My bank combined my line-of-credit (LOC) debt with my checking account (in order to reduce the amount of interest I’m incurring on the LOC). How should I set up my accounts?
For example, if my LOC is for $10,000 and I’ve used $6000 of the LOC as debt, this would show -$6000, showing I’m overdrawn by $6K. My checking account, if I kept it separate, let’s say has $2000 in it. When my bank combined the accounts, my account would be showing -$4000 (i.e., I’m only $4K overdrawn because I’ve “paid back” a portion of the debt I owe.
Even though your bank has combined your checking and LOC in real life, I would suggest tracking them separately in Goodbudget. You’d keep your Checking Account listed as such, and then track your LOC as a Debt Account with a starting balance set to what you currently owe (6000).
Any withdrawals you make against your LOC can be recorded as a ‘New Charge’ against your LOC Debt Account. Then, you’d record an Income for the same amount to your Checking Account, so your withdrawal is available for you to spend.
There are many different ways of doing things in GB and I personally would not track them separately in GB if indeed your bank combined them into ONE account. My GB mirrors my accounts. So, if my bank account shows a -$4000 then that’s what my GB account will also show. If I’m understanding what you said, it sounds like your bank just absorbed your checking account into your line of credit. So when you make a deposit you’re paying down your debt, when you write a check or make a withdrawal, say to pay your mortgage or buy groceries (usually the purpose of checking accounts), you’re just increasing your debt.
If I were in this situation I would want them to be separate accounts and track them separately. I would be paying into my LOC on a regular basis, preferably weekly, but at least monthly to pay down that debt, and use my checking account for my living expenses. I personally would never use a LOC to pay for living expenses and that kind of sounds like what your bank roped you into… and sadly to their benefit. Just my way of doing things, disregard if you prefer another way.