Transfers vs Payments to LOC

I have a Chequing Account and a Personal LOC account both setup in YNAB.  In my budget, I have one item budget category for "LoC Interest" and a few categories for different types of Debt Repayments (each with different goals - ie. Monthly Repayment, Tax Return, etc). 

However, I can't get the system to use my Categories for "LoC Interest" or "Monthly Debt Repayment", "Tax Repayment".

All my income gets deposited into my Chequing Account.  When I make Debt Repayments to the LoC, they are all recorded Payments to the Account, rather than letting me choose Categories - "Monthly Deb Repayment, Tax Repayment". 

Secondly, I'm struggling with the Interest payments.  They are automatically withdrawn from the LoC Account and they get properly recorded as "LoC Interest" in my budget.  But, the money for this is still in my Chequing Account!  I'd like to "Transfer" the money from the Chequing Account to the LoC (without impacting my Budget).  The only option in the system is to enter it as a "Payment to the LoC".  However, then it's lumped in with my actual Repayments and gets double counted.

Is it possible to setup the system to do this?  And / or what am I doing wrong?

Thank you.

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  • Hi Slate Gray Hail !

    When you add a Credit Card or Line of Credit account, YNAB automatically creates a category for it under the Credit Card Payments category group. When budgeting to pay off a past balance for a specific account, you'll need to budget for it in the Credit Card Payments category group. YNAB will then automatically update the Available balance when you make a transfer from a cash account (checking, savings, etc.) to the line of credit.

    Instead of budgeting towards the "Monthly Deb Repayment" category you created, budget towards the Line of Credit category YNAB created for you. That lets YNAB know those funds are Available to pay off the balance.

    As for the interest payments, you'll enter them on your Line of Credit and categorize them to the LoC Interest category you created. As long as you budget for the amount, YNAB will move the money from your LoC Interest category to the Line of Credit category under Credit Card Payments. You'll then enter the transfer to the Line of Credit and YNAB will update the Available balance for that category.

     

    Here are the steps to record a credit card payment yourself:

    • Click on the credit card account in the account list to view your Register.
    • Click Record Payment.
    • Select the date, the account the payment is coming from, enter a memo if you’d like, and (if needed) change the amount. By default, the inflow field is populated with the amount you have set aside for the Payment.
    • Click Save and you’re done! The payment will be reflected in your Credit Card Payment category just as you’d expect. If you have your account set up for Direct Import and this payment imports later, it will automatically match with the one you entered. Easy peasy.

    If you have any questions about importing payments—or any type of transfer—we have answers. To learn more about how credit cards work in YNAB, take a look at our Quick Start Guide to Credit Cards and consider taking our Master Credit Cards with your Budget workshop! :)

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  • Hi,

    I see this is now 8 months old but I have related question. I am set up the same way with my bank account and LOC. I do owe my LOC some money right now and I see how it works to repay it. But what if to avoid some interest charges I temporarily move some money there. I can't figure out how to do that. Do I have the account setup correctly as a credit card type of account on budget or should it be different. My "To Be Budgeted" banner at the top looks very red and large and I don't like that. Thanks for any advice you can give. 

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    • Hi BillP ! No matter what, it's important that YNAB reflects reality and how money is moving between your accounts. Even if the move is temporary, you're making a payment. So it will be handled the same way!

      If you have the account set up as a line of credit/credit card, you'll see a category with the same name under Credit Card Payments category group.

      When To be Budgeted is red and negative, it means you've budgeted more money than you have on hand. Rule One of the YNAB Method is the foundation of your budget—Give Every Dollar A Job. To get back on track, reduce the amounts in your Budgeted column until it is green and $0.00.

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      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 1 yr ago
      • Reported - view

      BillP If you are going to store budget funds in a line of credit, you should set it up in a manner similar to European style overdraft. Follow the instructions in this post:

      https://support.youneedabudget.com/t/q5wlp8

      YNAB has not officially sanctioned this user-created method, but it works better than what they officially recommend.

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    • BillP It's a fair bit of hassle and there's a risk of losing all that money if the bank decides to close the LOC draw facility.

      I wrote a detailed write-up how to do it on Reddit (along the lines of what nolesrule mentioned). In contrast to an overdraft account, you actually care about the "real" debt (excluding the savings you are parking) and probably have to make payments.

      See this:

      https://www.reddit.com/r/ynab/comments/e8kvha/holding_money_in_loc/fad0lrv?context=3

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      • BillP
      • BillP
      • 1 yr ago
      • Reported - view

      Hi @Nicole,  That's not really workable for me. My to be budgeted is at $-6500 so I can't begin to allocate anything for this new month and year. YNAB4 was great at being able to do what I am doing. I will look at setting up accounts like the "European style overdraft" @nolesrule mentioned. 

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    • BillP A negative TBB is a totally different problem. That means you have included money in your spending plan that you cannot spend. (Not a great idea for many reasons.)

      I would NOT setup your budget to park funds in the LOC until you fix the TBB issue.

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      • nolesrule
      • Been waiting 5 years for the Stealing From the Future fix...
      • nolesrule
      • 1 yr ago
      • Reported - view

      dakinemaui Agreed generally, but it may be that funds are already parked in the LOC.

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