CC overspending with no other categories overspent

Hi,

My credit card account is showing overspending (or not enough set aside for payment) but I'm unable to find a corresponding budget category that is overspent or drawing on credit, even after going back over many months.

From what I have been able to find here, if my CC balance becomes positive it can stop acting like a CC account and this can cause some issues. I had a large refund on my credit card back in November that I assigned back to the budget category the original purchase came from. Should I have handled it differently?

Is there a way to get more information about which transactions have had their amounts moved to the credit card account to cover the next payment and which ones have not?

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    • TheTabby
    • Just a common cat trying to budget uncommonly well.
    • TheTabby
    • 1 yr ago
    • 1
    • Reported - view

    Unfortunately there isn't a way to track exactly how this happened, and where the money went.  I don't believe that you handled it wrong, YNAB just handles things oddly sometimes.

    I expect you found the culprit with the large refund in November.   Here's my understanding of what would have happened at that point.  (No, I haven't done it myself to make sure I'm right; I don't want to risk causing issues in my budget, since there's no restore points that I know how to access)

    When you received the refund, it would have added the money to your category, but also subtracted that much from your CC Payment category.  If it was near enough to the end of the month, and your CC balance was low enough, it could have thrown your CC balance positive, and simultaneously put your CC Payment category negative.

    YNAB won't let negative categories roll over into the next month, so the fact that you had a negative CC Payment category - which was correct, since the balance was positive - got wiped out when December rolled over, and then there were problems.

    Honestly I don't know exactly how YNAB handles the minutia of returns on CCs, all I know is that their CC handling is far more fragile than I think makes sense.  I know that there's issues with returns, but only sometimes.  I know that there's definitely issues with the CC balance going positive.  There's also problems with turning in rewards for a statement credit or cash back that gets credited to the CC.  Especially if it gets categorized as TBB.

     

    Personally, I use a workaround where I have my CC set up as a checking account so far as YNAB is concerned.  This makes the things mentioned above behave, but if I ever need to carry a balance because of truly unbudgeted spending - I dunno, the car explodes and I have to put a new engine in - I won't have the stock CC handling's capability of handling CC debt and not making the negative balance subtract form my TBB each month.

    Like 1
    • Khaki Storm
    • YNAB book topics online: https://support.youneedabudget.com/r/q5w48j
    • Khaki_Storm.1
    • 1 yr ago
    • 2
    • Reported - view
    TheTabby said:
    Honestly I don't know exactly how YNAB handles the minutia of returns on CCs, all I know is that their CC handling is far more fragile than I think makes sense. 

     Agreed 100% I had a large return that sent the whole card positive for a month. I couldn't track down how to fix it, the behavior was odd ever time I charged something. I was all the time running in circles, I'd charge something in a category and the cc balance wouldn't budge. I'd fix that manually (don't recommend) and it would stay fixed until the next charge.  It worked it's self out after the balance was neg again and I made a payment. 

    Like 2
  • Hi Gray Projector !

    Here's a quick article on what happens when you have a Positive Balance on a credit card. When there's a positive balance on a credit card, there's no debt to cover when you make new purchases - so funds aren't moved to that category until the card goes back into the negative.

    Depending on your card and category balance when you received the refund, you may need to adjust the category balance. If you didn't do that in November, you can do it now to get things back on track. :)

    Like
    • Hi Faness ,

      Thanks, I had found that, but I'm still struggling to understand how YNAB is handling CC stuff behind the scenes.

      As far as I can tell I haven't ever actually ended up with a positive balance on my credit card, as there has always been sufficient other spending and the occasional refund hasn't happened to land near the end of the month.

      At the moment I'm fixing the issue by manually adding up the transactions on my CC that were not covered by the last payment and making sure to budget enough into the CC account such that the overspending is covered and the available for next payment is correct. Hopefully this will fix the issue going forward and the CC account will start working properly again.

      I've been looking at the month with the large refund (Nov 2018) and I can't get the arithmetic for the Total Activity to work out. See here:

       

      It looks to me like the Return of kr 3790 has been counted twice when calculating the Total Activity - once when working out the Total Spending (= Budgeted Spending) and then again in the Payments & Returns. That doesn't seem right? Am I missing something?

      Like
    • Gray Projector Hey! I'm jumping in here for Faness.  It sounds like we may need to dive a little deeper on this one! If you’re up for it, go ahead and enable Support Access for your account. Once you’ve done that, let me know—and mention whether you’d like to continue the discussion here or via email instead. I can take a look and help you track down that Credit Card discrepancy, and we can go from there! 

      Like
    • Chrissy Hi, done, and we can continue here 🙂

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  • I'm getting more convinced that YNAB is counting the CC refund twice and this is making the amount reserved for next payment incorrect.

    Here is the budget category with the refund for the month of the refund ("Interior Nov 2018"):

    There are only two credit items in this category, one is spending and one is a refund. Combined, -kr 8460 + kr 2790 = -kr 4670 was spent on credit. But YNAB has only recorded -kr 1090,44 of credit spending, and so has only reserved -1090,44 for the next credit card payment.

    Where did 1090,44 come from? If we look at the running balance of the CC account for November we can see the account did temporarily go positive and cease to be a credit account:

     

    From the 12th of Nov to the 21st the balance of the account is positive. When the kr 8460 transaction comes in that is enough to tip the balance negative, the running balance of the account is kr 3579,56.

    So then YNAB takes the -kr 4670 credit spending, looks at the CC account and sees the current balance is +3579,56, and decides it only needs to reserve -4670+3579,56 = -1090,44 for the next credit card payment.

    But that's wrong! The balance of the credit card is not -1090,44, it is -4880,44. YNAB has double counted the kr 3790 refund - once to reduce the total amount of credit spending in the Interior budget category, and then again when deciding how much of the credit spending has to be reserved for the next payment! It should do one or the other, either would be fine, but not both of them!

    The result of this, at the end of the month, is that the total debt on the credit card account is 13880,36 but YNAB has only reserved 10050,76 for the next payment.

    This looks like a bug to me. I think that maybe if I assigned the refund transaction to the Inflow budget category first, and then allocated the amount back to the category the item came from then this would have been avoided.

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    • Hi Gray Projector !

      This was a bit of a whirlwind, but I figured it out. :)

      The issue here is, and you pointed to it in your post, that refund should have been categorized as Inflow: To Be Budgeted.

      We mention it in the Reimbursements Help Doc, but I'll leave the explanation here:

      If you receive the reimbursement (in this case, refund) in a future month or after you've paid off your card, the credit overspending will have been absorbed as debt in your credit card balance. Categorize the deposit as Inflow: To be Budgeted and budget it to your Credit Card Payments category. 

      Since you didn't have any spending in your Renovation category for that month before the reimbursement, the funds were placed directly in that category instead of in To Be Budgeted where you could have then budgeted them to the credit card category where they were needed.

      That refund did affect your budget in two different ways, though. The first way, is by being a refund. When you receive a refund on a card, that's less spending that needs to be budgeted for (since the inflow will cover it). That's why Total Spending is Spending minus any Returns. The second way that return affected your budget, was by creating a positive balance on your credit card - so more funds weren't carried over. 

      I see you've budgeted the difference to the credit card category now, so things are back in sync! There's nothing else you need to do and things should stay on track going forward. :)

      Like
    • Hi Faness

      In this case the "Temporary Overspending" section of the Reimbursements help doc that you have quoted does not apply, as there was no overspending and no debt was created. The original purchase was budgeted for, and in fact paid for on a debit card, so it was never on credit to begin with.

      As such, I don't see why I should then have to manually allocate the refund back to a future credit card payment. I bought something I had budgeted for and then decided it wasn't for me and returned it. I would like to return the money to the same budget category I took it from. If the refund had come in the form of a bank transfer or cash in hand then this would be no issue, and I don't see why it coming in onto my credit card should make a difference.

      I have budgeted the difference back to the credit card now, but I'm not exactly happy about it. It means I have to allocate income to something other than what I had intended to, to cover a debt that I didn't know I had, and that I'm still not convinced is actually real debt or just an accounting error on YNABs part.

      I tried changing the refund transaction category to Inflow and then budgeting it back to the Interiør category. This fixed up the amount reserved for credit card payment to what it should have been in the first place:

      The refund is no longer being counted twice when calculating the total activity, and the total amount reserved for payment actually matches the balance on my credit card for the end of the month.

      Similarly the Interiør category has the same resulting funds available at the end of the month but now shows the correct amount of credit spending:

       

      This fixes the issue with not enough money being reserved for CC payment. But that money had to come from somewhere, and now the total budgeted in November has changed from:

      To: 

      Leading to over budgeting in December:

      Since I don't really want to deal with re-budgeting months that are behind us I changed it back to how it was before.

       

      As far as I can see, what has happened is that YNAB has used a single refund twice to incorrectly reduce the amount of money reserved for CC payment, resulting in that amount being lower than it should be. This resulted in us having more money available to be budgeted than we actually did, leading us to overbudget and overspend, creating debt that we could not easily see that we had until now, about 4 months later.

      One way to work around this issue appears to be to always allocate refunds / reimbursements to Inflow and then allocate them via budgeting to their appropriate categories. I'll be doing that in the future.

      I would really advise the YNAB developers to have a look into this, as I'm still pretty sure there is an error in the way the refund was used twice in a calculation. If nothing else, the UI should have better guidance for users about how to allocate refunds properly, and to surface any created debt with strong indicators.

      Like 1
    • Gray Projector I'm slightly confused by this "The original purchase was budgeted for, and in fact paid for on a debit card, so it was never on credit to begin with". When refunding a purchase that wasn't originally recorded in your credit card account in YNAB, it should be categorized as Inflow: To Be Budgeted, because there is no spending to offset. Categorizing the refund to the Renovations category misplaced those funds when they were needed in the credit card category. 

      Refunds or reimbursements of spending in the same month, should be categorized back to the spending category. Refunds or reimbursements received in a later month for spending in a previous month, should be categorized as Inflow: To Be Budgeted. 

      Like
    • Faness From now on I will categorize all refunds / reimbursements / friends paying me back for coffee as Inflow, to be safe, even though I don't think it makes sense and I would much rather tag that income directly as being earmarked for the same category that the expense came from.

      I don't usually pay that much attention to whether something lands on one month or the next. My credit card bill isn't aligned to the end of the month, my salary isn't, and most of my bills aren't. That I need to take extra care if a refund arrives near the end of the month and handle it differently is, to me, an indication that YNAB isn't handling refunds and / or credit cards in a particularly robust way.

      If it is super important to YNAB that refunds be allocated to Inflow so that the credit card payment calculations don't break, maybe YNAB should warn the user when they allocate a refund directly to a category?

      Like 1
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 1 yr ago
      • 1
      • Reported - view

      Gray Projector It isn't super-important. It's just a different workflow you have to use when refunds that involve credit card spending crosses the month boundary.

      Why do people act like if they have to budget money directly to the credit card payment category it implies that they've somehow failed morally?

      Like 1
    • bevocat In this particular instance it was super important. My not knowing about the importance of the month boundary and allocating in a way that felt natural led to YNAB fluffing the credit card payment calculations, misrepresenting my available TBB which led to overspending and debt that was hidden behind "all green" budgets for 4 months.

      That's the exact opposite of what I hope to achieve by using YNAB.

      YNAB claims to track credit card spending and reserve money for payment so that you don't have to worry about whether you buy something on credit or not, so long as you have budgeted for it. If I have to remember a mental rule about refunds to credit cards near the turn of the month then I do have to worry about credit card payments.

      If that's the way it, fine, I'll adjust. But I think there are actually bugs here that could be fixed so that YNAB behaves in a way that better matches the mental model users have when dealing with refunds to categories. I'd like to see YNAB get better.

      Like 5
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 1 yr ago
      • 3
      • Reported - view

      Gray Projector YNAB has been wrong regarding the need to pay attention to the credit card payment category. At one point they were telling Pay In Full users they could just hide the category, which was bad advice.

      Like 3
      • adriana01
      • adriana01
      • 1 yr ago
      • 2
      • Reported - view

      Yes, there are way too many things that can happen to be able to ignore this category

      Like 2
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 1 yr ago
      • 2
      • Reported - view

      Gray Projector So would I.

      Like 2
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 1 yr ago
      • Reported - view

      bevocat That's a good question, as I am one of those people.  I have perfect zeroes on about 15 cards other than month one Jan 2016, and a no interest CC loan I budget to monthly which is working great while I still use my card.

      I just don't want to ruin those zeroes and pay a non-debt that way.  It just feels weird.  Keeping my YNAB predictable and tidy helps keep me disciplined to keep it up for another 9 years.  I don't need any weirdness now.

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      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 1 yr ago
      • 2
      • Reported - view

      Annieland So, those are just feelings. The underlying reality is as you know it to be, not adding debt. I'd just encourage you not to let an unusual configuration of electrons on a screen have that much power over your emotions. You're driving your bus.

      Like 2
    • Gray Projector this is so frustrating and has happened to me more than once. It's incredibly frustrating. Glad you're persisting with this point.

      Like
  • Faness said:
    Refunds or reimbursements received in a later month for spending in a previous month, should be categorized as Inflow: To Be Budgeted. 

     This makes absolutely no sense. If I have a Kitchen Reno category and I buy a faucet on October 31 but then realize it is not right for the farmhouse sink I want and return it on November 1, the refund should be to the Kitchen Reno category because otherwise my spending reports will always reflect that I bought that faucet - which I didn't because I returned it for a full refund. The fact that YNAB's credit card handling makes this an arduous process that requires fussing with credit card payment category should not be the reason to do something that makes no logical sense when trying to track how much I am spending on a reno project. It's situations like these where it is glaringly obvious that the credit card handling was thrown together in 2 weeks in order to get this product on the market at the end of 2015 in time for people dealing with their New Year's resolutions to be better about finance.

    Like 10
  • I am with you guys 100%.  I'm in the same mess because I just returned expensive shoes after I paid the last statement.  And then I bought even more expensive shoes.  I don't need that showing up twice in my Shoes & Accessories category.  I've already beat myself up enough!  I'm going to figure out a workaround if it takes me all day.  This is lame.

    Like 1
      • jenmas
      • jenmas
      • 1 yr ago
      • 3
      • Reported - view

      Annieland make the refund to your Shoes category. Manually adjust the credit card payment category so that the available amount is equal to (but opposite sign from) your credit card account balance. Get over discomfort with seeing some activity in the left hand column of your credit card payment category because it doesn't actually matter or imply any sort of judgement about you or your character and being bothered serves no helpful purpose in your budgeting journey.

      Like 3
      • Annieland
      • YNABbing every day since 2009!
      • Annieland
      • 1 yr ago
      • 1
      • Reported - view

      jenmas I know I'm nutty, and I'd do it if I have to.  But I just found my workaround!  I changed the dates of my transactions to the purchase being March 1st and the Payment being March 1st.  It's just a difference of 4 days.  Whenever I've had to change dates I use either the first or last of the month and then just add a memo (Purchased in Feb.).  As of now it fixed all the accounts which showed underfunding (there was more than one, it threw off 2 other cards).  Hopefully this sticks and I don't have trouble reconciling at statement closing.  Thanks though :)

      Like 1
      • jenmas
      • jenmas
      • 1 yr ago
      • 2
      • Reported - view

      Annieland - I know my above sounds a bit harsh but having 0s doesn't mean you were more "right" in the past than you are now to have numbers in that column. Every time I cash out rewards, I end up with having to budget an amount to the credit card payment category in order to make the numbers balance. And the machinations when Target has gift card sales and I spend $270 on my Mastercard but get $300 of gift cards and have to do it as a transfer from my CC to my Gift Card account? That's a super annoying mess. But my available balance is correct in the end and that's what matters.

      Like 2
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 1 yr ago
      • Reported - view

      Annieland So you traded one misrepresentation of reality for another. And without knowing what unintended knock-on effects it could have. I don't know that you actually gained anything with these machinations.

      Like
  • Ok, I'll change it back.

    Like
      • TheTabby
      • Just a common cat trying to budget uncommonly well.
      • TheTabby
      • 1 yr ago
      • 4
      • Reported - view

      Annieland Personally, I liked your solution.  It kept all the number crunching in one month, so YNAB didn't lose it's ever loving brain.  Either way works, you just have to figure out how you want it done so that the end numbers come out right and you trust them.

      Like 4
    • Agent99
    • Working to Get Smart at budgeting, finances and life
    • Agent99.1
    • 11 mths ago
    • 1
    • Reported - view

    I was losing my mind just trying to follow this.  Reconfirms why I stay on YNAB4.  Geesh, what a mess!

    Like 1
    • Agent99 It comes up again and again. It's super confusing. I'm thinking about entering my credit cards as debit cards like others here have done. I hate the credit card payment category (even though I know technically that's how it is... kind of).

      And also, I'd been told to always process refunds as inflow:TBB, but then I was told by YNAB support we can go ahead and enter them directly to the relevant category. Great! Except that now there are instances where that messes everything up. Ugh!

      Like
      • dakinemaui
      • dakinemaui
      • 11 mths ago
      • Reported - view

      Tan Barnacle if your CC has paid-in-full status, there really is no downside to representing it with a checking account. You can always balance-transfer to a credit-based account if you need to finance something down the line.

      FWIW, returns should always go back to the original category. This keeps averages and reports accurate.

      Like
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