I finally reconciled everything between my Savings, Checking, and Credit Card accounts, and then something went wrong.
In my previous budgeting software, whenever a CC transaction was made and I assigned it to a budget envelope, the money automatically transferred to an envelope where the bill was paid from. I thought that was happening here, and when I’d get a double transaction - money moving OUT of my checking account and INTO my CC account, I’d delete one and confirm the other. I don’t now recall which I did which with, but apparently that was wrong anyway.
Now my CC account shows a larger amount than I actually owe (I pay this account off monthly), and my checking account balance is actually about $1200 less than the Goodbudget account shows. AND I can’t find either transaction in the list. AND when I apply the formula bank accounts (checking plus savings) - credit card to both actual and what’s reported in Goodbudget, it doesn’t bear any resemblance to each other. Goodbudget is reporting I have in checking and savings about $800 more than the bank says I do, and the credit card account says I owe about $300 more than I actually do. This is driving me crazy!
I need to know how to deal correctly with these transactions and get them synced up again. I’ve started over at least three times, and it’s exhausting. What should I do now to fix it instead of starting over?
Sounds frustrating! Here’s the fix for today: First, be sure your credit card is structured in GB to be paid off monthly. If it’s a “working to pay off” card, it shows up as a debt (so the total isn’t calculated into your assets - liabilities equation) and you can’t use it for everyday purchases in your envelopes. (You could, but that requires more steps that I won’t go into here)
Next, in the Accounts tab, choose Edit and change the balance of the two accounts to match your actual balances on the day you edit. This will create a single line item in each ledger with the adjustment, correct the account balances, and adjust your Available funds to match.
For the future, a purchase made with a credit card will not move any money into a payment envelope, but the funds will have been accounted for in your Available Balance.
For example, if you have 500 in Savings, 300 in Checking, and a credit card you pay off monthly with a 50 balance, your Available amount will be 750 (500+300-50=750) before you fill any envelopes. Spending 25 more on the credit card changes the Available to 725 because the equation is now (500+300-75=725). When you pay off the card, the Available won’t change because the money is just transferred between Checking and the credit card, so the new equation is (500+225-0=725). That’s why you don’t need a separate envelope to pay off a credit card that direct carry a balance.
I hope that makes sense!
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Made sense as far as it went. I’m not sure what to do to make sure my CC is configured to pay off monthly, as I thought I had done that when I added it, but I don’t seen anywhere to confirm or even check it.
Next question - why aren’t my payments to the CC that does carry a debt reduce the balance in that envelope? Do I just need to reconcile? When I did that, it added the payment to my balance instead of subtracting it.
@cmerzut - Thanks for your questions! So long as your CC is in the ‘Credit Card’ section, then it’s correctly categorized.
When you’re tracking a Credit Card Account that you pay off in full every month, you do not need a corresponding Envelope for its monthly payment. Instead, you’ll record the monthly payment as an Account Transfer, which will not need an Envelope. If you currently have an Envelope for your CC, you can reallocate that money somewhere else.
You do, however, need an Envelope when you’re tracking a Debt Account.
Does this answer your question? Thanks!