Why can't I use "to be budgeted" category for credit card purchases?

So, I finally sorted out a issue I was having where the money set aside to pay my credit card balance was not matching the actually balance. Every transacting was recorded and showed both in YNAB and on my CC statement. What I learned is that if you buy something on a CC and you don't have a budgeted line item for it, it will let you use the positive balance you have in "to be budgeted" but it won't actually remove the money from "to be budgeted" and allocate it towards paying off the card. Anyone know what it does this? My work around is to create  a new category "CC to be budgeted" that I just manually have to cover with actual "to be budgeted" funds when I make a CC purchase with it. 

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  • YNAB is a zero-based allocation budget, so you shouldn't leave anything in TBB. It should be allocated to your categories until TBB is zero.

    If you buy something with a credit card, this is how it works:

    1. budget $100 to groceries
    2. spend $75 on credit card categorized to groceries
    3. YNAB moves $75 from grocery category line to credit card payment category, thus reserving $75 for you to pay the cc later.
    4. repeat for all purchases

    Can I assume you are a new YNABer?  Have you checked out the getting started materials or online webinars yet?

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  • Yeah, somewhat new. I am sure this is not the approved method, but the reason I leave money in TBB is that my normal working budget for a month is funded by money made the month prior. So any income that comes in during the current month I hold there till  next month.  Where I budget it all out so I know exactly how much I have.  I am fortunate enough to know what ai make is less than what I will budget, so I have been using TBB for some expense that are kinda unique (like one that I will be reimbursed for shortly) that dont fit a category. Or in this case additional  a spontaneous purchase of a car that will hope to resell for profit. I guess maybe just a misc saving category that I dump TBB funds that I can then pull money out of for next months budget when it comes?

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  • Coral Rhythm

    I know someone with much more experience will chime in shortly, but what most of us do is create a category labeled "Next Month's Income" and store the future month money in that category. Then, when the month comes, move the NMI $$$ into To Be Budgeted. Allocate the money to the (now current) month and you're all set.

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    • Orchid Device 

      Yes I think that's what I am going to try. thanks

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  • Hey Coral Rhythm ! A few quick questions:

    • Was there a Starting Balance on the card when you added it YNAB? Did you budget for it?
    • Do see any credit overspending in your categories?

    If you have an outstanding balance on a credit card when you set it up in YNAB, and you plan to pay that in full, you’ll need to budget for it in the Credit Card Payments category. That’s what lets the budget know you plan to take some of the money you have and use it to pay off that existing balance. Here’s a video explaining how it works.

    And if you don't budget for a purchase, money can't move to the Credit Card Payment category. It sounds like one of those may be the culprit!

    Here are the two best resources to help you understand how the Credit Card Payment category works:

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    • Nicole 

      Thanks. Yes we had a balance and yes we budgeted for it. No we didnt have any overspending in any categories. What's happening is YNAB let's you select TBB as a category when recording a CC transaction, but even if you have the funds in TBB it does not actually take the money from TBB and move it to CC payments. It recognizes you owe an addition $X on the card, but that's all it does. I understand now they may not want you you use TBB, but assumed since they let me that the system would work. It didnt. 

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    • Coral Rhythm Ah, I see. Thank you for those details! You can customize your categories, edit or add a new one, and re-categorize the transaction. Some folks have a general category for random expenses, or others use an existing category that makes the most sense.

      When you categorize an outflow or inflow to a credit card as Inflow: To be Budgeted that will impact the balance of the credit card, but yes—it won't remove dollars from To be Budgeted.

      To be Budgeted is cash you have on hand that you haven't given a job with Rule One. Credit transactions don't impact your To be Budgeted (unless there is a positive balance on the card).

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