Confused About Credit Cards (and Transfers In General)

ajbopp

I've been using Simplifi for a few months now, and it seems I'm still not getting something right. My Spending Plan varies wildly from one day to the next (from a couple hundred dollars available to over $1000, to minus several hundred). I think the problem may lie in how I'm implementing Transfers for credit cards and the mortgage.

I'm using this page to guide me along in how to do transfers, and below is where I think I'm getting messed up.

"When it comes to Recurring Credit Card Payments, these can also be set up the same way by using the built-in Category of "Credit Card Payment" for the Series, or you can use the name of the account that you're making the payment from as the Category of the Series. Regardless, the Ignore from Spending Plan option will be selected by default."

To me this says that when setting up a recurring transfer, I want to put the credit card account in the Account field, and my checking account in the Category field. But when I do that, it seems to operate backwards - When I look at Cash Flow, the balance of my checking account increases, while the debt on the credit card also increses. Plus, you can see by the cards below the graph that the money is flowing in the wrong direction.

If I do the opposite of what I think the paragraph above says, money appears to be flowing in the correct direction, but then I'm uncertain about what to do with the “Ignore in Spending Plan” checkbox. I get that if I include this transfer I'll essentially be counting all my expenses twice. So I choose to Ignore in SP and Reports, as it defaults to.

But then I don't understand why half the transfer is ignored and the other half is not, when I look at the Spending Plan.

Here's how I currently have the series set up.

I've also tried using the Credit Card Payment category, but that results in payments not being reflected on the actual credit card at all.

1. Is the help text that I linked to above correct and I'm misunderstanding it, or is it wrong and needs to be corrected for the cash to flow the correct direction?
2. Why, when I choose Ignore From Spending Plan, does one side of the Transfer not get ignored?
3. What are the consequences of NOT ignoring a transfer? For instance, to make the Amount Available in the SP make sense, I want my mortgage payment to be reflected in the spending plan. That's a healthy chunck of change to simply hand wave away, and Simplifi doesn't seem terribly robust at tracking mortgages. Would I shoot myself in the foot if I choose not to ignore this?

Thanks for any help.

Flopbot

@ajbopp
Hopefully this post might help to clarify a few things. Mind you, it's not official Simplifi doctrine, but this lays out more-or-less how I have my CC's set up and they seem to keep everything working properly - as best I can tell - in the Spending Plan. This method ignores the entire transfer in the Spending Plan but still shows up properly in the all important Pending Balance graph.

Admitedly, I have yet to really focus too heavily on the Available to Spend # so maybe I've just never paid close enough attention. However, as I've used Simplifi longer and keep tweaking things as I learn more, that number does seem to be getting more and more stable.

I personally kind of view the ‘Credit Card Payment’ category as something you use when only one (1) side of the transaction is tracked in Simplifi and the 'Transfer to…' category as something you use if both (2) sides of the transfer are tracked in Simplifi.

DannyB

Hi @ajbopp

Like Chris, I'm also a user and I'll share what my understanding is an how I have my CCs set up in Simplifi.

• All my credit card companys are connected to Simplifi as well as my deposit accounts (checking & savings).
• I don't use the default Credit Card payment option.
• Credit card payments are transfers between my deposit accounts and the credit card company and are ignored in the spending plan and in reports because:
  • All CC transactions are already tracked in my Spending Plan, tracking my CC payments in my Spending Plan would be double counting those expenses.
  • I use CCs to pay most expenses because I receive “rewards” or cash back amounting to 1%-5% and my cash accounts pay .05% (up from .01% not too long ago).
• I don't have my CC payments set up as a recurring series for Spending Plan purposes for the above reasons.
• Exception: If you have an unpaid balance on your CC from previous statement periods and are paying off that outstanding balance I think there is a way to set up a CC as a debt and I believe these payments can be set up as a recurring expenses in your Spending Plan. If this is the case, carrying a balance for some reason, then I would reccomend NOT using that CC for new purchases or payments until the outstanding balance is paid off.

If you have your credit card accounts connected to Simplifi you will want to use “Transfer>*credit card account* as your category on the payment side of the transaction and by default these payments will be ignored from your spending plan and reports. Again this makes sense as these are turly transfers of cash to cover expenses ALREADY accounted for in the Spending Plan.

I think of my credit cards as as a mirror of my checking account. That is with a CC I pay in arrears and with checking I pay in advance. Or I think of my CCs as extesions of my cash accounts. Either way, I don't carry a balance on my CCs paying them off during or at the end of each billing cycle. The only justification for using them at all are the rewards/cash back benifits.

Flopbot

Duh, forgot to include the link to the post. As always, Danny is on top of things!

https://community.simplifimoney.com/discussion/3011/credit-cards-the-spending-plan

Coach Natalie

Hello @ajbopp,

Thanks for posting your inquiry to the Community!

First and foremost, the article you linked above was wrong. Instead of saying “from”, it should have said “to”; this has been corrected. So, if you're setting up a Recurring Linked Transfer, you'd use the payment account for the ‘Account’ field, and the receiving account for the ‘Category’ field.

With that said, if you choose to ignore the Recurring Series from the Spending Plan, the amount won't count against your available to spend funds. This is the ideal method to use for Credit Card Payments if you're also tracking the credit card account and all of the individual charges that take place in Simplifi.

However, you can also choose to include the Series in the Spending Plan to have it count against your available to spend funds. Regardless of whether the Recurring Linked Transfer is set up to be ignored or included, until the payment side is actually linked to a transaction, you'll see both sides of the Transfer in the Spending Plan and they will offset each other. Once the payment side has been linked to a transaction, though, you should then only see that one transaction in the Spending Plan so they will no longer offset each other.

When you ignore a Recurring Linked Transfer Series or individual Linked Transfer transactions from the Spending Plan, it should ignore both sides, so I'm not sure why you're seeing one side ignored and the other side included. I'd suggest fully deleting and recreating the Recurring Series in question to see if doing so helps to clear things up.

Our Product Team is currently working on adding a “Transfers” section to the Spending Plan (please see here). We're not entirely certain how this will look yet, however, I'm personally really hoping that it improves the functionality of Transfers in the Spending Plan in general. We don't have an ETA as of yet, however, once this feature is implemented, we will be updating the Spending Plan article, and I am also going to work on better clarifying how Credit Card Payments (and Recurring Transfers in general) are handled in the Spending Plan. We just need to wait to see how things will work before I move forward with doing so.

It is definitely confusing, and the behavior tends to vary, unfortunately. I submitted a bug ticket a couple of weeks ago because I saw Recurring Linked Transfers in Other Spending; the ticket was not resolved, but I am no longer seeing the issue. 🤷‍♀️

I hope the addition of a ‘Transfers’ section will help us to see more consistency and better functionality with Transfers in the Spending Plan. In the meantime, let us know if you have any questions on how these work and we will do our best to help. Please also let us know how it goes with deleting and recreating that Recurring Series.

-Coach Natalie