Credit Card Transactions Budgeted for in the Month Paid or Carried Forward

We payoff our credit card every month and primarily use for our living expenses. Historically, I have just used the total amount due that month as what we budget for. Is there a way that I can assign a transaction to the budget in the month that the credit card bill is due. For example, we had a grocery transaction yesterday for $25.85 on Discover. That amount will show up on March bill due 3/10. Can I budget the 25.85 for March?

Thank you

Hi @rjharriskc:

Great questions, and welcome to the Tiller Community!

My wife and I use a credit card just like you do, but with a twist that, for me, is a little more simple. (I need simple solutions!)

Because the credit card transactions are coming into the Transactions Sheet, we categorize them on the fly. So a grocery transaction on a credit card gets assigned the category, Groceries, in the month the transaction was incurred. These charges then compare to the budget for that month we have established for Groceries. (Which, by the way, has grown in direct proportion to height of our three sons! Yikes.)

So, that’s one side of the three-sided question: what to do with the credit card charges.

The second side is what to do with the credit card payment transactions. If your payment is coming from a linked account, you’ll need to assign that activity to a category, and we use one called, Credit Card Payments. On the Categories sheet, this item is classed as a Transfer, since the activity it aggregates has been assigned elsewhere. This line has zeroes each month as a budget. It is also marked as Hidden. (It is simply a place-holder category for activity.)

The third side of this questions is what to do with the transactions that reports the posting of your credit card payment to your credit card account. When that hits our Transaction Sheet, we assign it the same category as the payment, Credit Card Payments. Because the first amount (the deduction from checking) appears as a payment, and the second (the posting of the payment to the credit card account) as a credit, these payments net out to zero for the month. (That’s why the budget for this category is zero.)

One note: Because the Credit Card Payment category is marked Hidden, you can’t readily see if you’ve made a mistake somewhere. The payments out and the posting of the payments should always net out to zero. (From time to time, filter your transactions by the Category you use for your credit card payments, highlight all the amounts and do a quick check on the sum. It should be zero.)

And if you return an item you purchased with a credit card and receive a credit on your account, when that transaction hits your Transactions sheet, be sure to apply the credit to the same category you used with the original purchase to true up your actual expenses to your budget. In this context of this method, it shouldn’t be handled the same way as a credit card payment, though it may look the same when it hits your Transactions sheet.

That’s one way to handle it. There are others, and here’s a link to another discussion in the community that offers help.

Will this work for you?

All the best.

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Thanks for the explanation, you have validated how I thought it could work. The detail you can track is great, I just have to transition to current transactions vs tracking in arrears like I have been.

Appreciate your input.

Have a great day

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Hi Brad,

Sorry just wanted to get your thoughts that solution seems great if you can pay off the card every month. What do you do if it’s a large expense let’s just say 7K that gets charged to the card. The Credit card charge gets booked to let’s say Home Repair for one Dec, but then I still have to budget for paying that card min payment every month so it can’t really be a transfer, but I technically am dinging my budget twice.

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Hi @mmgalliv:

I am so sorry to hear about your home repair! I hope all is now well! What crazy days we are living in!

There are several approaches to carrying and paying off the credit card debt… Here are a few ideas, There are others. (These are simply methods of tracking the payments in Tiller, not advice for using credit cards, where the best approach is to not use them, due to their astronomically high interest rates…eeeyikes!. But given our circumstances in today’s world, I get it: we are all doing the best we can, right? Onward!)

BTW…if you are able, work to pay more than the minimum payment. Credit card companies laugh at us when we just pay the minimum payment. That approach is designed to make them rich and keep us in debt. Here and here are two posts that describe great Tiller tools for debt reduction.

If you don’t want to use these, but simply track payments to your credit card, try this:

First, when the original charge hits your transactions, create a category called, “No Category” and assign it there. This category should be marked as an expense, but also marked “hidden” in your Categories sheet. No budget is needed. (Use this category only for extremely unusual circumstances like the one you describe. Otherwise you miss the magic and freedom of tracking your money.)

If you have one large charge like the one you mentioned ($7k), and you aren’t adding any more charges to the card (hint), and you want to pay the balance off over time, develop a plan to reduce the balance as quickly as possible, depending on your cash flow by dividing the balance by the number of monthly payments you wish to make to eliminate it. Create a category in your budget exclusively for this item’s payment like “Credit Card Free-At-Last Payment,” and establish the budget equal to your payment plan. This way, you know you’re dedicating a portion of your cash flow every month to getting rid of that debt burden.

Each month, make a payment, and assign the outflow from your cash account to the Free At Last category. When your payment hits the credit card and appears in your transactions, assign that transaction to another category called, “Credit Card Payments.” Make sure this is marked as hidden and is a Transfer type. ( I am assuming your credit card account is a connected account.)

Alternatively, you could budget for the payment plan in the category to which it relates. For example, if the charge was for home repairs, use your payment plan to build the budget in your category for home repairs, and assign your payments there.

In either method, you will only hit your budget once, but keep track of everything. Continue to post all other charges to their appropriate categories as above, and go for it!

Does this help?

All the best to you!

This helps so much I cannot thank you enough! I am happy to have a home but I don’t think it like me very much :slight_smile:

The scenario you stated is spot on it’s just the one major charge no additional charges just trying to pay it off.

I will try using your method again I cannot thank you enough I couldn’t get my head around this one.

Glad to help. (I made some edits to the prior post that include some links to great Tiller tools. Take a look!)