I am helping a person get started with their first, much needed budget. Goodbudget is a solid choice for them because it calculates bi-weekly budget periods (key), is friendly to use and now supports bank sync. (I’m from the EEBA days)
I can’t wrap my head around handling their credit card though. They’re living on the CC float for routine expenses and don’t know it (hence a much needed budget). Additionally, they are in a master’s program and have to carry tuition 8-10 weeks until they receive reimbursement. This will be an ongoing situation for the next year.
One method suggested in the documentation is to separate the recurring debt, tuition and accumulated float, and make that a debt account to pay off over time. Expenses going forward go on the credit card account and are treated normally.
If we were to set it up that way, they would not be able to link and reconcile the credit card account and thus would lose all of the automatic import features. That will be a deal breaker because they are not going from never having budgeted to full manual mode.
I don’t see any reason to separate the different types of transactions on a credit card account into different parts of Goodbudget: Debt and Credit Cards. I’d personally just put all of that credit card’s purchases on that Credit Card account in Goodbudget, whether they’re being paid off right away or over time.
If you want to be able to separate out any routine expenses charged to the credit card so they can be paid off right away rather than carrying them a long time, I’d say make a separate envelope for those. For instance if they sometimes charge a food purchase on the credit card but they really should be paying that off quickly and not carrying it, then they should take that transaction out of an envelope named “CC purchases to payoff ASAP”, or something like that.
The “CC purchases to payoff ASAP” envelope should start at zero, so any purchases assigned to it will make it negative. Then whenever possible, or at least once a month after the CC statement is issued, they should make a credit card payment in the amount of whatever that “CC purchases…” envelope shows in the negative at that time. In Goodbudget they would record that CC payment as an Account Transfer from whichever Bank account over to the Credit Card account, and record Envelope Transfer(s) from whichever budget category or categories as needed to zero out that “CC purchases…” envelope.
Similarly, the envelope for Tuition will also be negative but for longer, up until the reimbursement check arrives and is put in as Income to the Bank account, which would be Filled (or Transferred from Available) to the Tuition envelope to zero it out. And then an Account Transfer would be recorded when the credit card payment is made with that reimbursement money.
"I’d personally just put all of that credit card’s purchases on that Credit Card account in Goodbudget, whether they’re being paid off right away or over time."
Agreed! This is the goal. I do not see any reason to separate the routine expenses from the carried tuition expense because that is the reality for the credit card balance (balance $7400; $200 new charges to be paid off and $7200 tuition waiting for reimbursement). But how do you do that when setting up Goodbudget accounts?
I set up the Visa account as a credit card, I entered the Name, Working to pay off and current balance, because that is the situation. GB changes the account type from a credit card to a debt and does not allow any new charges to be applied.
I shouldn’t need a CC purchases to payoff ASAP envelope. New CC purchases would just be deducted from the Groceries, Gas or Electricity envelope. The Tuition envelope should have a negative balance that rolls over until the reimbursement is recorded.
But I cannot figure out how to do that.
So, I thought of splitting it up. On setup, let GB force the existing Visa balance to a debt account and setting up a ‘new’ Visa for current purchases that will be paid off monthly. However, I anticipate this will not work with auto importing transactions because the account balance will never be correct.