Main > Help [general questions on Credit/Loan transactions]
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partenov
User
Re:general questions on Credit/Loan transactions
I made experiments here on this topic and the thing that confuses me the most is: When I made transfer from my checking account to my Loan account the expenses total is not increased with the funds transferred. In Income vs Expense chart I do not see this transfer as expense Why it is not there?
My logic says that if I make transfer from a savings/checking account to a savings/checking account then it is not an expense, because I've just moved money. They are not out of my accounts. But, If I make transfer to Loan account or Credit Card account the this is an Expense, because I have transferred it to my Bank or credit institution in reality and it is not my accounts anymore.
11/25/2011 05:46:03
partenov
User
Re:general questions on Credit/Loan transactions
yes, this is what I am thinking as well.
If I make a transfer from my checking account to credit card or Loan account, then I assign an expense category in my checking and do not select any category for the Loan account. In this case the transfer in the loan account is in green ( means positive balance for the current month) and is treated as income. I see that it is taken into account when Income vs Expenses is calculated. Here is a scenario: I transfer $100 to my Loan account. My checking account is decreased with 100$. The loan account is increased with positive $100. Let's say I have other 200$ expenses When I go to Income vs Expenses chart I will see that my Expenses are only $200 ( which is $200+ $100 - $100) The real state is that I have spent $300. The $100 that are in my Loan account does not belong to my balance. They belong to the bank or the person I owe. Am I right?
11/24/2011 02:50:19
support
Administrator
Re:general questions on Credit/Loan transactions
For this issue, it's really up to you on how you want to budget your credit expenses but just make sure that you only pick one option (either budget the charges you spend on your credit card, or budget the monthly payments but not both otherwise you'll be double budgeting the same items). Ideally you'll want to budget the charges you spend on your credit card but if you've stopped using the credit card and have a balance that you are making payments each month on, then you'll want to budget the payments to your credit card.
In the case of budgeting the charges to your credit card, you'll want to make sure that when creating the transfer transaction from your checking account to your credit card either does not have a category assigned to it or assigns a category that is not in your budget. If you are going to budget the payments to your credit card, you'll want to budget your withdrawal from the checking account and not the purchases you make on the credit card.
11/24/2011 01:11:17
partenov
User
general questions on Credit/Loan transactions
I am not quite sure that I understand the transactions that I record for Credit Card or Loan. Ok, here I go.. I have a Credit Card account. When I use it and register an expense transaction I would use one of my budget categories. I will see these transactions as expenses for the current month from my credit card account. So far so good.. Next month I have a payment to this credit card. I would register a transaction for this monthly debt from my checking account, which will include the expenses that I have registered last month when used the credit card plus charges, prior debt, etc. So I will basically double these expenses according my transactions... How to register the transactions from/to my credit card in this case? If I make account transfer from checking to credit account which categories to select? I would select and expense type category for my checking account, but I would not select income/deposit category for my credit card.. Is that correct? I n fact I should not select any category for the credit card? After I finish the transfer transaction I see that I have an expense made to this credit card from my checking account and I see this amount in sub-total for the credit card. The subtotal is in green color which makes it positive balance for the month. This positive balance is then calculated in the Net expenses, which I think is confusing. Please give some clarification on how to effectively use my credit/loan accounts, make transactions with the right categories for transfers, budget, etc
