I will give up on YNAB if I can't understand credit cards.
Seriously, I am about to give up on YNAB because I can't figure out the credit card function. I pay my card off every month. Why do I have a positive amount in activity? My actual payment was about $2,000 so why is the payment showing only $833.43?
If you click on the activity figure, it will tell you what is going into that number. In general, the activity number is not of great importance, so if that's the only part of credit cards that's confusing, it's safe for you to just ignore it and keep using YNAB.
The activity is the sum of spending and/or payments and/or returns. This is what shows up for me, when I click on activity, for two of my cards:
It looks like the number that shows up in the activity column is the sum of the positive funds that have transferred to available (funded spending) minus any payments made this month (which would subtract from available).
Your screen shot shows the budget view of your credit card. It is showing in the activity column that $833.43 has been assigned to that payment category in the selected month, due to transactions you have entered for that credit card. The Payment column shows the net of that Activity plus the $0 in the Assigned column, meaning that you have $833.43 ready to pay your next bill.
If you want to see past activity, go to that credit card's account register (select it from the column on the very right of your screen, assuming you are NOT on mobile). There you can all the activity on the card (including your prior $2,000 payment). That view will also show the $833.43 available for paying your next bill, up at the top of your screen.
If you haven't yet, it would be worth reviewing the supporting materials on how YNAB handles credit cards.
Your screenshot is telling you that at the moment in time that it was taken, you had $833.43 set aside in your budget to make a future payment to your credit card. The amount in the right hand column does not reflect the amount of a previous payment.
Hey, there! As @jenmas said, right now, it looks like you have $833.43 set aside in your Credit Card Payment category that can go toward a future payment. That money got there through what we call budgeted spending. That is, you made purchases on your credit card, categorized those purchases, and then assigned money to the categories—when you do that, the money will automatically move to your Credit Card Payment category to be set aside for payments.
If you want to see what activity your credit card has already had this month, click on the Activity number as @fuzzballmeows suggested. You'll see all of the transactions that told YNAB you have that $833.43 available.
I just sent you an email to ask if you'd like personalized one-on-one help. I'm happy to look at your budget and answer specific questions over email. :)
So many people struggle with this - you're not alone. And LOTS of people have figured it out, and I know you can too.
So here's what happens when you make a purchase and enter the transaction in YNAB:
When you enter a purchase on a credit card, you assign it to a category, say you spent $50 on groceries.
As long as you have $50 available in your grocery category, YNAB will automatically deduct $50 from the available funds in the grocery category, and move it up to the Credit Card Payment category under the appropriate credit card that you spent it on. You'll see $50 in green next to the credit card (where you currently have $833 in your budget). Each time you make a purchase this happens, the money moves from the category you applied the transaction to up to the credit card payment category, which is how your $833 got there.
When you are ready to make a payment, you simply make the payment and enter the transaction as a transfer between your bank account and your credit card. YNAB will deduct the funds out of the Credit Card Payment category and they will leave you budget. Your account balance (on the left on the budget screen, at the top on the individual account screen in a browser) will show the reflection of the money applied to the credit card account.
The only time you need to add funds directly to the Credit Card Payment category is in the instance of outstanding debt. If you have outstanding debt from prior to beginning YNAB (or spending that you were not able to cover completely) then you need to move funds from Ready To Assign directly to the Credit Card Payment category. Otherwise, all of your payments for your credit card will be automatically calculated according the what you have funded in your budget when you enter the transactions and categorize them.
So if you have paid $2000, but your credit card payment category says you have $833 that has been applied from your budgeted transactions, and you have entered the payment transaction correctly in your budget already, then you likely have applied money directly to the Credit Card Payment category instead of allowing the budget to transfer the money there for you.
This would be a good time to reach out to the help support and double check what you have going on to figure out how to correct the situation. You may be able to move the $833 back into your budget, but to be sure you don't over budget yourself it's probably a good idea to check in with the help support to make sure. Just click the little question mark in the bottom right hand corner of your screen, and you can live chat with someone who can help you get it straightened out.
Hi. I just looked and there are several upcoming FREE webinars for credit card handling. I recommend you sign up. Credit card handling in YNAB is next level awesome. But it does take understanding how it works. I haven’t attended this webinar but I am sure it will be helpful. Here is the week schedule.
This answer might be cheating, but I would use the web version in these instances with the YNAB Toolkit installed. Then you simply need to:
1. Select the credit card category
2. Click 'rectify difference'
3. De-select the credit card category or select another category
Works 99% of the time for me. Granted, understanding how it works under the covers is, I think, valuable to learn so you truly understand what is going on and why.
Honestly, it works so well I'm not sure why YNAB does not have this feature natively. Perhaps the new auto-assign feature has a function for this (I simply have not used auto-assign yet).
You mentioned you pay your credit card balance every month. If you are indeed a payed in full CC user then you might consider converting your credit card accounts to checking accounts, this will bypass all of the CC babysitting performed by YNAB. A lot of us old time users that used the previous desktop version of YNAB have adopted this work around as that is how the older version worked.
I do not like how credit cards are handled by the new YNAB either, it can get real wonky if you overspend a category in cash that had a previous CC purchase and have already paid the credit card off. You would expect the category overspend to turn red but it turns yellow, YNAB assigns that overspend to one or more credit cards. The reason for this is that YNAB prioritizes cash spending over credit spending, this would be OK if YNAB had the fidelity to differentiate transaction order but it does not, it only has a monthly fidelity. By converting them to checking accounts all over spending is red, all under funding is yellow-simple. I like to think of my credit cards as debit cards, I only use them for protection and rewards.
Debt Free Take 2 said:
maybe in T accounts
Hi as a (fellow?) accountant I would say you have to not think of YNAB as an accounting application. There are no debits/credits.
Are you using the web application or the mobile version?
I'm still trying to get my head around this. If a category is at zero, and you use a debit card, why does it show up as yellow/credit debt? It should show as cash debt regardless as whether you used a credit card in the past for that category or not, because you didn't actually add that debt to your credit account, you paid with cash.
A more thorough explanation of my problem with this:
YNAB is "choosing" to cover that cash spending by showing as being covered by credit, when that charge was not actually added to the credit account "in real life" for lack of a better term. If nothing is done about this debt in YNAB, that charge will still show as added to the credit card debt but won't match up with the actual credit card debt. If it's a cash/checking debt, that mismatch would be obvious - you have overspent that amount in cash, and that cash is gone from your checking account. And then if it wasn't covered it would show as a reduction against "ready to assign" for the next month.
I guess I don't see the logic, and I also don't understand the connection between the fact that there had been previous credit spending in the category. If there had not, this would have shown as a red cash debt?
Fuzzball Meows said:
The solution here is really just to move money from other categories to cover the overspending. Then you don't have to worry whether it's cash or credit overspend.
JR This. If you are properly using YNAB according to the budget method you should be covering your overspending as it happens... right away, shortly after or even before you actually spend the money. And one reason you should try to cover it before spending is that if you can't figure out where the money will come from, you still have the option to not spend the money at all.
The point is, my credit card payment isn't due for weeks. I haven't allocated funds yet. The transaction I made had nothing to do with a credit card. It was a simple cash transaction, and I knew I had cash to cover it and because that category was at 0 I expected it would show as a cash transaction (as YNAB support actually said it would). So when it pops up and labels it as credit card overspending, it simply isn't true. I think it's an arbitrary decision for YNAB to pull from the credit card than to pull from future spending. Which if would do if I hadn't made an earlier credit transaction in that category. That is the part I find especially arbitrary. Anyway, it's actually not that big of a deal (😂) I just find it kind of dumb.
after years of using it this is the first time this has happened, so something has changed. I just haven't heard a reasonable explanation of why they are choosing to do it this way
Hi JR ! It sounds like you understand that YNAB prioritizes spending from cash accounts, before chronology when moving money out of a category. This isn't something that has changed, but if you'd like to submit feedback, our product team is all ears!
The way credit cards work in YNAB is that every CC purchase is intended to be backed by cash. You only allocate to your CC Payment category if you're paying down debt.
In your case, you spent money in category X on a credit card. YNAB moved the money from category X to the Credit Card Payment category.
Then, you spent money from category X in cash, and it was more than was available. To align with reality, YNAB realizes that you didn't want to pay off the card yet, so instead of red (cash overspending), category X turns yellow. YNAB also converts that past credit spending that was funded into unfunded credit spending, increasing your debt.
Unless in extreme situations, I'd recommend not ending the month with any negatives, yellow or red. Negatives mean that you're adding debt (credit) or you have less to work with the following month.
Why is this something you do? What's the benefit? Why not pull from another category this month?
An example of why this is problematic is a recent suggestion I saw to someone who had neglected their budget for a while, which was to fund everything in red first, as these are the cash transactions, and at least the yellow transactions will be covered by credit if you can't fund them yet. So I think a lot of people, as I did, have the understanding that checking/cash transactions will be represented in red so as to be able to discern them easily and fund them first.
I'm responding to this (screenshot at bottom of reply), though I know the forum will thread it in a confusing way, so 🙄.
And also this bit you just wrote:
I am standing there contemplating a small purchase. I know I am at zero in that category in YNAB. ... I know I have the money to cover it in checking,
Ok. Easiest things first: when using YNAB with multiple accounts, you have two levels of questions to get through at (or before) POS.
1. Do I have enough money in the category? No? Then determine a *category* (not RTA, present or future) that you can move enough money from.
2. What account can I pay with? This simply looks at where you have money stored. If there's not enough in a certain account, either transfer or use a different payment method.
ETA: don't conflate jobs (budget categories) with account (location) in your decision making process.
Ok, now regarding the fact that you'd rather pull from RTA in the present or future - AH!
Rule 1 is "give every dollar a job." Therefore, there should be no money sitting in RTA unless you just got paid and are sitting down to assign in right now.
But, why not just let RTA go negative and deal with it later?
In order for YNAB to work, there can be no negatives. Anywhere.
I'll deviate from support here and say that for credit overspending there should still be no negatives, because if I intentionally increase credit debt, this is how to do it: Move money from the credit card payment category to cover the credit overspending.
That is what YNAB essentially does at the month turn over anyways.
Just like cash overspending, I really recommend against leaving negatives lying around in the budget. I mean, in a worst case scenario, how else will you easily see that you're about max out your credit limit with scattered negatives? I'd rather see the difference all in one category (which, incidentally, won't go negative unless you send more to the credit card company than is available).
who knows, I may not send my credit card company any money. That's something I determine in the future
Also, that's simply not how YNAB's credit card mechanism works.
If your spending category is funded, YNAB assumes that you intend to pay that credit purchase off.
It may also be helpful to note that the budget page on YNAB has the fidelity of one month. So, the budget page treats any activity within the month as simultaneous, mathematically, and sees that cash spending that's gone is gone. Credit spending that's gone is not gone.
Perhaps it seems a bit complicated for us humans who operate chronologically, but once you know that that's the rule, it's pretty simple. Elegant, even though we can't see the behind the scenes calculations.
I am going to go with an unpopular approach here. It sounds like YNAB is not the right app for you
i have read most (not all) of the posts including your response to many wise longtime YNAB users. Many of those people (I’m looking at you norules and wordtenor) are known for pushing back against YNAB developments. However, they have longtime use of the product and the philosophy.
You have not bought into the fundamentals of YNAB like giving every dollar a job. This has nothing to do with the app’s credit card process.
Your initial post stated you’re ready to give up on YNAB if you can’t figure this out. I believe you actually haven’t given YNAB a try at all. That’s ok. There are many people (myself included) that needed to take several stabs at it because the philosophy is so very different than any other approach. That approach is key to YNAB success, even if you implemented the philosophy with pen and paper.
So I recommend you find something that fits better with your approach or create something in excel. Trying to fit your philosophy into YNAB functionality will only continue to frustrate you.
Move Light Sound Life said:
You know people often accept paradigm shifts while kicking and screaming. 😉
I don't mean this in a bad way, though the phrase is exaggerated. Truly, if two people have differing paradigms, perspectives, etc., one person should never change their mind simply because someone else disagrees.
The disagreement can be a catalyst for examining the components, ideas, and assumptions of each view. I don't understand how someone can change their mind without poking at all the implications. I also don't understand how people can blindly change their mind based on authority that flies in the face of reason or otherwise disconnected emotional appeals.
Luckily, the YNAB forum doesn't have too much of the latter two options, and we most often are able to actually define terms and discuss things usefully. Honestly, the process of defining terms is usually the bulk of any disagreement, though the "why" part is the most interesting.
But I like philosophy.