Handling cash reimbursements for CC transactions

Hi everyone

I paid for two transactions on my credit card:

  1. AirBNB payment of $390. My friend reimbursed $195 to my savings account.
  2. Hotel payment for my Mum of $213. Mum reimbursed $213 to my savings account.

This is how I dealt with the transactions:

  1. AirBNB: Whole credit transaction went to a 'holiday' category. Friends reimbursement also went to the holiday category. I now have $300 in there.
  2. Mum's Hotel: Whole credit transaction went to "money you are owed" category. Mum's reimbursement also went to the "money you are owed" category. I now have $0 in there.

My credit card account is stating $4,100 but my credit card payment category is saying I only have $3,580 to repay. It's also saying I've only had $3,778 since my last credit card payment. I can't figure out how to fix this!

A YNAB page indicates that I may need to manually move the reimbursement amounts from the specific category to the credit card payment category. BUT:

  1. AirBNB: That means I'm being double billed for the transaction because the transaction amount has already reduced the category.
  2. Mum's Hotel: I don't have any money in the category to move. The transaction put it in the negative (-$213), and then mum reimbursed me (+$213) = $0.

Help!

(all the figures are approximate)

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  • If the inflow is in the same month as the outflow, money has already moved to the CC Payment category. In that case, the current gap between Payment category and account balances must have been there for some other reason.

    TBH, this is one reason why I use a dedicated category for reimbursable expenses. When using the Temporary Debt approach in the budget, if the reimbursement category turns green, you need to move those funds. Simple. (This takes care of all the "timing" issues mentioned in the docs.)

    It sounds like Mum's expense & outflow went to a dedicated category. That category isn't green, so funds already moved.

    [EDIT: confirmed -- funds already moved to the CC based on this statement you made: "The transaction put it in the negative (-$213), and then mum reimbursed me (+$213) = $0."]

    You may wish to split the AirBNB outflow between your Holiday category (your portion) and a category for your friend's portion. Inflow their $195 to their category. If it turns green, move the funds to the CC Payment category.

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      • Pat C
      • aiming4ff
      • 2 wk ago
      • Reported - view

      dakinemaui Thanks for your help!

      Correct, the "money you are owed" was my little temporary debt category. I re-categorized the AirBNB holiday by splitting, as you suggested.

      I'm not sure what happened but I had a lot of underspending and overspending in the last year, and this mucked up my credit card category. I deleted a couple of categories so that's probably it ....

      After trying to tidy all the amounts up, it says my credit card is $700 underfunded :(

      I love YNAB and I'm generally pretty confident with the system. But I do wish there was a simpler system for the credit cards, it's the only thing that trips me up!

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    • Pat C The CCs are simple... for budgeted purchases. Unfortunately, it's all too easy to miss credit overspending, especially for late-month purchases after you've already moved onto the new month's budget. I would make a habit of looking back once you're a few days into the new month.

      Unfortunately, in order to restore paid-in-full status, you're going to have to add $700 to the category, possibly over time. Assuming you're paying the statement balance, you're riding the CC float (interest-free at least). Getting back to PIF will restore that bit of cushion.

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      • Pat C
      • aiming4ff
      • 2 wk ago
      • Reported - view

      dakinemaui They are simple if you doing that consistent checking. I think my issue is that I was both reconciled and within budget of all my categories, but had overspent on my credit card for god knows how long, and I had no idea. There was no huge red flags or anything, like there is when you've over-budgeted. My credit card payment little category was even coloured green, even though I had overspent.

      There just needs to be better systems put in place to make it hard, not easy, to overspend on your credit card.

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    • Pat C Once you get your card back to paid-in-full status, you might consider switching to using a checking account to represent it. This will force PIF status -- thus IMPOSSIBLE to grow post-payment debt -- and any missed overspending comes out of the following month's TBB. If you need to float anything on credit, you'd have to temporarily switch back to a real credit account. (Just make a balance transfer from a new account to switch.)

      Recommended practice for reimbursements when operating like this is to pre-fund the reimbursement category by enough to keep it positive.

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  • Pat C said:
    AirBNB: That means I'm being double billed for the transaction because the transaction amount has already reduced the category.

    You incurred debt and you have cash in hand. Your friend was effectively an ATM machine for a withdrawal from the CC. You can think of that cash being budgeted in the Holiday category if you like.

    Another way to look at it: there is no double-billing because the Holiday category was paid-back (via the inflow that was categorized as Holiday).

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      • Pat C
      • aiming4ff
      • 11 days ago
      • Reported - view

      KnitPurlKnit @dakinemaui -  I'll give the checking account version a go and will give an update!

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      • dakinemaui
      • dakinemaui
      • 11 days ago
      • Reported - view

      Pat C Sounds good, I think you'll like the simplicity!

      I just want to emphasize that you need to get the payment category Available to cover the account balance first. (You had earlier mentioned it was short.) The balance transfer payment will then consume those funds.

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      • Pat C
      • aiming4ff
      • 4 days ago
      • Reported - view

      dakinemaui Yep, I had to take out of another sinking fund (sigh) but it's balanced now.

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