a payment today. I am still within my budget. There is no debt to pay off.
The theoretical $100 of groceries would be a credit card purchase. I would assign it to the Groceries bucket of my budget. Then, I would pay off the $100 by paying my credit card bill.
The problem is that when I make the credit card payment, YNAB apparently dings me for not having budgeted that $100 for a credit card payment. At least, as far as I can tell.
Looking back at WordTenor 's post, I think what may have happened is that the processing of the payment didn't line up with the end of the month, and I still had a negative balance on my card at the time. I usually pay my bill in the middle of the month. I guess I'll see what happens at the end of April...
If that's the case, though, wouldn't the negative amount on the credit card remain the same month to month--holding steady at $1500? Mine has changed. It's gone from the -$261 I started with, to -$502, and is now, as of today, +$234. I haven't added or subtracted any amount to or from the CC budget bucket but the amount is fluctuating.
I threw some unbudgeted money at the March balance to zero it out for now, and I'm still broadly happy with the way this system works. I'm just confused about how it's handling my credit card.
I think I'm just going to stop following this post and see how things shake out.
Whoops, forgot to turn off @notifications.
This is incredibly rude. I was managing my finances perfectly well before I started using YNAB. I like it for its ease of use, but my first experience on the forums has been pretty unpleasant.
I'm going to have a friend monitor this post for me and let me know if actual YNAB support chimes in, but please believe I'm not sticking my head in the sand: I have a very clear view of my actual financial standing. I'm just confused about a particular element of the software.
When you pay has nothing to do with the month boundaries. The money needs to be in the CC Payment category before you pay, whenever that happens to be. YNAB moves money to the payment category only for budgeted purchases while using YNAB. It is on you to reserve money -- i.e., budget -- to pay off the balance on the card when you started YNAB.
Hi LED_53 !
I hope this message makes it to you!
I wanted to post a quick link to a video explaining how paid in full credit cards work.
If that isn't the issue, we'd be more than happy to take a closer look at things! If you’re up for it, go ahead and enable Support Access for your account. Once you’ve done that, let me know and I can follow up with you via email! :)