Debt Accounts

[andrerwolff]

Be able to track any debts/liabilities.

We should be able to keep track of debt(student loans/mortgages/consumer debt). Since payments toward these items doesn't change net worth (other than interest payments/fees) they shouldn't be handled as regular expenses.

For example: I make $800 payment to student loans. $150 of that is interest.

My checking account (and Loans envelope) sees -$800, my student loan principal sees +$650 and there is a net withdrawal to the servicer of $150.

Rather than be depressed that my balance decreased by $800, I can be less depressed that my net worth only decreased by $150.

[mharty3]

So how do you keep track of the interest? The way we do it (which I'm not saying is the best, just what I know). We budget all of our loan payments as expenses. Then enter them as payments to the finance company/bank. Once a month (or so) we check the balance online and enter a transaction via balance adjustment to that account in ynab to account for the payment and the interest.

[andrerwolff]

So I think this might be similar to investment accounts and be mostly separate and keeps track of principal and interest payments. When you pay the company it withdraws the amount from your checking acct, then splits the payment in the loan account between principal and interest as you direct (you'll have to check statements to determine interest/principal etc... ) you could build in some interest formulas to calculate things automatically?

Idk, still a long way from implementing these things, just wanted to start thinking about it as it is important to keep track of.