Budgeting strategy re: credit card payments

Jonelle

I have bills that I pay by credit card. Some of the bills payments are due in June. I pay the bill online before the due date but the credit card payment is due in July. When making the budget entries, is it better to show the billed amounts in June or July? Which is more logical? Or am I overthinking this?

bmciance

You put the budgets in the month the bills are due (June in this case) because that is when they will hit your credit card.  

Hopefully you record all of the charges to your credit card as they happen and the payment is recorded as a transfer from checking to the card.

GeoffG

Jonelle said:

I have bills that I pay by credit card. Some of the bills payments are due in June. I pay the bill online before the due date but the credit card payment is due in July. When making the budget entries, is it better to show the billed amounts in June or July? Which is more logical? Or am I overthinking this?

Paying bills by credit card is no different than paying by checking account. Any purchase you make to checking or credit card is an expense. The checking account or credit card accounts are only conduits to how you paid the expense.

The expense should be budgeted for the month incurred, not when  it was paid. In the case of a credit card, because of the grace period a bill incurred in June would not be paid by credit card until possibly July, but if you had paid by "check" (online) the expense would have been paid when due.

Any bill you want to budget should be setup with a bill reminder and if the bill category is selected to display in the budget, it will show forecast of expense and paid (light green bar graph vs. dark green).

Internet is paid by CC, gas and electric by checking.

bmciance

You put the budgets in the month the bills are due (June in this case) because that is when they will hit your credit card.  

Hopefully you record all of the charges to your credit card as they happen and the payment is recorded as a transfer from checking to the card.

GeoffG

Jonelle said:

I have bills that I pay by credit card. Some of the bills payments are due in June. I pay the bill online before the due date but the credit card payment is due in July. When making the budget entries, is it better to show the billed amounts in June or July? Which is more logical? Or am I overthinking this?

Paying bills by credit card is no different than paying by checking account. Any purchase you make to checking or credit card is an expense. The checking account or credit card accounts are only conduits to how you paid the expense.

The expense should be budgeted for the month incurred, not when  it was paid. In the case of a credit card, because of the grace period a bill incurred in June would not be paid by credit card until possibly July, but if you had paid by "check" (online) the expense would have been paid when due.

Any bill you want to budget should be setup with a bill reminder and if the bill category is selected to display in the budget, it will show forecast of expense and paid (light green bar graph vs. dark green).

Internet is paid by CC, gas and electric by checking.

Chris_QPW

Don't confuse a budget with cash flow.

A budget says "I will spend $100 on clothing a month".

Cash flow says "I will need to make sure there is $534 in my checking account on April 6th to pay the credit card."

Use the projected balance graph to predict cash flow.