Credit Card Help!

I have just started using YNAB and my credit card has R46,000 debt. I have budgeted to start bringing this debt balance down each month. I regularly pay for groceries, petrol etc. using this card. However at the start of the month I need to deposit R6000 groceries + R1300 petrol + R300 gifting + R15000 balance reduction into my card to be able to use my card (as my limit is R50 000). So I essentially need to deposit money into my account now to be able to spend and not just at the end of the month to pay off the balance.

I am getting mixed up with transactions - how does this work?  How do I reflect the movement of the money into my credit card and out of my current account? How does this affect my spend in each of the categories?

Would love some help!

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  • Hi Spring Green Pony !

    You'll need to budget for the payment you plan to make towards your outstanding balance. Are you planning to make a total payment of R22,600? If so, you'll want to make sure you have at least that much Available in your credit card category (budget directly towards your credit card category to make up the difference).

    Once you have the money available, enter the payment - this will be a transfer from your Checking account to your Credit Card account.

    Credit card payments need to reflect the flow of cash in your accounts. In most cases, they’ll be entered as transfers (outflows from your checking account and inflows to your credit card account). There are two ways to set them up in your register—depending on whether you enter them or import them directly from your bank.

    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.

    Going forward, as long as you budget for your spending on the credit card, YNAB will move the money for you. For instance, let's say you budget R300 for Dining Out. If you spend R300 on your credit card and categorize it as Dining Out, YNAB will move that R300 from your Dining Out category to your credit card category so those funds are Available to pay your credit card bill.

    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!

    Let me know if you still have questions! :)

    Like 1
      • Spring Green Pony
      • 3 years of YNAB experience
      • Spring_Green_Pony.1
      • 3 yrs ago
      • Reported - view

      Faness  Thanks it makes sense. I guess my challenge is that by moving the money into my credit card and out of my budgeting I lose the ability to track my spend against the categories. So I move say R12000 that will cover all of my planned credit card spend into my credit card (and out of my current account) now I don't know how much of that has been assigned to groceries and how to track whether I am in or out of budget in that category. 

      I am thinking that I  will transfer the money to my credit card in real life but leave it where it is in YNAB. This will allow me to see where the money is allocated as I spend it and at the end of the month on YNAB I can reconcile and reflect the transfer that I did at the beginning of the month to ensure YNAB and real life match. It is a bit of a work around but I am not sure how else to do it. The bonus is here is that any left over or unspent money will go to bringing down my credit card debt (that I can also reflect in YNAB at the end of the month. 

      Will see if I can watch some tutorials again tonight.

      • Dashon
      • Musician
      • dashon
      • 3 yrs ago
      • 1
      • Reported - view

      Spring Green Pony If I'm not mistaken, you don't need to move the money unless you're paying above what you've already spent. So if you move R12000 to the credit card, that's because you've got at least R12000 sitting in your To Be Budgeted, and you don't plan to spend that particular money on this month's bills, groceries, etc, but on previous debt that you're paying. Future credit card transactions are slightly different. If you have R250 in groceries that you've budgeted in one month, it will come out of that category as you spend it on groceries, regardless of method of payment (checking account, credit card, etc). The only difference with a credit card purchase, is that as you spend on a given category (which you categorize as normal, so it will show up in your reports and budgets as normal), it moves that money from the category in your budget to your credit card category, so you know how much you have available to pay that month in total (including what you may have budgeted into the credit card category before). When you say you "lose the ability to track your spend against the categories" that might only be true for previous purchases before you started using YNAB or perhaps before you added the credit card as an account, but that isn't important in trying to figure out how to give your current dollars a job (or even to track future reports against spending). When you go forward, regardless of payment method, if you put the category in properly, it will add it all up properly. 

      Like 1
    • Spring Green Pony Sorry for the confusion! When I said YNAB will move that money for you, it moves the funds to update your Available balances. However, the spending itself still affects your spending category.

      Earlier I said:

      Faness said:
      If you spend R300 on your credit card and categorize it as Dining Out, YNAB will move that R300 from your Dining Out category to your credit card category so those funds are Available to pay your credit card bill.

       Your Dining Out category will show that R300 as spent (so you'll know you spent R300 on Dining Out), but the Available amount will be in your credit card category.

      Does that make sense? There's no work around needed to track where you spent those funds.

      Like 1
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