budgeting

[Derek Atkins]

nigel_gnucash-devel@unos.net writes:

> > the charge is made.  If the bucket has the three values "allocated",
> > "used:held" and "used:disbursed", then the charge moves $65 from
> > "allocated" to "used:held", and the Checking -> Credit Card xfer moves
> > it from "used:held" to "used:disbursed".
> > 
> > If we can do more interesting analysis with those three distinctions,
> > we should have them.
> 
> Oh, I'm not sure I like the way this is going.  I can see how that data
> would be interesting, and why you'd bring it up (and there may be a
> really good economic reason, too - I'm not an economics guy), but I'm
> concerned that pretty soon my *single* credit card payment needs to be
> associated with expenses *all*over*the*place*.
>
> I guess we could assume that a credit card payment changes the status on
> all the transactions between the previous payment and the current
> payment, but that still adds a level of complexity I'm not sure we need.
>
> What would you use the "used:held" and "used:disbursed" numbers for?
> Some kind of "this money as been logically spent but physically exists"
> calculation?

Well, it depends.  Do you pay off your credit cards every month?  If
so, then sure, your single transaction (Checking -> CreditCard) can
convert all of your allocated payments from 'held' to 'disbursed'.
However, if you maintain a balance on your credit card, that implies
that you are post-paying some of your budgeted items.

The difference between 'held' and 'disbursed', in my mind, is that
'held' implies you've already allocated the funds and 'disbursed'
implies that you've paid them.

However, I think the above model is slightly flawed.  There are not
two transactions; there are three!  The missing transaction is the
xfer from the Credit Card to the Expense Account associated with the
budget category.  Let me explain what I mean:

 1 You budget $500 for groceries.

 2 You spend $46 and pay with your credit card.  While no money is
   actually leaving any of your accounts at this point, there is still
   a transaction here from CC -> Groceries.  This in essense "holds"
   the funds.

 3 The bill comes and you need to transfer money from savings to
   checking to pay the bill.  This gives you two transactions, Savings
   -> Checking and then Checking -> CC.

>From the budgetting perspective, the "hold" is done at step 2, and the
"disbursement" is done at step 3.  Between steps 2 and 3 you basically
have a count of the amount of budgetted money that has been allocated
but not paid.  Although this amount of money is basically shown as the
balance of your credit card.

I think part of the problem in this discussion is that people are
coming from completely different angles and the nomenclature is
extremely confusing.  Some people seem to be looking at budgeting as a
way to describe Gnucash accounts; some people seem to think of
budgeting as a side line that is separable from Gnucash accounts.
This dichotomy appears to be causing some conversant trouble.
Unfortunately I don't have a good approach to solve this problem.

-derek

-- 
       Derek Atkins, SB '93 MIT EE, SM '95 MIT Media Laboratory
       Member, MIT Student Information Processing Board  (SIPB)
       URL: http://web.mit.edu/warlord/    PP-ASEL-IA     N1NWH
       warlord@MIT.EDU                        PGP key available