How do I register an advance in my salary from my employer?

I received an advance in my salary from my employer. Let's say $600 to make calculations easy. I have to return it in 12 months, so that's $50/month.

I'm not sure what the best method is to register it. I've tried both a line of credit and a liability, but neither convince me completely.

Any ideas?

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  • I forgot to point that my employer deducts the $50 from my future income each month, so I don't even see it coming into my bank account.

  • I'm a minimalist about representing debt in my budget, so I wouldn't do anything. 

    When I started using YNAB almost 7 years ago, I was very obsessive about tracking this and that and this and that and keeping this savings here and that savings there. What I've learned is that each time, I wind up eventually undoing whatever machinations I put in my budget so that I would be clear about "my money" vs. "others' money." Twice in these 7 years I've gone back and re-budgeted multiple years' worth of data where I had created some convoluted budgeting scenario to account for the fact that I "owed" money to myself somehow. I ultimately wind up deciding it's all my money and I don't need to spend time tracking it that way. It's all just money. It all flows through my decision-making process.

    In April, you'll have income that is $600 higher. For 12 months, you'll have income that is $50 lower. In April, you'll budget $600 more than typical. In later months, you'll budget $50 less than typical. 

    That's all it ever needs to be. 

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  • I would put it categories where it is needed, knowing I'd have a little less income in future months. That could be anything from groceries to be spent now, to enlarging the fund for home repairs.

  • Categorize as TBB, as it's clearly income. The main question is what to do in the budget, which depends on whether you need that money now for something. Assuming not, I would stash 11/12th of it in a category and release 1/12 back to TBB each month. (In this case, budget -$50.) 

    Primary advantage is the rest of the budget never sees a difference. (Your paycheck is $50 less, but you release $50 from the category.)

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  • Watch this tutorial. This guy makes great YNAB videos, learned all I know in YNAB with his videos.

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