YNAB You Need A Budget

[sml97]

I'm trying to figure out how to handle some charges we made to our credit card. The credit card is 0% on purchases for the next year so we made some purchases that we want to pay off over time. They are in several different categories. How do I handle this in my budget? I'm over budget in things like travel and medical and dining (maybe more). When I watched a help video it suggested that you just budget a certain amount to "pay" those categories back over the next few months. But what about my payment to discover? Is that just considered a transfer and so it doesn't affect my budget? Wouldn't it be easier to just lump all these amounts together under the discover card and then budget a payment that we'll make each month? But then I wouldn't have an accurate picture of what I went over in. Any thoughts on this? I have a feeling that I'm just feeling confused b/c I'm still used to thinking of managing my spending based on my checking account balance, rather than my budget. I know I'll get better at this over time-or at least I hope I will!

[los lobos marinos]

Hi sml97 and welcome to the forum!

My suggestion is most likely not recommended, but is probably what I would do.

I would create a debt budget category for the card, enter a negative amount for the new debt and turn the arrow to right in the category balance. This will basically add the money you have spent to your 'Available to Budget' number in the monthly budget header. The card debt budget category could then work like 'Pre-YNAB Debt' as it would have acorresponding negative category balance. You would then enter the monthly amount you are budgeting toward repayment in all subsequent months during the interest free period until the debt is payed down (ie before you start paying interest). You would enter transfer transaction as normal for credit card payments from your checking account.

I think this would work. I think this adds up (although I'm quite new with YNAB) and haven't had a chance yet to test this scenario in my 'test budget'.

If you were going to follow this suggestion, be very, very, careful or it could lead to bad situation if you don't keep track.

[Turf_Hacker]

Los Lobos Marinos' suggestion is exactly what I would have recommended. You essentially "created" money in your budget by going into debt, and budgeting the negative amount to the debt category neatly captures this while giving you a place to budget for the repayment. You would then budget this money to the categories in which you overspent (spent more than you had in the category balance) to eliminate the overspending. I would add that if you already have a Pre-YNAB Debt category for this card, you can use that instead of creating a new category.

Your payments to the credit card are a transfer with no budget category. The spending has already been categorized by either the debt category or your other budget categories, so categorizing the transfer would count this against your budget twice.

Hope this helps!!