Yet another CC question
Been using YNAB for a couple of years, and love it. I've never felt I totally understood how CCs work, but it's been reliable in YNAB, so I've just trusted it. This month, however, I was suprised when my autopay (I pay in full every month) was WAY off, completely ruining my budget. Rather that try to figure out what happened, I'd like to make sure it's synched properly going forward.
YNAB shows all the same transactions as shown on the card's web access interface..
With all the transactions showing the same both places:
CC current balance: $2477.80
YNAB: Budgeted: 3,930.54; Available: $0.00
Shouldn't something match here?
If you pay in full every month, and cover any overspending in your categories, then you shouldn't need to budget any money to the credit card. The absolute values of the card balance and the payment amount should be equal. (Payment amount is a bit confusing because it is in the available column, but works differently.)
Does the amount you owe (-2477.80) plus the (positive) payment equal the -543.89 of your working balance on the card?
If it does not, then you either have additional newer transactions that should add up to the -543.89, or your credit card account is not reconciled properly.
If it does, then to fix the overall issue, budget money to the credit card until the amount available for payment is 543.89.
I know you said you don't want to know how the credit card thing works, but to keep the amounts in sync going forward, you really need to understand it, so you know what to look out for and how to fix it before you have !surprise! payments.
The way credit cards work is this: you spend money on the card. You mark the transaction with the category you spent from, as you do with the cash and direct from bank accounts. HOWEVER, the money hasn't left your hands yet, but that money has been spent from that account. So YNAB moves the money from the category to the payment for the credit card. YNAB does this automatical, you don't need to do anything. In the mobile app on Android, it even has a neat pop-up where you can watch this transfer happen. If the category DOESN'T have the money available (i.e., you overspent), then the amount available to pay the card can't come from that category. Ideally, you'd move money to cover that overspending the same month it happens. If you don't, then when the month rolls over that category becomes 0 and you've added credit card debt, which you need to account for by budgeting directly to the credit card. For paid in full users, this is the only case where you should have money budgeted to the credit card, after accounting originally for the card's starting balance.
Thanks everybody for all the replies on this. I do understand how it all works, I just want to make sure that going forward, when my credit card balance is paid in full every month via auto pay from my checking account, everything has already been budgeted for in YNAB, which is how it’s always worked up until this month.
To that end, I have entered a reconciliation transaction so that the cleared balance in the credit card’s YNAB account matches the balance shown by the credit card company, and I’ve budgeted so that amount is also in the available field for that card in the YNAB budget.
William Spencer said:
I just want to make sure that going forward, when my credit card balance is paid in full every month via auto pay from my checking account, everything has already been budgeted for in YNAB,
Just remember, you have to actually look to make sure that the available amount in the credit card payment category actually matches the amount that you are going to pay your credit card. You can't just assume that it matches.