Question about You Need A Budget (YNAB)

March 14, 2015 2:22 PM

I am new to You Need a Budget so I'm trying to get everything set up properly. I have one thing that I don't know what to do with - I have a credit card that, for now, is being paid by someone else. When I set this up as a credit card, YNAB counts it as debt that I should be budgeting for. Really, I want to set it up as an income of $200 monthly. Any input on how to set this up, which type of account? "Cash" or something else? Thanks in advance!
posted by carlypennylane to Work & Money (5 answers total)

You can set accounts as "Off Budget". Have you tried that to see if it does what you want? Are you spending money from it, but it's being paid by someone else? Which part of the flow do you want to budget?
posted by blue_wardrobe at 2:27 PM on March 14, 2015

Response by poster: According to the tutorials I've watched, off-budget accounts aren't part of the budget at all, and I want to assign the $200 each month to a job (takeout, clothes, etc) like the rest of my paycheck. (I am spending the $200 but the credit card is being paid by someone else for now, if that makes sense.)

It seems like "cash" is an option, I just want to make sure I'm not missing a better way to do it, since I'm new to this program.
posted by carlypennylane at 2:34 PM on March 14, 2015

If I understand right, you have a credit card and someone gives you $200/month to pay it? In that case, I'd make the credit card a credit card and record the $200 as income in whatever account the $200 goes into. That it's "for the credit card" is irrelevant to YNAB.

I think the "orthodox" method for handling a situation where they're paying the bill and not handing you $200 would be to have the credit card as a credit card, and then budget -$200 in the appropriate Pre-YNAB Debt category for the credit card (which is automatically created when you add a credit card account). This will add $200 to your available to budget, which you can then budget. When the bill gets paid, record it as inflow in the credit card account and budget it to the pre-YNAB debt category, wiping out the debt.
posted by hoyland at 2:35 PM on March 14, 2015

Is there currently a ($200+) balance on the card that you're paying down, with help from the other person? That would be non-zero pre-YNAB debt. Then you need to budget towards paying off the pre-YNAB debt category. If the card came in with a balance of zero (or has become zero), you can hide that category in your budget.

If you're getting a check or cash to pay the card, that's income on your (probably) checking account, then you need to do a transfer transaction for paying off the credit card. If the card is being paid directly without touching your other accounts, then it's income on the credit card without a transfer.

Either way, it's income. It increases your "available to budget" amount to let you pay off the pre-YNAB debt category for the card. The confusing thing is that it's just a coincidence if the balance on the card and the amount in the pre-YNAB debt category are the same or similar.
posted by supercres at 4:43 PM on March 14, 2015 [1 favorite]

YNAB has extensive, very helpful forums. If you want the semi-official best way to handle this, that's probably the best place to add, although I know a lot of Mefites are YNAB users.

That said, in YNAB, what matters is your category balances, not the accounts you use. If you're spending on a credit card with a zero balance at the start of each month, then spend on it, categorised appropriately and when the cash comes in to pay off your card, treat that as an inflow onto that card.

YNAB will automatically treat credit cards as 'Pre -YNAB debt', assuming they have a balance when you start using YNAB. But that balance can be zero, and you can treat it like any other account in terms of tracking spending to and from it.
posted by Happy Dave at 12:49 PM on March 15, 2015