How can I budget a 'conditional reimbursement'?

Question

To start off, I don't know the correct term for this situation, which limits my research options. I have looked for 'conditional loan', 'conditional reimbursement' and such, but none of the results resemble my situation.
I recently bought an item for my home office. My employer reimbursed me. However, the reimbursement comes with the condition that if I were to leave the company within five years I will have to pay the amount back, proportional to how much of those five years have passed. For example, suppose the item cost $100. If I leave after one year I'll have to pay back $80, if I leave after two years $60, etc.
How do I budget for this? I'm using YNAB Classic, though I assume the question is generic enough to apply to any envelope system.
My goals is to have the money set aside just in case I do decide to find another job, but since the money is actually in my account I can't handle it the same way I would normally handle a debt or a loan.
What is the proper way to budget this situation?

aidanh010 · Accepted Answer

The way I would model for budgeting it is that the employer has loaned you $100 and will pay part of that to you each year until there is no balance left. So for now you have an Account Payable of $100, and each year you have an Income of $20 that reduces that payable.
For tax purposes, I'm not sure of the correct way to handle it however.

RonJohn · Answer

This sounds like a "reverse" sinking fund.
In a typical sinking fund, where you save for the US$600 semi-annual car insurance payments, you save $100 every month for six months.
But in your case, you need $100 now (the first full year), $80 in the second year, $60 in the third year, $40 in the fourth, and $20 in the fifth. After that, $0.
I'd probably allocate some of my Emergency Fund to a Conditional Repayment category, and then every year move 1/5 of that money back to your Emergency Fund.
Depending on how much you need to reimburse them, and since (according to an added comment), you need to pay the money back no matter the reason you don't work there any more, I'd consider increasing my Emergency Fund.

D Stanley · Answer

How I would do it is treat it as a "savings goal". (I don't use YNAB but I'm assuming that a savings goal is a supported concept somehow) If you can, set aside enough in a cash account ("envelope") to cover the amount that would be due if you quit, or contribute to it periodically if you can't do it all at once.  As time goes on, reduce the amount of the goal and the amount in that envelope appropriately.
So the only thing you have to worry about is if you quit before you've saved enough to pay back the reimbursement. Then you need to decide what to do: pull from your emergency fund, pull from some other fund, borrow, etc.

Matthias · Answer

I have a pseudo-account "Payables & Receivables" for this on my budget.
In your situation, I would budget as follows:

First, buy the item with your own money and assign that transaction a category (needs to be funded with your own money). Because, after all - you are paying with your own money and now own the item.
The reimbursement of your company won't get a category, but will be recorded as a transfer to the "Payables & Receivables" account. This account will now have a negative balance. Why? Because you owe your employer money at this point (think about: If you leave tomorrow, you basically have to pay back all the money).
Create a scheduled transaction in your "Payables & Receivables" account. Your are free if you want to do that yearly / quarterly / monthly / ...
Personally, I would probably do monthly, so I would create a monthly (inflow) transaction of 1.66 (100 / 5 / 12). The category can either be "Inflow: To be budgeted" or can directly go to the catgeory you used to buy the item in the first place.

This approach has various advantages:

If you leave your employer, you know exactly how much you owe (by selecting the original transaction and all the past occurences of the scheduled transaction).
Your budget stays "true", i.e. you are not pretending to have more money than you actually have.

Personally, I would only do this for significant amounts. If it's really just $100 then well - just roll with the punches when you change employers. Those $100 will probably the least of your concerns then.

How can I budget a 'conditional reimbursement'?

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