reconciled credit card balance doesn't match with budgeted amount for the credit card payment
I had this twice now on different credit cards and I don't understand what is happening:
The credit card balance is correct and reconciled. However, the budgeted amount for the credit card is not correct. When I register the monthly payment which is exactly the reconciled amount, I get a red flag that I don't have budgeted enough money in the credit card category.
I can't identify why there are not sufficient funds transferred to the budget category... and appreciate a lot any help!
This could have happened at any point in time. The typical culprits include not setting up the correct starting balance (for example you set up a starting balance of -$500 but there was a $3 charge that was still pending that was never properly accounted for), statement credits for cashback rewards, making a purchase in one month and a return in the next. You need to adjust the credit card payment category so that it is the same amount as the credit card account balance on the left except the payment category should be positive and the account balance on the left should be negative. If you are able to do this and still meet all of your financial obligations (rent, groceries, fun stuff, etc), you are a paid in full user. If you have to wait until your next paycheck to do this, you are riding the credit card float and ideally you would work your way off of it. If even after your next paychecks you can't get the two balances to match, you are carrying credit card debt. You get rid of it by always making at least the minimum payment and as you are able, you allocate more to the credit card payment category. Never pay more than the amount in the category. Eventually (one hopes), the two balances come in sync and you are a paid in full credit card user.Reply
I don't know if I am explaining it properly :) I pay my credit card in full each month. Since that budget item doesn't ever seem to match the account balance, anytime I go in I basically have to check and see what my budget account is and then manually adjust what I am budgeting to the credit card. The way the credit card explanation reads, I shouldn't have to do that because it should adjust automatically.Reply
Jen L. said:
because it should adjust automatically.
It should adjust automatically if all of your spending is budgeted. So here's a tricky thing by all of your spending, I mean all, even if it is a cash transaction that turns a category overspent. Let's say your grocery category has $40 in it and you use your credit card to spend $30. That $30 is now reallocated to your credit card payment category and all is well. But let's say tomorrow you go back to the store and spend $15 using cash. The category only had $10 left. YNAB prioritizes the cash account over the credit card account, and now your credit card payment category is going to be off by $5 because you had overspending in a category. If you move $5 into the grocery category from some other category, it will balance itself out.Reply