Refunds and returns
A refund is the reverse of a purchase. Return 40. Categorize the refund to the same category you spent from — Groceries, in this case. Budget Bandit nets it against that month’s spending in that category:- The category’s Available rises back by the refund amount.
- The amount reserved in the card’s Payment category falls by the same amount, because there is now less funded spending to pay.
The key is matching the category. Categorize a grocery refund to Groceries, not to
income — otherwise it looks like new money instead of a reversal, and your category
spending will not net out.
Rewards and statement credits
A cash-back reward, sign-up bonus, or statement credit is different — it is not reversing a specific purchase, it is the card issuer reducing your balance. Categorize it to your income or Ready to Assign, or leave it uncategorized. It lowers the balance you owe without changing your Payment category’s safe-to-pay number. Because the balance drops while the reserved cash stays put, you end up with more set aside than you owe — a surplus. When the card has a surplus, you have cash reserved that the card no longer needs. You can move that money back to Ready to Assign and give it a new job elsewhere in the budget.Quick reference
| Money in | Categorize it as | Effect |
|---|---|---|
| Refund / return | The original spending category | Reverses the purchase; category and safe-to-pay both adjust back |
| Reward / cash back / statement credit | Income or Ready to Assign | Lowers the balance owed; creates a surplus you can reassign |
Related
How credit cards work
The model that makes refunds net cleanly.
Payment category is short
The flip side: unfunded spending.
Categorize transactions
Put a refund in the right category.
Pay your card
Record a payment as a transfer.