How to handle a Note Receivable

Ok, here's the scoop:  I loaned  my daughter some money.  And, I borrowed that money from my 401(k). (yes, I know!)  I am trying to find the best way to set this up in YNAB.

My payments on the 401k note are taken directly out of my paycheck.  I have the amortization schedule that is used to determine my principal and interest.  My 401k loan is set up as a tracking account in YNAB to avoid affecting the budget.  I have it pretty well set up to post my principal to the 401k tracking account and the interest I pay to my Interest and Fees category.

I am tracking my daughter's balance in a tracking account as well. When I receive a payment from her (she pays once a quarter), I receive it into my checking account as a transfer to her tracking account and with a posting to the category "Income to be Budgeted".  That much works ok.

The problem is that my daughter has also agreed to pay the interest that I am paying on my note.  Since you cannot affect a category directly from a tracking account, I don't know the best way to move the interest I paid from my Interest and Fees category to the note receivable tracking file at the end of each month. 

Note:  I tried setting her note up as a savings account.  But the balance owing becomes a part of my budget and messes with the "Age of Money" calculations.

Any thoughts?

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  • Terry Bauer said:
    I don't know the best way to move the interest I paid from my Interest and Fees category to the note receivable tracking file at the end of each month

    Record your interest payment as a transfer to the tracking account, updating what she owes. (Her account should have a positive balance.)

    Record her payments as a split transaction. Example, for a $105 payment of which $5 is interest:

    Net (top line): $105

    Split 1: inflow transfer from her account for $100, categorized as TBB

    Split 2: inflow $5 as Interest (not a transfer, since that account tracks the principal).

    Note the cancellation of your earlier interest expense. Basically a refund.

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      • Terry Bauer
      • Providex Programmer
      • tlbauer56
      • 6 mths ago
      • 2
      • Reported - view

      dakinemaui , Thank you for taking the time to reply.  Something you said started a wee flicker in my lightbulb!  I'm going to give it a try and report my findings ...

       

      thanks again!

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