Adrien, A small point: there is an option on the reconcile window to include subaccounts, so that should not pose a problem.
David > On Jan 26, 2018, at 12:38 PM, Adrien Monteleone <adrien.montele...@gmail.com> > wrote: > > The biggest problem with any of this is if the money is actually sitting in a > bank account. Reconciling is a mess. (I don’t think you can reconcile a > parent by considering the child accounts to ‘roll-up’) > > This works best with physical cash you hold in your hand. > > Technically, that cash is still a current asset because it’s liquid, but > that’s up to you if you want to segregate it out. > > I use the following: > > Current Assets:Cash:Wallet > Current Assets:Cash:Savings > > I’ve tried several sub accounts of Savings, but it was just too messy when I > had to move money around for other purposes than the savings were intended > for. > > One thing that might help is simplifying your splits. > > I used to use the Savings account only for transfers in and out. I would then > create separate transactions for the expenditures from Wallet with money > either going back to Savings, or to Wallet. > > But I found in many cases, I was really taking money out of Savings to spend > directly for a purpose, so I stopped doing most of the out transfers to > Wallet and just recorded the expense directly from the Savings account. (I > prefer to always record outflows from the account they are flowing out of - > easier to keep it straight) If there was any change or a left-over balance > (say I broke a C-note for something) and didn’t put that back into my > physical Savings location but in my wallet, then one of the splits would be > to Wallet. (I’m meticulous and also have a Current Assets:Change account so > it’s easy to ‘reconcile’ my physical cash in my wallet. This also lets me see > how much is in my change jar if I want to cash it in. Yes, I even track > quarters separately because I’m currently stuck with coin-laundry so I need > to know at a glance if I have enough.) > > Certainly, if you are allocating money from a checking account to savings > held at home, don’t use a sub-account of checking. Use a sub-account of Cash, > or create a same-level account like I did as Savings, or if you want that > separate still, as ‘Allocated' with sub-accounts there for specific purposes. > (I suppose even ‘Envelopes’ would work if you’re physically stuffing them, > it’s up to each individual how they think of it) > > I’m not sure where you’re going using the ‘Money Allocated’ account with > respect to balancing it with its sub-accounts. > > To me, the Money Allocated account (or whatever you call it) should likely be > a placeholder account and never have any transactions in it. Everything > happens in the subs. > > If you want to allocate funds, you’re taking them from some other regular > asset account like Checking or Cash. (or Savings if that’s a physical account > at a bank) That’s the credit side. The debit side is the allocated > sub-account. > > So something like this: > > Dr. Assets:Current Assets:Envelopes:Dining Out $100 > Cr. Assets:Current Assets:Cash $100 > > Cash is now less $100 and your Dining Out envelope has $100 in it. > > When you go out to eat, I would save a transaction and just spend the money > (which is physical cash) directly from the sub account. > > Dr. Expenses:Food:Dining Out $60 > Cr. Assets:Current Assets:Envelopes:Dining Out $60 > > > A more ‘real world’ example might include holding the change in Cash instead > of putting it back in your envelope stash location, thus: > > Dr. Expenses:Food:Dining Out $58 > Dr. Assets:Current Assets:Cash $ 2 > Cr. Assets:Current Assets:Envelopes:Dining Out $60 > > Looking over your last reply more I think I see where you’re ending up with > extra transactions and splits. And while I know I said ‘accounts’ are just > ‘reasons’ and not necessarily related to physical things, perhaps treating > the allocated money as more of a physical asset would help. > > It looks like you want to keep track of allocating money and ‘spending it’ > out of that allocation as a separate ‘layer’ from the actual location of the > funds and why they leave your hands, that is you want to record the > transaction TWICE. That’s adding complexity that I don’t think is needed. > > This is why the allocated sub-accounts belong under one or more regular asset > accounts. > > If the money physically is in your control, your wallet, a safe, a drawer of > envelopes or such, I’d put the Allocated and Allocated:Subs like so for more > regular and discretionary purposes: > > Assets:Current Assets:Cash > Assets:Current Assets:Cash:Allocated > Assets:Current Assets:Cash:Allocated:Dining Out > Assets:Current Assets:Cash:Allocated:Movies > Assets:Current Assets:Cash:Allocated:Snacks > Assets:Current Assets:Cash:Allocated:Groceries > etc. > > But if the funds really never leave your checking account until you spend > them, or you regularly write checks/pay online for some purposes I’d use this: > > Assets:Current Assets:Checking > Assets:Current Assets:Checking:Allocated > Assets:Current Assets:Checking:Allocated:Rent > Assets:Current Assets:Checking:Allocated:Utilities > Assets:Current Assets:Checking:Allocated:Loans > Assets:Current Assets:Checking:Allocated:Insurance > etc. > > You might even put some of the Allocated subs under a credit union/savings > account that is rarely touched for the less frequent purposes: > > Assets:Current Assets:Credit Union > Assets:Current Assets:Credit Union:Allocated > Assets:Current Assets:Credit Union:Allocated:Charity > Assets:Current Assets:Credit Union:Allocated:Gifts > Assets:Current Assets:Credit Union:Allocated:Vacation > > > You could alternately move ‘Allocated’ up one level if it has a separate > physical location than your usual wallet/stash, or even drop it entirely and > put the subs directly as children of their physical location you’ll likely be > spending from. > > Separating the subs according to from where you’re likely to spend their > funds will help cut down on either inter-sub transfers, or as I’m about to > show below, spending funds saved for one purpose for a different one. > > In all cases, record the credit side of the transaction for any expense from > where it actually comes from. As I mentioned, I don’t think transfers back to > the Checking/Cash/Savings parents are necessary, just credit against the > Allocated:Sub - you know where it physically was, and if the actual balance > doesn’t go back to the sub - and goes to a different level account for other > general expenses then include that as a split to save yourself a separate > transfer transaction. > > Having the subs under their respective ‘real world’ location where the funds > reside also allows you to still maintain at least a glance look at how much > is in that physical location. (Parents in the CoA include the balances of the > child accounts) But these child accounts are problematic for reconciling as > noted above when dealing with institutional accounts. > > I’m considering re-implementing this for myself as subs of ‘Savings’ (or > moving Savings to a sub of ‘Envelopes’) and instead of transferring money > around for expenses not related to the sub’s purpose - just recording the > expense there anyway. This way, I can see if there are any expenses in say > Envelopes:Vacation that are for expense accounts OTHER than vacations, like > Dining Out. That shouldn’t happen right? This would give an at a glance look > to see why my vacation bucket is always shallow. This also gets an added > advantage that now I can run a Cash Flow report using just one sub at a time. > (and save the configuration) That will show me what accounts had money flow > into that sub, and what expense accounts money flowed out of the sub for. > That will be an eye opener I’m sure. All that, and no special report or > functionality needed to be added by programmers. > > My main hangup is duplicating the formula and triggers for the allocating > that MoneyWell uses. (which is VERY convenient) I’ll still have to calculate > that outside of GnuCash and use the result to enter a transaction. (or better > yet, create the transaction in a spreadsheet and import it - perhaps I can > script it and maybe even make it a mini-app with an Automator Workflow) The > goal is to enter the receipt of funds - say a paycheck and then automatically > allocate portions to different subs based on priority and if they are ‘full’ > or not based on a savings goal. > > If you have any other approach for figuring out amounts to allocate, I’m game > for trying it. > > Anyhow, those are my thoughts on the subject. > > Thanks for starting the topic, it’s helped me consider tackling this again. > > Regards, > Adrien > >> On Jan 26, 2018, at 12:22 AM, Matt Graham <matt_graham2...@hotmail.com> >> wrote: >> >> 😊 You beat me to the punch on a couple of things. Yes, I have the tendency >> to over-complicate. I think there needs to be a simple way to do what people >> want though... >> >> I started plotting things out more and came to similar conclusions. >> >> First, when I say “fake” I mean “not corresponding to physical money – cash, >> account balance etc”. You’re right, its bad terminology, and I like the way >> you think of accounts as just a “thing”. >> >> Second, I have tried a number of other programs for my financial needs. All >> of them have various advantages and disadvantages. So with no clear winner, >> I thought I’d try to make GNUCash better... >> >> “Categories” is a vague word and risks things getting complicated. Perhaps >> all of this allocation of money concept would work best if GNUCash >> introduced “categories” purely for allocation? Applications where we are >> allocating things on the side without actually changing our accounts? Lets >> keep that aside and see if it works once we agree on everything else – >> sounds complicated (and I cringe at adding a new ‘semi-account’ type). >> >> Thinking about things further (and trying it) I agree 100% that liabilities >> aren’t involved. Allocating money to something decreases the amount of cash >> (agree with your term – LET “cash” = “liquid assets”), which would >> correspond to a decreased liability... Makes no sense having negative >> liabilities. My bad. >> >> I tried fiddling with equity as you (tentatively) suggested too, but this >> didn’t really make sense either. You end up with negative equity accounts >> showing how much you have to spend... >> >> So yes – I agree It is asset to asset... Decreasing cash available (asset) >> is balanced by increasing cash to spend on a purpose later (asset). >> >> Creating a sub-account to your physical cash or bank account to track >> allocated money is only good if you are always going to spend out of that >> account. If I’m tracking my spending money from my bank account, but then >> spend out of my cash on spending money... >> Dr increase Expense >> Cr decrease physical cash I used to pay >> Cr decrease the amount in that sub account – gets it out of that sub >> account.... >> Dr increase the amount in parent account – puts it back in the parent... >> It works, I guess, but just seems weird transferring balance between the >> child and parent like this. >> >> So they way I’m thinking of trialling is having a separate asset account >> “Allocated Assets” (separate from Current and Fixed assets). That way when >> allocating money the decrease (cr) in current assets (an account I’ve put as >> “Money Allocated”) is balanced by the increase (dr) in the specific >> “Allocated Assets”:”Spending Money” account. >> Spending is the same as above, but the increase to make “Money Allocated” >> less negative is balanced by the decrease in the relevant Allocated assets >> account.... >> >> Of course, all of this still means i’m entering four lines for one >> expenditure. The good news is that I only really have four accounts that >> involve allocated money like this (2 spending money, Holiday, and >> restaurant/café spending). Since all of this is a very common application >> for most personal users, I’m wondering if there is an easier way – >> “categories” defined against an expense account that just track how much you >> have “allocated” to that purpose? Would need both aspects – viewing “how >> much I have left” to spend for that purpose (budget line item?), but also >> ensuring “I have the money in my accounts to be able to buy it”. That all >> sounds too complicated – it would be easier to allow the user to tag an >> expense account, and have GNUCash automatically maintain the necessary >> “Allocated” asset accounts... >> >> I don’t think I am overthinking too far though, purely because it seems like >> a common thing people want. Hence, solution required... Philosophy of >> accounting tells us that this kind of allocation is: double entry on >> Asset/Asset when allocating, two double entries (Asset/Expense and >> Asset/Asset) when spending. >> >> Hmmm.... Same conclusion as before – I’m going to try it out for a while >> before suggesting any program changes... >> >> Thanks and regards, >> >> Matt >> >> From: Adrien Monteleone >> Sent: Friday, 26 January 2018 4:32 PM >> To: GNU Cash User >> Subject: Re: Future allocated money vs Budgets >> >> Here’s my attempt to save you a few months… >> >> I think you’re spinning wheels into something more complicated than it needs >> to be. >> >> For starters, there’s no reason any liability account or expense account >> should enter the picture of ‘saving’ for any particular purpose. ‘Spending >> Money’ savings is NOT an expense. Why would anyone think to record it that >> way? >> >> An expense is when you actually receive something of value and you owe >> someone else in exchange. (goods or services) >> >> If you pay for those goods or services at the same time you receive them, >> you just record the expense. >> >> If however, you receive the goods or services and then pay later - an >> accrued expense - then you use a liability account to track what you owe. >> (you still record the expense when you receive the goods or services) >> >> If you pay for goods or services *before* receiving them, it’s not an >> expense yet. (a deferred expense) It’s a shift from one asset, likely >> 'cash', to another asset called 'prepaid expenses.’ (cash is generic for >> liquid assets, this includes checking and savings) When you actually use >> that asset, that is, either receive the service or the goods, then you >> record the expense. (you’d also do this for other assets you acquire and use >> up later - like supplies. Depreciation is an example of a deferred expense >> for special assets you paid up front for but use up slowly) >> >> If however, you’ve not received any goods or services, and you don’t know if >> you actually will and haven’t yet paid for them, then expenses and >> liabilities aren’t even in the picture. >> >> All you are doing is segregating assets for informational purposes. (the >> practice of ‘envelope budgeting’ fits this model) The only accounts involved >> are asset accounts. >> >> They aren’t ‘fake’ any more than any other account in your books is fake. If >> by ‘fake’ you mean they don’t correspond to a real world account held at >> some institution then that goes for nearly all accounts in your ledger save >> a small handful. (unless you are quite the prolific banker, borrower, >> investor or credit spender) >> >> The point of accounts is to track where money comes from and goes to. Some >> of those accounts *might* have real-world counterparts, but they are all no >> more ‘real’ or ‘fake’ than any other. Accounts are ‘reasons’, not physical >> things. (note, ‘account’ is not some special term. You have an ‘account’ at >> a bank, because they created one in their books to track the money you gave >> them. They have lots of other accounts on their books that don’t correspond >> like you think they do. Your ‘account’ at your bank is simply their ‘reason’ >> for having money that doesn’t belong to them.) I might draw the ire of those >> wanting to have GnuCash stand apart from Intuit products, but basically, >> your Chart of Accounts is just a Chart of Categories, Chart of >> Classifications, or Chart of Reasons to be more accurate. It is a system of >> classification. Don’t think even of ‘account’ as a thing, it’s a really a >> verb in this sense - you are ‘accounting’ for why something is or why it >> happened. >> >> For the purpose of planning expenses, the GnuCash budgeting module can help. >> (certainly, it is limited and needs improvement) >> >> For the purpose of putting money aside or segregating it so you don’t >> ‘accidentally’ spend it, that’s just financial discipline. Some people find >> that they can utilize sub-accounts or special savings/asset accounts for >> this purpose to ‘hide’ the money from themselves. This can cause a mess with >> reconciliation though. >> >> Budgeting is the process of planning your expenses. Saving is the process of >> not spending. The two are not the same thing. (but certainly one influences >> the other) >> >> Using sub-accounts or other asset accounts has the advantage of being able >> to see how much you’ve saved, but not how much you have left towards a goal. >> I suppose one could get creative with equity accounts in this regard, but it >> might be more work than necessary. (I hesitated to even mention it) >> Certainly a special set of ‘savings goals’ liability accounts could be used >> as well, but there again, this is confusing the issue of what a liability >> really is or isn’t. Your balance sheet would be all out of whack. (unless >> you don’t care) >> >> With the envelope method, you aren’t creating liabilities by saving. (even >> negative liabilities!) You’re just taking some of your assets and putting >> them inside envelopes. Those are still assets. They don’t change their >> nature because of the envelope. You don’t suddenly have this not-quite >> nefarious non-expense or imaginary negative debt. You just separated your >> cash to keep it out of your wallet so you can pay your bills, buy gifts, >> make charitable donations, or have a small savings to cover emergencies >> instead of splurging on impulse buys or going out to dinner instead of >> cooking. >> >> What you have are assets that you want to earmark, at least temporarily and >> not even by hard and fast rule necessarily. You really don’t *owe* that >> money to anyone. >> >> So I would just use asset accounts. >> >> No extra complicated transactions. No contra-balanced liabilities. Your >> assets are always correct. Your liabilities are always correct. You only >> become confused as how complicated you make the process. (how many >> ‘envelope’ asset sub-accounts you create and where you put them) >> >> I’m also probably going to draw ire by suggesting another software package >> as a better fit for this purpose. (at least at this stage of GnuCash >> development) Certainly, some people have managed to finagle an ‘envelope’ >> method using special accounts in combination with either manual or scheduled >> transactions. (which are somewhat limited for the purpose) Most likely, if >> you really want to stick with GnuCash, you’d have to set up a spreadsheet to >> handle the envelope part, at least the calculations as to how much to >> segregate at each opportunity and keep track of any goals. >> >> But I’d proffer that something along the lines of MoneyWell is more suited >> to the task, especially for those who live from a checking account. As far >> as I know it’s Mac only however. (there are mobile versions, but I don’t >> think they are stand-alone) For those who handle a fair amount of cash, or >> want to track investments and asset values, or need to track A/P and A/R, >> GnuCash is better suited. MoneyWell was designed specifically to implement >> the envelope method (using ‘buckets’) to automatically ‘flow’ money you >> receive to targeted purposes such as your utilities, rent, car, savings, >> etc. I’ve played with it quite a bit, and I’d like GnuCash to have something >> similar, but I find it too limited for all my other accounting purposes. If >> there were a way to get transactions in and out easily, I might use it for >> daily purposes and budgeting and keep GnuCash for the overall big picture >> stuff. >> >> Regards, >> Adrien >> >>> On Jan 25, 2018, at 9:29 PM, Matt Graham <matt_graham2...@hotmail.com> >>> wrote: >>> >>> Hi All! >>> I’m going to discuss (and get people’s opinions) on a way in which many >>> users (myself included) struggle to get “what they want” from GNUCash >>> budgeting. GNUcash is very strict on proper double-entry bookkeeping >>> practices (which I love). In accounting, “budgeting” means that you are >>> plotting out exactly when you are going to change account values in what >>> way. It is forecasting the future states of the accounts. >>> >>> So if you have a monthly bill of $50 you need to pay – easy. You enter it >>> into the monthly periods - both expense account and asset account. You know >>> you will spend that amount, and you (usually) know what asset account you >>> are spending it out of. This is budgeting, and allows you to see that you >>> are not losing money overall and sending yourself broke by end of year. >>> >>> The next thing that people call “budgeting” is when they want to save up >>> for something, but don’t have a distinct plan of when it will be spent or >>> how it will be paid for. My example is “Spending Money” (but perhaps >>> “holiday savings” is a better example). I allocate $100 every month to >>> myself and my wife to spend as we want (hobbies, clothes, etc). If we don’t >>> spend it, it builds up allowing us to buy bigger stuff later. So I should >>> put $100 in each budget period against those two expense accounts, right? >>> NO, NO, NO!!!! From an accounting perspective, nothing is necessarily going >>> to be spent out of my “Spending money” expense account. It is an allocation >>> of money, not a spending of money. I can’t predict in advance any real >>> changes to my asset or expense accounts from this monthly “allocation of >>> money”. What I am doing from an accounting perspective is setting up a >>> liability on myself – a promise to give money later to someone (in this >>> case a promise to give money to myself). The reduction in my assets (cash) >>> is as completely fake as the increase in liability – none of my cash or >>> credit accounts have changed in value. >>> >>> For now I’m going to call this application “Future allocated money”, and >>> controversially say that it is NOT “budgeting”. >>> >>> So if you have some ‘budget’ purpose such as this, and lament that GNUCash >>> can’t give you the running total, the way to deal with it is the way this >>> person describes: >>> https://nam01.safelinks.protection.outlook.com/?url=http%3A%2F%2Fallmybrain.com%2F2008%2F12%2F15%2Fbetter-budgeting-with-gnucash%2F&data=02%7C01%7C%7C2d1add0a2c6a4643591d08d5647e306d%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636525415498305568&sdata=s61s%2FSFcqv5L1C0v2xEma0%2BbaPC4eQl2EyPXGHLgTcc%3D&reserved=0 >>> >>> The fake asset account is used to show the money that has been allocated >>> for certain purposes in the future (ie is unavailable). It needs to be a >>> fake account, because usually we don’t know in advanced which asset account >>> we are going to spend the allocated money out of. If you know which asset >>> account you are going to be spending the money out of, then sure you can >>> just create a sub-account to record the amount allocated to this. In this >>> case, you don’t really need to record the liability at all (the liability >>> is effectively shown in your sub-account), and the transactions become >>> easier – just transferring between that sub-account and the actual expense >>> account when you spend. But for most people, you need a fake asset account >>> because you don’t know in advance which account you will spend out of. >>> >>> The fake liability account is your running amount you can spend at any time. >>> >>> <b>The problem in doing this?</b> >>> It creates extra transactions that look really complicated. Allocating the >>> money is one fake transaction involving the fake “asset budgeted” account >>> and the “fake liability” account (and in the website they allocate money >>> from a pay packet rather than periodically, so it involves the real income >>> and real asset account too) . Spending money against a category affects the >>> expense account, the asset account, the fake liability account, and the >>> fake “asset budgeted” account... Looks confusing at first until your head >>> gets around it. >>> >>> <b>So how can we make all this easier on people?</b> (both to understand >>> and then to implement)? It is a pretty common thing to do. >>> Perhaps having some way to mark an expense account as “future allocated >>> money” based, and having the program automatically create the necessary >>> fake liability and asset accounts? And perhaps any expenditure recorded >>> against that expense account would be auto amended to include the effects >>> on the fake liability and fake asset account? >>> >>> I think I’m going to try all this for a few more months (and await your >>> thoughts!) before coming up with a proposal. >>> >>> Thanks and regards, >>> >>> Matt >>> _______________________________________________ >>> gnucash-user mailing list >>> gnucash-user@gnucash.org >>> https://nam01.safelinks.protection.outlook.com/?url=https%3A%2F%2Flists.gnucash.org%2Fmailman%2Flistinfo%2Fgnucash-user&data=02%7C01%7C%7C2d1add0a2c6a4643591d08d5647e306d%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636525415498305568&sdata=Rr7f0f3uZTy64eI9JuoAdLPJiisfP7VJ7TpCbSFYLCs%3D&reserved=0 >>> ----- >>> Please remember to CC this list on all your replies. >>> You can do this by using Reply-To-List or Reply-All. >> >> _______________________________________________ >> gnucash-user mailing list >> gnucash-user@gnucash.org >> https://nam01.safelinks.protection.outlook.com/?url=https%3A%2F%2Flists.gnucash.org%2Fmailman%2Flistinfo%2Fgnucash-user&data=02%7C01%7C%7C2d1add0a2c6a4643591d08d5647e306d%7C84df9e7fe9f640afb435aaaaaaaaaaaa%7C1%7C0%7C636525415498305568&sdata=Rr7f0f3uZTy64eI9JuoAdLPJiisfP7VJ7TpCbSFYLCs%3D&reserved=0 >> ----- >> Please remember to CC this list on all your replies. >> You can do this by using Reply-To-List or Reply-All. >> > > _______________________________________________ > gnucash-user mailing list > gnucash-user@gnucash.org > https://lists.gnucash.org/mailman/listinfo/gnucash-user > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list gnucash-user@gnucash.org https://lists.gnucash.org/mailman/listinfo/gnucash-user ----- Please remember to CC this list on all your replies. 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