Overspending credit card, turn of automatic movement of money
Is there any way to stop YNAB from moving money to the credit card when a new month start if there are some categories that are overspent with credit? Since the credit card pay cycle is not aligned with the months (what I spend the end of august I have to pay end of September), overspending with credit is not usually actually overspending. This is particularly problematic when I use my credit card to pay bills that I will be reimbursed for. The advantage of this is that I actually do not have to move money from another category and then move it back later, because by the time I have to pay the bill my employer will have paid me back the appropriate amount.
It is really very inconvenient that YNAB decides to "solve" this problem for me by automatically moving money at the beginning of the month (this is to some extent also true for categories that are red at the end of the month, btw). It already has a few times made me think I had more money to budget than I actually had. Is there any way to turn this off? If not, could you please implement this feature, so that I don't have to manually check and move everything back at the beginning of the month? Given the amount of posts I found about people confused about red credit card categories after they paid off their depths I imagine I am not the only one who struggles with this.
You are not the first person to have trouble wrapping your head around the way that YNAB handles credit card spending and where the funds go, and into which categories at which time. You won't be the last person, either, I'm sure, since YNAB doesn't seem to have an issue with this challenge that many of us struggle with.
I'm not sure I totally understand exactly how you are handling it, but I do have a few tips that I have learned to work with in order to deal with a few of these challenges.
Firstly, a better way to handle reimbursements is something that many people have wanted for a long time. It's not here yet. So you have to get a little creative. The smartest thing that I have done is to put all my reimbursements into one category. So all of that spending gets put into a single category. Ideally, YNAB would want you to pre-fund that category "just in case" you don't get refunded by whomever owes you. I, frankly, don't have the funds to prefund reimbursable purchases that are being made on a credit card. SO, the easiest thing to do is to put all of those purchases into a single category marked 'reimbursements' or 'work' or something equally notable that makes sense to you. Then make the purchases into that category only, knowing that it will be over spent, and knowing that that balance will disappear at the end of the month. But when you do get paid by your employer, you will know that the total should equal the over spending balance from last month and any spending for this month combined, and you can apply that directly into the reimbursement category (instead of putting it into To Be Budgeted). When it is there, you simply move whatever shows up green up to the credit card to be paid with your next bill. That is the cleanest way I have found to manage it, and it keeps the math simple, and keeps the money from "disappearing" into somewhere else, which is bad for the budget!
This is mostly a matter of wrapping your mind around how YNAB organizes and categorizes things. A little shift in thinking will help you work around this.
Yes, you're overspent. Any negative category is overspending, so own it.
That said, because these charges on a CC do not need to be paid back for at least 4 weeks, giving you plenty of time to be reimbursed. FYI, the YNAB docs (Temporary Overspending Section) make this harder than it needs to be and skew spending / income reports as well.
1. Categorize all relevant transactions, both outflows and inflows, to a Reimbursement category
2. If the reimbursement category ever turns green (positive balance), move those funds to the CC Payment category. (Click on the Green Available to access the Move Money tool.)
This simple approach covers all the cases, including reimbursement in a later month than the outflow as well as further outflows in that later month. The pending total is easily seen by searching for the Reimbursement category in All accounts.
Hi Salmon Guitar !
Here's an article about what happens when the month rolls over - I think it'll help! :)
When a new month starts, negative amounts are removed from your categories. If it was cash overspending, the negative amount is applied to the new month's To be Budgeted balance. If it was credit overspending, the negative amount will show in your credit card debt balance.
In the new month, you'll need to add funds directly to the Credit Card Payment category to pay back that debt.
Salmon Guitar said:
This allows me to see where I still will receive money, and makes that I do not artificially have to move (often large amounts of money) from other budgets to cover this, and keep track of where I have to move it back when the money comes in. Currently, before the month rolls over, I have to write down all negative categories, so that I can move them back
May I suggest a slightly different process to address these issues?
You do not have to move money for credit-based overspending, so try to utilize the CC as much as possible. If you must use a cash-based account (which I assume to be small amounts, since you said you need your cash elsewhere), you can usually cover the resulting red overspending from the CC Payment category (which typically has money from normal, budgeted purchases). (Tip: paying the statement balance rather than the entire account balance leaves cash in the CC category and still avoids interest.)
If the Reimbursement category ever turns green, that positive amount is the exact amount you need to move -- no need to write down amounts. Furthermore, it always should move to the CC Payment category, so no need to write down "source" categories.
A search for the Reimbursement category in All Accounts will show the pending total owed to you, which I find is sufficient. However, a slight variant can show this total at a glance if you record all reimbursement-related transactions as categorized transfers to a tracking account. The category Activity/Available is simply the change during the month, so don't treat it as something it's not (the cumulative total).
I'm just gonna jump in with my dirty little secret for how I sometimes handle this stuff, and see what kind of opinions I get, if any. Dead last in my accounts list I have one called "Future Income" which is totally imaginary. When I know I have a check in my purse that needs to get to the bank (and into the budget) I put it in there. When I am owed money from someone that will be coming any day, I put it in there. And occasionally, I'll put a large business expense reimbursement we're expecting.
This keeps me from being distracted (and irritated) by yellow categories, and at the same time constantly reminds me that there is "income" there that needs to be reconciled as soon as possible. I have to either remind my friend of the amount she owes me for whatever I picked up for her, bug my husband once AGAIN to get his reimbursements into work, or get my butt to the bank to deposit that cash or money order I can't do on my phone. It also helps me make a note for what amount I'm expecting back from a health insurance claim so I can make sure I don't forget to check up on it if it doesn't arrive.
There have been occasions where the month rolls over and a transaction is in it from the prior month that I haven't been able to officially move yet to a real account. Then I move it forward to the new month and cover the overspending the month before with the new month's money. That's my version of accountability.
So obviously I know this will never be the official line from YNAB or even most of you, but it's my way of working out some of my budget/reimbursement issues. It's risky as I am temporarily departing from reality, but I am so on top of my budget with manual entry and cash flow management that I know I'm not on the edge. And I do this very sparingly. 90% of the time it's empty. But I'd rather keep reminding myself that there is actually something I *do* need to handle or chase down, rather than become desensitized to a bogus yellow warning where I know I didn't really overspend.