Budgeting ahead -> Saving vs Credit card payment

Ok, I have a question about how YNAB handles credit card payments.

I have a lot of debt, and it's obvious I'm not going to repay it all before a few years but I'm paying a bit every month to lower it. Meanwhile, I'm trying to keep interest as low as possible.

Now, to make an example illustrating my question, let's say I just received an extra 1000$ check from a side job this month. I'd like to budget 500$ of that towards debt payment, and 500$ towards a large bill I know is coming up in 3 months. I budget 500$ to the credit card category and 500$ in 3 months to the bill category.

Now YNAB expects me to pay 500$ to the credit card and keep the other 500$ in my checking account standing there until I use it to pay the bill in 3 months. 

But that option makes me lose money in interest. If I actually pay 1000$ to the credit card now, and then charge 500$ to it in 3 months to cover the bill, I will have saved 3 months of interest over 500$! (That 500$ would have saved me interest during three months, instead of sitting in my checking account doing nothing) But then my credit card payment goes into -500$ red overspent which is taken off the To be budget next month and messes up budgeting for the two months in between.

I guess, after reading on this forum and all YNAB help topics, that I should budget 1000$ to the credit card now, and incur a 500$ debt in 3 months, since that is what is "really" happening with my dollars. But that doesn't help me plan my budget... I could track that outside of YNAB, but then what is the point of the budgeting tool? I know that I can afford to  really reimburse only 500$, and have the other 500$ as a "temporary" reimbursement, not budgeted, I would like to be able to distribute my dollars "virtually" to plan my budget, while paying the maximum possible to reduce interest (especially since this was a simplified example, in reality I'd divide this 1000$ between multiple categories).

How should I handle this?


1reply Oldest first
  • Oldest first
  • Newest first
  • Active threads
  • Popular
Like Follow
  • 3 wk agoLast active
  • 1Replies
  • 64Views
  • 2 Following