Credit Card & Budget Item Doubling Up & General Help
I am new to YNAB and am really confused on the best way to work the budget when dealing with credit card transactions. As an example, let's say I use my credit card to buy $500 for Home Maintenance items. My credit card is linked so it shows up with $500 outflow. I tag the category on that credit card outflow transaction as Home Maintenance.
Now when I look at my Budget in the "Activity" column there is a -$500 in the Home Maintenance Category AND -$500 on my Credit Card Category effectively stating that I have a total of -$1,000 activity doubling the transaction.
I was also wondering if someone could please point me to some detailed training/information on how the items at the top are calculated: To Be Budgeted, Funds For the month, Overspent prior month, Budgeted in current month, Budgeted In Future. I am having a hard time understanding just how much cash I have to work with vs spent vs saved vs not used yet.
I have transactions on some accounts that haven't shown up and it has been a week which seems like a ridiculous lag time. I see a lot of potential with this software but frankly if I can't make sense of how the ins/outs are working and how to effectively manage it then it is useless.
Thanks in advance for the help! Have a great day! 🙂
Have they cleared at the bank?
FWIW, the recommended practice is to enter manually and use import as a backup aid to reconciliation. This obviously avoids the lag for the most part, and many who do this feel they are better engaged. Your call, of course.
I am having a hard time understanding just how much cash I have to work with vs spent vs saved vs not used yet.
The bottom line is the money in the budget equals your cash on hand. (That eliminates what you've spent, of course.) If To Be Budgeted is $0, all your cash is in categories, either in the current or a future month.
The budget IS your spending plan. Shift funds around until the highest priority things are funded.
I find it simplifies things to think of every category as savings. After all, savings is merely delayed spending. "Not used" is identical to saved, which just means you haven't spent it yet. Until then, money is reserved for various purpose in each category.
Overspending in the header is last months cash/red overspending. Any red signifies a serious problem, and YNAB attempts to force a correction by reducing this months To Be Budgeted.
Credit/yellow overspending is only summarized in each account for the current month. As such, it's easy to miss when the month has changed. If your CC has paid-in-full status, overspending will cause the Payment category to be less than the debt (i.e., the account balance).
Mini_M If you're comfortable posting a screenshot of the credit card activity pop-up, we'd be happy to explain further! I can reach out via email too, if you prefer. 😄
To answer your other question, this article walks through how the numbers next to To be Budgeted are calculated. Let me know if you have any questions!
I find this default and mandatory (i.e. can't delete) Credit Card Payments category confusing too. I have already categorized all the in / out transactions on the credit cards and budgeted those individual categories. Why does the Credit Card Payments category make it seem like the total of the transactions on the card have not been budgeted for? Seems like it's trying to double dip.
Also I'm doing the payments as Transfers (what YNAB forces as "Payment"). We just use our credit cards for points / cash back and pay them off each month so we just treat them as another account that we transfer money to, we don't carry any debt or have interest to pay off.
Also maybe of importance is that we're starting fresh in the YNAB web interface as of Aug 1st so maybe the negative starting balance of the credit card at the start of the month contributes to the unbudgeted amount? Though that does not match the negative starting balance (1,247.15) of the card as of Aug 1st. Even that should already be taken care of via the $1800 which actually ended up giving us a credit. Confusing...
Gray Unicorn said:
Why does the Credit Card Payments category make it seem like the total of the transactions on the card have not been budgeted for? Seems like it's trying to double dip.
Because not everyone budgets for every purchase in the spending category.
It's not double-dipping if you have budgeted for those purchases, though, because the cash in the category is immediately moved over to the CC Payment category. The amount of cash you have hasn't changed when you swipe the card, so the net impact to the budget needs to be $0 -- decrease the Clothing category, for example, and increase the CC Payment category. (The budget always equals the cash in accounts.)
Gray Unicorn said:
That's counter intuitive. If I spend money on clothing I want it tracked in the Clothing budget.
1. You don't spend money. You incur debt.
2. The purchase is tracked in the Clothing category. You will see that balance decrease. It shows up in spending reports as well.
It's as intuitive as the old-school "cash in envelopes" approach. Your grandparents may have taken cash out of the Clothing envelope and put it in the "Pay off my IOU" envelope. YNAB just does that for you.