A simple method of performing budgeting

[aperomsik@mail.com]

gnucash-devel-request@lists.gnumatic.com writes:
g> From: Ben Stanley <bds02@uow.edu.au>
g> To: jsled@asynchronous.org, gnucash-devel@gnucash.org
g> Subject: A simple method of performing budgeting
g> 
g> I have a book which claims to help people to budget and save money. They 
g> recommend that you open a bank account which will hold all your budgeted 
g> funds. You create a set of accounts for your budget:
g> 

I think this method is a good way to start the discussion of
budgeting, but it may be too simplistic for real life. The budgeting
system should not force me to transfer money from one physical account
to another to pay my bills, when I should just be able to write a
check from the account that has the money this week. As I see it, the
point of managing my finances via software should be to reduce the
amount of shuffling I have to do in the "real world."

Quicken has something called "savings goals" which are kind of like
virtual accounts. Savings goals are not used for Quicken's budgeting
feature, but they do allow something similar to what you
describe. Basically you set up transfers from "real" accounts to
savings goals. These transfers never get reconciled because they
didn't happen in real life. However, the money transferred to savings
goals does *not* show in the account it's really in, so you won't
spend it on other things. When it's time to spend the money from a
savings goal, you transfer the money back to the account it's really
in, and spend it.

This interface is a little klunky for everyday budgeting; in Quicken
it's mainly used to save for large purchases. However, I think a GUI
could be concocted which works this way internally, which could take
care of swapping out which accounts donated to the budget items if the
user wanted to pay some bills from a different account this month.

-- Aaron