Budgeting from 1st of the month, CC billing is mid-month... Payment?

Hey there!

I just started using the web app, coming from YNAB 4.  I'm trying to work this out in my brain, having difficulty, and couldn't find an answer here in the forums.

✔️ Old debt on the card - amount I want to pay towards that goes in the Budget column. 

✔️ New credit charges are entered into the CC register and show up under Activity in the Budget. 

✔️ Statement closes on the 15th of the month.  Bill due on the 13th of the following month. 

So...  Now how does the payment work? 

❓ Do I only pay the budgeted amount for old debt + new charges made 1st through 15th?

or

❓ Do I pay the budgeted amount + new charges made 1st through last day of the month, despite them not "closed out"?

Thanks for any insight while I navigate the new app!

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  • The money is reserved, so you may pay up to that amount anytime you wish.

    Your call on that, but most people pay the billed amount on the due date (which you didn't suggest). This is usually able to be automated, reducing effort and chance for error.

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      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      dakinemaui Are you referring to statement balance or minimum payment due when you say "billed amount"?  The former, too much. The latter, of course would get paid on the due date.  
       

      As for "money is reserved" comment - thank you.  Helpful!

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      • dakinemaui
      • dakinemaui
      • 9 mths ago
      • Reported - view

      Beige Octopus By "billed amount", I mean the statement balance, and I had assumed this card has paid-in-full status. (PIF status means the category was money reserved to cover the working account balance.)

      In general, I would suggest paying the smaller of these by the due date:

      * Statement balance

      * Payment category Available amount

      If this amount is not acceptable (below the minimum payment amount), budget to increase the category Available until it will support paying the minimum.

      If you are incurring interest, paying as soon as possible will save a little bit of interest. Making multiple payments as money becomes available is fine.

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      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      dakinemaui I had stated old debt in the original post.  :)  But thank you for the feedback!  Helpful.

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      • dakinemaui
      • dakinemaui
      • 9 mths ago
      • 1
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      Beige Octopus I took it to mean that you had the money now and would budget to the category to reserve funds to pay that old debt (with your next payment). Subsequent responses are relevant to the case where you're going to reduce debt over time. Good luck!

      Like 1
  • Personally I'd have the CC to automatically take the statement balance on the due date. 

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      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      monkeyhanger No can do.  As I said, old debt on the card.  If we were to pay the statement balance, well, we'd need more than YNAB to dig us out.  ;)

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      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
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      monkeyhanger though now I'm curious and going to look into automatic payments.  Maybe there is a way to at least pay the minimum due automatically.  

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      • monkeyhanger
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      • monkeyhanger.1
      • 9 mths ago
      • 2
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      Beige Octopus I'm in the UK so your mileage may vary but there's usually 3 options for autopay:

      • the minimum balance
      • a set amount
      • the statement balance

      And yes, if you can't pay the statement balance at the moment I would pay the amount in your CC payment category on the due date provided it meets the minimum payment. If you want to autopay, you could always set up an autopay to ensure you don't miss a payment and then manually pay any extra you have to minimise the interest charge.

      At the risk of stating the obvious, don't forget that YNAB only moves money to the CC payment category for budgeted purchases. You will need to budget directly to the CC payment category for any old debt. Also, you can only trust that you can afford to send the full CC payment category balance to the CC company if you have no overspending elsewhere in the budget. Good luck.

      Like 2
      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      monkeyhanger Perfect.  Thank you!

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  • If there is old debt on the card, paying the statement balance might not be what the OP wants to pay or can pay.

    As dakinemaui said, it's your call how much you send as long as it doesn't exceed the amount in the Available column of the CC payment category. But most CC with debt on it don't have a grace period for the interest, so you might be better off to send as much as you have reserved.

    Like 2
      • dakinemaui
      • dakinemaui
      • 9 mths ago
      • Reported - view

      Along these lines, I would suggest to pay the smaller of:

      * Statement balance

      * Payment category Available amount

      no later than the due date.

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      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      Ceeses Basically, what I believe you're saying is yes to my second question - all money set aside from the 1st through end of month plus budgeted old debt amount.  I'd take all of that and then pay by the 13th of the following month (due date).  This seems to make the most sense given the lack of grace period.  Didn't realize that, so thank you!

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  • So you are carrying debt on the card? Is it interest incurring?

    And you are also making new purchases on the card?

    If this is the case, my recommendation would be to pay the full amount shown in the CC payment available more frequently. Perhaps anytime you are able to add money to the Budget column for the CC payment. This will reduce the amount of interest paid overall, since new purchases start incurring interest immediately when you are incurring interest on old debt... there is no grace period.

    Like 1
      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      nolesrule Great idea!  In fact, off to do just that right now.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 9 mths ago
      • 1
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      Beige Octopus Once you get to the point where you stop incurring interest, you can just pay the statement balance on the due date with automated payments. But you have to get to that point first.

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      • dakinemaui
      • dakinemaui
      • 9 mths ago
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      The end goal is to have the Payment category Available cover the entire working account balance. If you use the card for budgeted purchases, you will stop incurring interest typically well before you have reached that end goal (paid-in-full status).

      This is called "riding the CC float" and is a natural progression out of debt:

      Interest bearing debt

      No interest debt (riding the float)

      Able to pay the entire debt (using a cc like a debit card, or paid-in-full status)

      Like 3
      • malmomma
      • Beige_Octopus.8
      • 9 mths ago
      • Reported - view

      nolesrule Well, of course!  LOL  I've been using YNAB since the spreadsheet days.  I just was a little unsure how to approach the payment with the new way YNAB has it set up.

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