I recently took out a large personal loan (let’s call it £10,000 for the sake of argument) to buy a car. The loan has been created as a new account with my bank and there is a large negative figure which includes all of the expected interest (let’s call it £12,000 - 10,000 loan plus 2,000 interest). The loan amount (£10,000) was transferred into my current account and then I did a bank transfer to the car dealer.
I have done the following in GB:
- Created a new Debt account “Personal Loan” with the full negative balance including interest (£12,000)
- Recorded the loan amount £10,000 as income into my bank account without allocating to any envelopes
- Recorded the transfer to the car dealer as an expense and allocated it to Car maintenance envelope
- Recorded an envelope transfer of £10,000 from Available to Car maintenance
- Created a recurring expense to take money from my bank account and a Car Loan envelope
Have I done it right?
The “Spending by Envelope” report shows a massively inflated figure for Car Maintenance. This envelope it’s meant for things like servicing, MOT and Repairs etc. Should I create an envelope for the car purchase? If so what type?
Anything else I should or shouldn’t have done to handle this scenario?