EOM Credit Card Balancing
Long time YNABer, but always been a little frustrated with how credit cards are handled at the end of each month. I pay in full, but that doesn't always correspond with the first of the month - as far as I'm concerned, if I owe Visa 100 on the 31st then I own 100 on the 1st. But it never seems to work that way in YNAB, so I end up making a transfer from savings into the credit card so I have a zero balance on the 31st. Then I make the reversal on the 1st. There has to be a better way.
I have a problem that is surely related to this - somehow I have a positive balance for the cc under accounts - shouldn't this be negative? I have the same amount in the credit card Available bucket. I'm not sure how to go about fixing this.
Thanks in advance.
First of all, there is no reason to pay off your credit card at the end of the month. If you have a $100 balance and $100 in the payment category at the end of the month then those 2 things will still be true on the first of the month.
you definitely need to reconcile your credit card so it has the correct negative balance. After doing so you will probably need to fix your budget because when the credit card went positive that money was added to ready to assign
I agree there is no reason I should have to do that... but something definitely happens in YNAB on the first that makes things miserable. I'll have to wait until 1/1 to be able to document that.
In the meantime, what is the best way to correct the positive cc balance? If it shows $500, do I make a dummy charge for $1000? Thanks.
Are you talking about the statement balance or the account balance? If you are paying your statement balance, and you have transactions that are not included in your statement balance but you have set aside the funds for in YNAB, then your amount available will always be slightly different. The most important thing for YNAB is to ensure that the credit card account balance and the amount available for payment are the same number but with the opposite signs. In your example, the credit card balance is -$100 and the payment available is +$100. Then, you know that your purchases are backed by cash and you could pay off the card completely at anytime and cease using it if you wished.
So, while you may owe $100 on the 31st, you could owe $125 on the 1st if you make purchases on the 31st or 1st because YNAB tracks your purchases in real time setting aside the money but your credit card statement will not capture that.
I only ever look at the account balance, and I reconcile just about every day and pay the balance once a week. That's another thing that makes it mystifying. Right now my available total budgeted to pay the credit card is positive 900. Somehow my account balance is also showing a positive 900. Must have been something I did, but I'm not sure how to make that a negative again without screwing something else up. Thanks.
Hi, there! I'll echo that it sounds like that erroneous positive balance for your credit card account is likely causing this ongoing confusion.
Check out this guide that talks about the effects of a positive balance on the credit card. One effect is that money will stop automatically moving to the Credit Card Payment category from spending categories until the balance is negative again. This is why you're not seeing your payment category match your account balance as you spend on the credit card.
Your best action is to reconcile the account, letting YNAB know your current cleared balance. To make sure the account balance is negative, when you reach step 4 of the reconciliation process, be sure to type in a negative amount here:
Once you do that, you'll notice that money will leave your budget—this is the positive amount on the credit card that YNAB thought you had available to assign to categories.
You'll want to take two more steps to get on track:
1. Make adjustments in your budget to account for any overassigning that occurred due to the incorrect credit card balance. This might mean sending money from categories to Ready to Assign to cover a red, negative RTA amount.
2. Make a one-time adjustment to your Credit Card Payment category so that the Available amount is a positive reflection of your negative credit card balance, like in this example:
That will ensure that you have the money you need to pay your card balance in full.
Going forward, as you spend on the credit card and budget for that spending in categories, you should see your Credit Card Payment category's Available amount match your credit card's balance exactly—which means you'll always be ready for your next payment. :)