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.
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.
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.
Happy to see this question being raised! I think those who have provided answers so far are maybe not understanding the issue. I just came across this problem after finally deciding to try to figure out how to reconcile my AmEx balance with what's in YNAB (it's always seemed to be a bit off, but since AmEx doesn't post running CC balances alongside transaction amounts, it's very hard to reconcile! Argh...)
Jen L. and Juliane Greiner -- I kind of think this might be a bug. Hoping YNAB support will chime in. When I reconcile my AmEx CC account in YNAB, I get the account balance right, but the reconciliation line item doesn't lead to a corresponding increase in my budgeted payment to the CC -- just as you all are saying, I think.
By default, when I reconcile an account, YNAB lists "Inflow: TBB" as the category. But for some reason, it doesn't increase the corresponding payment to CC budget. (I can maybe see the logic here, but in practice this is annoying.) The workaround I've found is to change the category in the reconciliation line item from "Inflow: TBB" to something else. I keep a "stuff I forgot to budget for category" so I just use that. When I change the category, viola, my account balance is corrected AND my payment to CC budget is increased by the reconciliation amount. I then move $ from "Inflow: TBB" to my "stuff I forgot to budget for" just to keep budget balances as they were pre-reconciliation.
Hope this helps. And would be great to hear from YNAB if we're missing something here!
I get this when I transfer from my credit card to another account. I'm open to changing it if there's a cleaner way, but this happens because I use accounts to keep track of IOUs of other people with whom I regularly deal.
For example, I have my friend Bob. He buys coffee beans through me because I have a supplier. When I order coffee, using my card, I pay the supplier and split the transaction: $40 dollars total -- $20 in the coffee budget, and $20 to transfer to "Bob" account (cash account).
Because the $20 to Bob wasn't categorized, my credit card budget needs to increase by $20 as well.
This was not the case in YNAB4, and still looking for a solution to not having to worry about tweaking the credit card budget when I transfer to accounts like Bob.
Sky Blue Battery said:
still looking for a solution to not having to worry about tweaking the credit card budget
The standard offset category approach does not have this issue. After setup, there is zero budget interaction. See the first approach described here:
FYI, the video advice (also in that link) regarding categorization differed from the text. The text is correct -- use the SAME category for both inflow and outflow.
Sky Blue Battery said:
when my friend Bob buys something for me for $14, then he just owes me $6
Record your purchase for what Bob delivered as a split transaction:
Net: $0 (the reality is no money entered/left your accounts)
Split 1: outflow $14 categorized as if you bought it yourself
Split 2: INFLOW $14 categorized to Bob's category (updating his debt to you)