Dealing with Point/Cash rewards
Hi, I read this page and I'm not clear on the best way to handle this.
I'm using YNAB Classic.
We have PC Points... we collect points and then when there are enough I can tell the cashier at my grocery store to use them... my total payment will be reduced by $30 or whatever dollars.
Should I ignore the 'income' as in the flyer miles? This way the amount in the transactions I import as a QFX file will match what I input that I spent.
Should I record it as income? And record the expense before they've reduced my bill? This way the amount that shows up in the transaction I download will not match the amount of the total bill... I'll have to override the downloaded transaction's amount.
Is it more important to see the actual cost of what we are spending on groceries? Is it more important to see the additional income from these points? Or does it not matter so much?
Hi, Violet Device
I agree 100% with what nolesrule says about having your budget reflect reality. I actually collect and use President's Choice points at my grocery store and PetroCan points at the gas station. Some people just use the points and don't enter them in the budget at all, like free spending. I don't like that because it affects my averages.
As I see it, there are two ways to enter them in the budget. Either you enter it in such a way as it reduces the amount spent, or you enter it as income. Both methods are correct, but they appear differently in your reports, so you can choose which one you prefer. I have done both. Right now, I'm implementing some health-related food changes, so I really want to see exactly how much I spend on food without reducing that in the reports, so I've been entering the PC points as income.
Here is a split that reduces the amount spent on the transaction and reduces the amount I spent in this category in the reports. This method will result in my gas spending dipping in the month in question and affect the average over all.
Here is a split that adds the redemption to income and doesn't falsely reduce the amount of groceries I needed to buy. The points show up as a $30 income, which I can budget to a category of my own choosing.
edited to add: the only difference is in which category you add the inflow. Add it to Inflow:tobebudgeted if you want to treat it as income, add it directly to the same category as you are spending from if you want to subtract the amount spent from the single category.
For me that's too far into the weeds. For things like grocery points that can only be used at the grocery store, I just record the $170 expense. I wouldn't track coupon savings, so I consider the reward points like that.
For CC point redemptions, I have those sent to my checking account so I record that as income and budget it accordingly.