Hi there,<\/p>\n
I was searching a solution for handling debts with friends in ynab. And I would share my thoughts here, probably it will help You.<\/p>\n
If You think about debts You will find out that there are 2 types of them, regarding if You are the debitor or the creditor.<\/p>\n
Type 1:<\/strong> Type 2:<\/strong> How can this be done in YNAB ? In case 1 I have less money in my pocket than I can spent. The easiest solution would be: Write the debts down on a paper and ignore them in YNAB. The critical situation is the timeframe between both transactions, because the money is out of balance. I cannot make a reconcile in this phase because my spends differ from my accounts.<\/p>\n Solution with categories<\/strong> One week later I give the money back to peter: And the Type 1 case worked also in this way: One week later peter gives the money back to me This worked well for me. But there was a better solution.<\/p>\n Solution with accounts<\/strong> Why was this a better way ? Because on categories You should only having spends. But debts are in fact only money transactions (WHERE IS MY MONEY ?)<\/p>\n So the transfers in YNAB looks like:<\/p>\n Type: Transfer to account \u201edebts for peter\u201c, Account: cash, \u00a0Category: not needed, value: +20$<\/em> One week later: If I take a look the my accounts I can easily see the debts for peter in red. Because it is an on budget account it affects my money directly: I have 20$ more than I can spent because the owner of the 20$ is peter and not me.<\/p>\n Conclusion:<\/strong> This is a type 2 debt because I owe my brother money. But the direction differs: First I get the money, than I give it to my brother. And I give the money to another person than the person from which I\u2019ve got the money.<\/p>\n Lets take a look how this can be handled in YNAB: Because I split the money I will make a Split Transaction:<\/p>\n Payee: Granma, Category: Split, Value: 100$ Thanks for any feedback. Hi there, I was searching a solution for handling debts with friends in ynab. And I would share my thoughts here, probably it will help You. If You think about debts You will find out that there are 2 types of them, regarding if You are the debitor or the creditor. Type 1: I lend […]<\/p>\n","protected":false},"author":1,"featured_media":0,"parent":0,"menu_order":0,"comment_status":"open","ping_status":"open","template":"","meta":{"footnotes":""},"class_list":["post-39","page","type-page","status-publish","hentry"],"_links":{"self":[{"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/pages\/39","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/pages"}],"about":[{"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/types\/page"}],"author":[{"embeddable":true,"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/comments?post=39"}],"version-history":[{"count":7,"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/pages\/39\/revisions"}],"predecessor-version":[{"id":43,"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/pages\/39\/revisions\/43"}],"wp:attachment":[{"href":"https:\/\/portugalcrew.de\/wordpress\/wp-json\/wp\/v2\/media?parent=39"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}
\nI lend money to somebody
\nexample: I am in a restaurant with my friend. He has no money to pay his meal so he asks me if I can give him 20$ to pay the bill.<\/p>\n
\nI borrow money off somebody
\nexample: I am shopping with a friend and want to buy a new album of my favorite artist. Unfortunately I have no money with me so I ask my friend if he can give me 20$ for the cd.<\/p>\n
\nAnd in case 2 I have more money in my pocket than I can spent.<\/p>\n
\nThis is because debts are 2 money transfers, which happens to different times. I give some money to my friend and one week later he (hopefully) will give it back to me. Or I borrow off my friend and next month I will pay them back. So all things are ok then.<\/p>\n
\nMy first solution was creating a new category in YNAB called \u201edebts for peter\u201c. \u00a0When I lend money to peter I put this in this category. But there was one problem: When my friend bought the cd for me there was no money transfer. How could I enter it in YNAB ? The solution was: You can split the action in two sub actions: My friend gives me 20$ and I buy the cd by myself.
\nThe transactions in YNAB are:
\nType: Transaction, Account: Cash, Category: debts for peter, value: +20$
\nType: Transaction, Account: Cash, Category: music, value: -20$<\/em><\/p>\n
\nType: Transaction, Account: Cash, Category: debts for peter, value: -20$<\/em><\/p>\n
\nType: Transaction, Account: Cash, Category: debts for peter, value: -20$<\/em>
\n(because I do not spend anything there is only 1 Transaction)<\/p>\n
\nType: Transaction, Account: Cash, Category: debts for peter, value: +20$<\/em><\/p>\n
\nInstead of a category I created a debt-account. I choosed to make it an on budget account.<\/p>\n
\nNow I can buy the cd because I have enough money:
\nType: Transaction, Account: Cash, Category: music, value: -20$<\/em><\/p>\n
\nType: Transfer to account \u201edebts for peter\u201c, Account: cash, \u00a0Category: not needed, value: -20$<\/em><\/p>\n
\nIn general You can use categories or accounts for handling debts. But accounts are better because categories are for spending purposes only.
\n
\nOne last thing:<\/strong>
\nThis system works even if the transactions are swapped and You have different payees.
\nExample: You grandmother put 100$ on You bank account and say: Merry christmas, 50$ is for You and 50$ is for Your brother.<\/p>\n
\nSplit1: Type: Transaction, Account: mybank, \u00a0Category: Income, value: +50$
\nSplit2: Type: Transfer to account \u201eBrother debts“, Account: mybank, \u00a0Category: Not needed, \u00a0value: +50$<\/em><\/p>\n
\nGreetings, Andy.<\/p>\n","protected":false},"excerpt":{"rendered":"