Simplest way to record LOC payment
I'm obsessing on how to record an LOC payment. I have an automatic transfer from chequing to LOC every 2 weeks. It's a blended payment of principal and interest.
So, the transfer of $250 goes from chequing to LOC and I have it set up as a scheduled transfer. This links and clears correctly with my import from chequing.
When it comes into the LOC, it's recorded as a payment of $140 and a charge directly to interest of $110 (and will slightly change with each payment as the principal increases and interest decreases). YNAB shows a transfer in of $250, but the bank imports a payment of $140.
Am I better to just leave the LOC on manual import and adjust the amounts every 2 weeks?
For my budget, do I budget $140 every 2 weeks for LOC payments and $110 for interest? I had set up $500 a month for LOC payments, but that's not really correct, is it?
Thanks so much. I just want it to be the least amount of work possible because I know that will be more sustainable for me.
Hi Couch Cat !
Is the interest charge listed as a separate transaction or does that $110 just seem to disappear (since the full payment doesn't import)? Are you actively using the LOC or are you budgeting to pay off an older balance?
If you budget $140 towards the LOC and $110 towards interest, you'd then need to enter a transaction for $110 to account for the interest in that account and then enter the payment.
My car loan imported in a similar way. I set it up as a Tracking account and entered a manual adjustment to account for the interest (so, full $250 inflow for the payment then $110 outflow for interest).
You can use either method, but I find manual entry to be much easier in situations like this. :)
Don’t record it as a transfer.
Have a recurring outflow in the budget account for $250, and let the inflow import as whatever the inflow is in the LOC. The LOC should be a tracking account anyway, so the transactions not being linked via a transfer doesn’t matter.
This is actually a situation in which I wouldn’t do it manually. You don’t need to and it will be more efficient not to.