How do I record a CC purchase that's actually a transfer (gift card)?
Hello fellow YNAB-ers! My first post and possibly a stupid question, so please go easy on me!
I have an American Express card that I use for purchases and pay off completely as I go along. Yesterday I saw a promotional offer on Amazon for a £6 credit to my account when adding £50 to my gift card balance. I bought the credit with my Amex, and created a new checking account called Amazon Gift Card and made a £50 transfer to it from my Amex. However, it was only after that I realised that this leaves a whole in my budget as my Amex account in YNAB is now showing the purchase *and* the transfer. Which is the best way to record this, I have no plans to spend £50 or so on Amazon yet so I can't buy something and fudge YNAB that way.
I've just hit my second anniversary of using YNAB and thought I knew all I needed to by now!
Thanks in advance.
You bought the gift card with AMEX, that is a transaction against it and should have a category (Gift Card Purchase). You then create a checking account for Amazon gift card and add the balance from the gift card as income to that account and categorize as TBB. Budget the 50 TBB to the category used to make the purchase.
There is no purchase as far as YNAB is concerned, because no money has left the budget. After the dust settles, you will have moved £50 between checking and the new gift card account. This is slightly complicated by the fact you temporarily incur debt during that process, but it's easily fixed.
1. Ensure the new Amazon gift card account is listed under the Budget Account section on the left side of the screen. (Not a Tracking account.)
2. Enter a transfer transaction between Amex and the gift card with no category.
3. Again, you did incur debt, and unfortunately YNAB assumes that won't be paid off. You know differently, so adjust the plan accordingly: budget £50 to the Amex Payment category.
As far as not having a categorized purchase for the gift card I do not agree. I think it is better to reflect reality
Depends on perception. I regard this as merely a change of location of my money. Much like moving from checking to my wallet, the physical form changes, sure, but I can still buy stuff with it. That *view* is described by a transfer. Money did not leave the boundary of the budget, so there was no "spending" (by definition).
The other, equally valid perception is as you describe. You bought a "thing". You did not return it, though, but it is very convenient to view reality as having done so as such in the GC account.
Yes, there is an outflow on the real-world account statement. Either of the above views yield the same outflow in YNAB, just with different Payees.
I wouldn't say either perception of reality is more valid than the other. Glass half empty or half full? Yes. 🙂