Unexpected house repair

FYI - not sure if it matters, but I'm using YNAB classic

 

So, I need a new roof. The expense goes way beyond what I budgeted so far for housing expense. So far, I transferred $5000 from a credit card to my checking account. So now, my credit card is at -5000, and my bank account has more.

However, at this point I only have 1000 budgeted for housing repairs. When I write the check to the roofing company (6000), that's going to put my repairs budget to -5000, but my credit card is already at -5000.... I;m going to have to pay down the credit card, but that isn't going to also take card of my housing budget

I don't think I'm doing this right. How do I handle a large new expense that is mostly going on a credit card?

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    • WordTenor
    • I have the honor to be your obedient servant
    • WordTenor
    • 2 yrs ago
    • Reported - view

    In the card’s pre-YNAB debt category, negative budget -5000. This will add 5000 to ATB, which you can then budget to the house category. 

    Two help docs: 

    https://classic.youneedabudget.com/support/article/managing-new-debt

    https://classic.youneedabudget.com/support/article/paying-off-your-credit-card

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      • Tedy321
      • Gold_Sander.8
      • 4 wk ago
      • Reported - view

      WordTenor Yes, the costs are really high, I think it would be better if you change the store or organization that makes repairs. We and my wife were in this situation, we just found a cheaper place. I can share my experience with one site, that helped us start building the house https://www.costshed.com . My wife and I decided to start repairing an old house that required a lot of investment. Previously, we could not start repairs because we thought that it would be very expensive, but thanks to that site, we were able to see the prices and made repairs. It was very difficult, but repairs always take time and money. Now my wife and I are very happy. good luck, remember the main thing is to start.

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  • I would have worked out the timing better. You pay interest on a credit card cash advance from the moment you draw the funds. I probably would have inquired about a financing option or delayed the cash advance until payment was due. You're probably paying $2.50 to $3.00 per day in interest from the moment you made the draw.

    Many years ago in a previous house, we put a new roof on it. It cost about $4500. The roofing company offered us 0% interest financing for a certain amount of time, with an interest rate lower than a credit card after that. We took the deal and paid it off before we owed a cent in interest. Much cheaper than a cash advance on a credit card.

    Like 1
  • thanks for the help!

     

    in terms of interest, it's not being charged as a cash advance, and I'm getting it interest-free for 12 months (did pay 3% transaction fee) sort of an emergency, otherwise would've planned better (theoretically)

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      • jenmas
      • jenmas
      • 2 yrs ago
      • Reported - view

      MadPink So if you just put it on your credit card, why did you do a transfer from your credit card to your checking account? You could have just done a normal transaction in your credit card and did a negative budget from your Pre-YNAB debt category to your home repair category.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 2 yrs ago
      • Reported - view

      MadPink At 3% that's not so bad. Just make sure you pay it off before the 12 months ends.

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  • unfortunately they don't take credit cards

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    • MadPink You could use a service like Plastiq to write them a check while still using your credit card. It costs 2.5%, which ain't nothin', but if you have a good rewards card that will defray the cost while making it less of a crap deal than using a cash advance.

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      • MadPink
      • Coral_Robot.1
      • 2 yrs ago
      • 1
      • Reported - view

      Banana Pancake I was not familiar with them... I am definitely signing up with them

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  • What are you thinking is 100% right.

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  • Yes, the costs are really high, I think will be better, if u will change the store or organization that makes repairs. We were in this situation, just found somewhere cheaper

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