Credit Card Starting Balance, New Debt and Payments

Hi all! Newbie and first post here! If I can get past setting up and managing my credit card debt in YNAB, I will no longer lose sleep, so please help a gal out! My head is spinning from watching videos and reading posts about CC’s, but most are too simple and don’t address my situation (which isn’t unique for credit card floaters). 

Here’s my situation:

In December, I set up my CC account with a starting balance of $1828.27. Had new spending of $9.13 and a payment of $978.27. In my budget, I allocated $9.13 to the appropriate category, and in my credit card budget, I set aside the difference, which was $969.14. 

Then, I had another expense in December of $123.67, for which I budgeted. However, January began. I understand that CC money doesn’t roll over, but goes into the to be budgeted amount. I hope this is correct thinking! Therefore, in my credit card budget, I set aside that $123.67 to be available for a payment. I then had additional charges for a total of $764.78 for which I budgeted in their appropriate categories. My next payment amount was $1637.00. 

Now, this is where I’m tripping up! I’m not sure how much to put in my credit card budget. I understand how YNAB reassigns dollars when spent on credit cards; the $764.78 moves to my available to spend for the credit card. So, $1637 less the $764.78 already budgeted gives me $872.22 to be budgeted. Remember, I had $123.67 available from December? Do I ADD the $872.22 to the $123.67 to my credit card budget category? Doing this means my new activity is paid, and my starting balance (old debt), is reduced by $995.89. 

I THINK I’m on the right track, but I sure could use some confirmation in this! Any advice would be appreciated! 

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  • All you need to do is budget enough to the credit card payment category so that the Available (aka Payment) balance is equal to the current (negative) balance for that card in the left-hand sidebar.

    Reply Like
      • SingNDance
      • Magenta_Cobra.4
      • 6 mths ago
      • Reported - view

      mamster that only applies if I’m paying off the card though, correct? I don’t plan to do that until my next paycheck, so I can’t  budget anymore than the $1637, which is less than what I owe. 

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  • If you made a purchase on the credit card with budgeted money, the money stays in the CC payment category.  The payment category does not zero out at month changeover and you do not have to budget for it again.

    Reply Like
      • SingNDance
      • Magenta_Cobra.4
      • 6 mths ago
      • Reported - view

      nolesrule Thank you for your reply. Hmmm; in December I budgeted $123.67 for groceries. That appeared green as available to pay in my credit card budget. In January, the $123.67 disappeared from the credit card category. However, in the inspector, I do see $123.67 to be budgeted from December. So you’re saying I don’t put that amount in the budgeted column for the credit card? Based on my numbers, what amount should I enter for my credit card payment? I feel I’m overthinking this! 

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 1
      • Reported - view

      SingNDance It doesn't appear in the January Activity because it was December Activity. But the unused Available amount from December will carry over into January (this is true of all categories with positive balances in the budget).

      The general formula is as follows:

      Current Month Available = Previous Month Available (if > 0) +/- Budgeted this Month +/- Activity this month

      Reply Like 1
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • Reported - view

      SingNDance How much to add to the budget for the CC payment depends on a number of factors.

      By default what you have available is the sum of budgeted purchases remaining on the card and unpaid debt you may have already budgeted for  less payments made.

      What is the current credit card balance? And what is the Credit Card payment available amount?

      Reply Like
      • SingNDance
      • Magenta_Cobra.4
      • 6 mths ago
      • Reported - view

      nolesrule Thank you so much for your help thus far!  I am understanding more of how I budget for credit card payments and see I was mistaken about money available for the CC payment not rolling over.  I'm still muddling through the mess, so if I gave you my credit card balance and available amount, it probably won't make sense! I haven't budgeted for all of my transactions yet......

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 1
      • Reported - view

      SingNDance 

      SingNDance said:
      I haven't budgeted for all of my transactions yet......

       That means you are spending money you don't have and are increasing your credit card debt. YNAB Rule 3 means your categories should never be overspent. The money has to come from somewhere.

      Reply Like 1
      • SingNDance
      • Magenta_Cobra.4
      • 6 mths ago
      • Reported - view

      nolesrule Well, we're trying to get out from under the credit card float. 🙈  As long as we're doing that, wouldn't my To Be Budgeted be negative? Come next Friday, ALL of our credit cards will be paid off, so we're not total financial losers! 😉 It's gonna be a new beginning for us! 😄

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 1
      • Reported - view

      SingNDance

      Your float is the difference between the CC payament available amount and the actual CC balance. As long as you have enough money in the CC payment available to pay the statement balance when you make the payment, you are okay maintaining the float. New budgeted CC purchases over time will replenish the amount reserved for payment.

      You get off the float by budgeting some money to the CC payment category every month, and eventually the payment amount will be for the full balance of the card. At that point you are off the float.

      If you are making unbudgeted purchases, you're in worse shape than just the float. It means you are relying on future income not just to make your credit card payment for past purchases, but also to cover current purchases. That'a great way to go into interest-incurring debt.

      Your TBB should never, ever, ever be negative.

      Reply Like 1
      • SingNDance
      • Magenta_Cobra.4
      • 6 mths ago
      • Reported - view

      nolesrule Ugh.  Well, I'm definitely doing something wrong then.  I have a spreadsheet I maintain for our budget; what's leftover after all bills/expenses, etc. is positive and it balances with my accounts. Honestly, once I payoff this last credit card on the 8th, I think I'm going to make a fresh start without ANY credit card debt.  Should be easy to maintain after that. I still have YNAB classic and can import my transactions there to have a record for reporting for Jan-Feb 2019.

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      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • Reported - view

      SingNDance YNAB should be your spreadsheet. You may not have debt on your Fresh Start (or even now), but the float means you've got more money in your categories than you have in real life. If you reset without debt, you'll find you have less money available for your categories. You might as well just fix it in YNAB.

      Reply Like
      • SingNDance
      • Magenta_Cobra.4
      • 6 mths ago
      • Reported - view

      nolesrule yes, YNAB should be my spreadsheet.  But I've used a spreadsheet for nearly two decades; and no, it isn't truly budeting, but forecasting.  Transitioning to a new form of thinking takes time, so I'm not quite ready to wean myself from the spreadsheet.  Having those numbers is what's kept me sane while setting up nYNAB.  My husband and I get paid bi-monthly and I'm used to forecasting for every two weeks; not by the month or only budgeting when income comes in.  Our salaries are fixed, so forecasting hasn't been a problem.  (Credit card floating is not our norm).  I totally understand YNAB's methods; putting them into practice and having my budget setup properly; different story.  I'll eventually get to using YNAB alone, but in the meantime, the spreadsheet is my life preserver. 😉 Thank you for your help and advice!

      Reply Like
      • nolesrule
      • YNAB4 Evangelist
      • nolesrule
      • 6 mths ago
      • 2
      • Reported - view

      SingNDance Well, you can still use your spreadsheet, but I think you should at least get YNAB configured correctly instead of fighting against it. 😉

      Reply Like 2
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 6 mths ago
      • 1
      • Reported - view

      nolesrule Agreed. If you do the work to get YNAB reflecting reality you will have made a valuable investment of your time so that you have a greater understanding of how the mechanics work, now that you understand the methods.

      Reply Like 1
  • Hi SingNDance ! 

    Positive amounts in your categories (including the Credit Card Payment category) will roll over into the next month. The amount in your Available column is how much you have to send for the credit card payment. 

    Budgeted spending on your credit card will move money to the Credit Card Payment category for you, as part of how credit cards are handled in YNAB.  Any additional dollars you'd like to send to debt will be added to your Budgeted column in the current month. 

    Pay Off Balance by Date goal can help you set a monthly amount to budget for, to pay off your credit card debt by a certain date. The amount will automatically adjust if you are making slower or faster progress!

    Let me know if you still have questions!

    Reply Like
  • nolesrule Nicole at YNAB bevocat mamster I DID IT!! It's nearly 3 am and I've been at it since 5 pm, but I DID IT!  Budget is now completely in balance and all dollars have a job! And no, I didn't start over at all; I stuck with it and figured it out.  Thanks for everyone's encouragement and advice!  I'm going to catch up on some much needed rest now! 😴

    Reply Like 5
      • bevocat
      • Sometimes, It Just Sucks to Be You
      • bevocat
      • 6 mths ago
      • Reported - view

      SingNDance Oh, my goodness, that's commitment! I'm impressed, and you've shown me it's possible to be proud of someone you've never met before! 🙂

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