YNAB You Need A Budget

[xuan]

A couple days ago, I ran into this situation that I wasn't sure how to address:

I received a couple gift cards as a good-luck-farewell gift from family and friends. For simplicity, let's say that I had a $20 GC for a store. I spent $50, used the $20 GC, and paid the remaining $30 with a credit card. To make things more complicated, there were split transactions on the $50 purchase. How would you track this on YNAB?

[TLBauer]

One way to handle this is to create a register account for "Gift Cards".

When you receive a gift card, make an entry in this register account for the amount of the gift card as an inflow with a category of "income available this month." This makes the money available on your budget page. Apply this budget amount to the category for which you plan to spend the gift card.

When you make your purchase enter it in the gift card register account as an outflow up to the amount of the gift card.

In the example that you cite, you have a gift card for $20, but you spent $50 and placed the balance on your credit card. I have attached a picture of how you can post this as a single split transaction from within the gift card register account. I think it is pretty self-explanatory (one picture worth 1,000 words) ... but if you have any questions about it, please feel free to "shout out."

[mozzie61]

Thanks Terry for your clear explanation - yes the picture is worth a thousand words. I had a similar question brewing, but now I don't have to ask it .

[ScotDLange]

I don't really have any interest in keeping track of the gift card balances, so I just use a split transaction with an inflow (usually categorized as income) for the amount that came from the gift card. To get sales tax to work, the receipt is inserted as if the gift card wasn't used and then the inflow is added after sales tax is distributed.

[xuan]

Thanks! I'll try out the GC account; it's a bit strange budgeting the gift card into the categories I think I'll be using it in...but I'll try it out and see how it works.

[jwsteele]

A couple days ago, I ran into this situation that I wasn't sure how to address:

I received a couple gift cards as a good-luck-farewell gift from family and friends. For simplicity, let's say that I had a $20 GC for a store. I spent $50, used the $20 GC, and paid the remaining $30 with a credit card. To make things more complicated, there were split transactions on the $50 purchase. How would you track this on YNAB?

Just enter, record and categorize the $30 expense.
Tracking gift cards seems like crazy extra work to me.
The gift cards is a gift, not a trackable expense.

If someone gave you $20 cash and you spent it, there is no reason to track it. Same for the gift card. It doesn't need to show up in your YNAB.

[Patzer]

A couple days ago, I ran into this situation that I wasn't sure how to address:

I received a couple gift cards as a good-luck-farewell gift from family and friends. For simplicity, let's say that I had a $20 GC for a store. I spent $50, used the $20 GC, and paid the remaining $30 with a credit card. To make things more complicated, there were split transactions on the $50 purchase. How would you track this on YNAB?

Just enter, record and categorize the $30 expense.
Tracking gift cards seems like crazy extra work to me.
The gift cards is a gift, not a trackable expense.

If someone gave you $20 cash and you spent it, there is no reason to track it. Same for the gift card. It doesn't need to show up in your YNAB.

That's a matter of attitude and preference. When you have a budget, things might look different. Paying attention to the small amounts can add up.

Taking the example of $20: If someone gave me $20, I would record it in YNAB as income and budget it to whatever category needs it most. Right now, that would be Auto:Car Replacement, because that category got drained after the uninsured motorist ran into the car my daughter was driving. This is very simple if I receive $20 cash.

Now, suppose I receive a $20 gift card good only at Walmart. How do I deal with it?

I could run out and spend $20 more at Walmart than I otherwise would, which is what Walmart would like me to do. I spend $20 more, and am not in a better financial position.

I could go on my normal shopping trip, use the gift card, and record $20 less expense than I really had. That's the above-quoted suggestion, and it doesn't get the money to my Car Replacement category.

I could set up an account to track the gift card and call it $20 income. That gets the $20 to the budget category I want it in, but soon I have an obsolete account cluttering up my YNAB file.

Or I could do what I really do--record a split transaction with (in the example above) $50 outflow to the appropriate categories and $20 inflow to Income Available This Month, for a net of $30 taken from cash or credit card, however I paid. Then I budget the $20 to Auto:Car Replacement, and the $20 gift card for Walmart has put me $20 closer to buying my next car in late 2017.

The split transaction method I use is appropriate because a) I want a windfall gift card to go toward what's important to me, not additional expenditure; b) I don't expect to have gift cards much, so I don't want to set up an account to track it; and c) there is some doubt that I will actually use the gift card, so I don't recognize it as income until it saves me some cash that I would otherwise have spent.

The gift card account would be more appropriate for someone who regularly buys gift cards to use, or has enough money in gift cards that tracking the balance is a concern.

Either the tracking account or the split transaction method is designed to help the budgeter be more mindful about his/her purchases, and get full value from the gift card instead of just letting it get spent on something that isn't important or (worse) dragging more dollars along with it for a purchase that isn't important enough to make it into the budget.

Even if I were inclined to blow the gift card, I'd play this game and budget the funds to Fun Money. But right now, a $20 or $100 windfall has more important places to go than my Fun Money category.

Patzer

[xuan]

Patzer, I like your suggestion much much much better. I wanted to avoid creating GC accounts (because I really don't get GCs that much), yet I still want to track my spending. Your solution works like a charm!

[malisab]

[quote="Patzer"]Or I could do what I really do--record a split transaction with (in the example above) $50 outflow to the appropriate categories and $20 inflow to Income Available This Month, for a net of $30 taken from cash or credit card, however I paid. Then I budget the $20 to Auto:Car Replacement, and the $20 gift card for Walmart has put me $20 closer to buying my next car in late 2017.

The split transaction method I use is appropriate because a) I want a windfall gift card to go toward what's important to me, not additional expenditure; b) I don't expect to have gift cards much, so I don't want to set up an account to track it; and c) there is some doubt that I will actually use the gift card, so I don't recognize it as income until it saves me some cash that I would otherwise have spent./quote]

I'm going to quote this into my journal so I can find it. I don't often have gift cards, but I've never been comfortable with what I've done with them. I have some Kohl's giftcards hanging around right now and they make me uncomfortable enough that I've almost spent them just to make them go away. But I'm going to wait until I need to buy something. I'll do this. Thanks.

[lebdavidson2]

Or I could do what I really do--record a split transaction with (in the example above) $50 outflow to the appropriate categories and $20 inflow to Income Available This Month, for a net of $30 taken from cash or credit card, however I paid. Then I budget the $20 to Auto:Car Replacement, and the $20 gift card for Walmart has put me $20 closer to buying my next car in late 2017.

The split transaction method I use is appropriate because a) I want a windfall gift card to go toward what's important to me, not additional expenditure; b) I don't expect to have gift cards much, so I don't want to set up an account to track it; and c) there is some doubt that I will actually use the gift card, so I don't recognize it as income until it saves me some cash that I would otherwise have spent.
Patzer

I got referred to this thread (thanks malisab) when I asked a gift card question. Let's complicate matters:
I received $50 gift card for Amazon (which by default applies gift cards to next purchase)
I spent $10 from category A
I spent $5 from category B
I spent $10 from category C which is awaiting a reimbursement from work.
Now I have $25 still on the card, expenditures from three different categories, and a windfall of $50 in my "indulgences" part of my brain that isn't showing up in YNAB because it never hit any account. What to do??

[ScotDLange]

Create a split transaction containing the three outflows, but also add an inflow of $25 categorized as income so that the net amount is zero. You can put the transaction in any account since the net amount is zero, but you could also create an account just to group similar transactions if you run in to this very often. The other $25 doesn't get recorded until you actually use it.

[Patzer]

Or I could do what I really do--record a split transaction with (in the example above) $50 outflow to the appropriate categories and $20 inflow to Income Available This Month, for a net of $30 taken from cash or credit card, however I paid. Then I budget the $20 to Auto:Car Replacement, and the $20 gift card for Walmart has put me $20 closer to buying my next car in late 2017.

The split transaction method I use is appropriate because a) I want a windfall gift card to go toward what's important to me, not additional expenditure; b) I don't expect to have gift cards much, so I don't want to set up an account to track it; and c) there is some doubt that I will actually use the gift card, so I don't recognize it as income until it saves me some cash that I would otherwise have spent.
Patzer

I got referred to this thread (thanks malisab) when I asked a gift card question. Let's complicate matters:
I received $50 gift card for Amazon (which by default applies gift cards to next purchase)
I spent $10 from category A
I spent $5 from category B
I spent $10 from category C which is awaiting a reimbursement from work.
Now I have $25 still on the card, expenditures from three different categories, and a windfall of $50 in my "indulgences" part of my brain that isn't showing up in YNAB because it never hit any account. What to do??

If I recall correctly from the other thread, you want to use the $50 gift card for something special over and above your budget, but were wrestling with how to track it. Was that you?

Assuming this is the case, there are two reasonable ways to deal with this.

1. Create an Amazon gift card account. Record a $50 inflow categorized as "indulgences" or whatever you call that category. This now shows up in your budget as a remaining balance. When you spend the $25 cited above, use the Amazon gift card account and split the transaction between categories A, B, and C. Your budget is affected appropriately for what you spent, and you still have $50 in the indulgences category.

2. The no-account solution. Record a $0 split transaction, with $25 inflow to the indulgences category and $10, $5, and $10 outflows in categories A, B, and C. This puts $25 into indulgences, but the other $25 is hidden.

Based on what I recall from the other thread, you expect this to happen several times a year and you're confident that you will use the gift cards with regular Amazon purchases. I'm thinking the Gift Card Account method is a better fit for your situation than the zero split method; but you can make either work.

Patzer

[staryla]

Or I could do what I really do--record a split transaction with (in the example above) $50 outflow to the appropriate categories and $20 inflow to Income Available This Month, for a net of $30 taken from cash or credit card, however I paid. Then I budget the $20 to Auto:Car Replacement, and the $20 gift card for Walmart has put me $20 closer to buying my next car in late 2017.

Maybe its because I'm watching the clock on the Friday before a holiday weekend and my brain isn't quite with it. But where do you budget the $20 income to? I can't add income directly to my budget and there will be no corresponding $20 inflow to my checking accounts or credit accounts. I always make those accounts match the 'real world'.

Does Patzer's solution only apply if you have an on-budget 'cash' account that you can add this inflow into?

[staryla]

This will teach me to ask questions when I'm not on a computer with YNAB . I got home and experimented with Patzer's solution and of course it works. I get it now. No cash account needed. Just enter the income as part of the split transaction into whatever account the money came out of.