Budgeting - Let's decide what we want!

[Matthew Vanecek]

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On Sat, 2003-08-30 at 21:11, doug foskey wrote:
> On Sunday 31 August 2003 10:44 am, Matthew Vanecek wrote:
> > On Sat, 2003-08-30 at 18:46, Jack McKinney wrote:
> > > Big Brother tells me that Jon Lapham wrote:
> > > > Yeah, what Matthew said.  I agree 100%.
> > > >
> > > > *If* there is budgetting in GnuCash, I think (for what it is worth) it
> > > > absolutely needs to be something completely separate from the existing
> > > > functional system (I mean both in terms of code base and UI).
> > >
> > >     I have seen this POV mentioned several times, and I just don't grok
> > > it.  What it seems to come down to is, spend the money, then check the
> > > budgets afterwards to see if you screwed up.
> > >     In other words, you can budget one of two ways: before the fact or
> > > after the fact.  The "envelope" system of having subaccounts of the
> > > main account is the before method.  If your mortgage payment is $800,
> > > and you are paid twice a month, then you can budget $400 into your
> > > housing subaccount every paycheck, and thus know that you will have
> > > enough for the mortgage payment on the 1st.
> > >     This is even better when you have to pay $900 for your car insurance
> > > every six months.  By putting $75 into your car budget every paycheck,
> > > then you'll have your $900 after six months.
> > >
> > >     With after the fact budgeting, you mark each transaction in some
> > > way and then do reports to see how you are doing.  What I don't grok
> > > in this method is how to see how much I have available to spend.  My
> > > account may say that I have $900 in it, but I don't know that $800 of
> > > it is "reserved" for the upcoming mortgage payment.  If I want to buy
> > > that new DVD burner for $150, GnuCash tells me I have it, but in reality
> > > I don't.  I have to run reports to try and figure it out.
> >
> > With budgeting, you don't mark transactions at all.  Why would you?  All
> > you need is the sum of splits in Account A for <from date> to <to
> > date>.  If your budget plan accurately reflects your income, and you
> > have not budgeted more cash outflow than inflow, you can see at a glance
> > how you are doing on your budget and be confident in the figures.
> >
> > And budgeting 'after the fact' is not budgeting--it's getting a
> > transaction report of cash flow report, it seems to me.  What use is
> > creating a budget after you've spent the money to guide you in how you
> > were *supposed* to spend?  Wouldn't it make more sense to create a
> > budget beforehand?  It is useful, of course, to use past history in
> > setting up a budget--governments and corporations do that quite well.
> > Sometimes to a fault! ;)
> >
> > No, both methods discussed here allow for similar results: seeing how
> > well you are keeping to your budget, and seeing where extra cash may
> > exist.  Keeping the budget separate, however, is cleaner and more
> > extensible, and easier to implement (I believe) and maintain.
> 
> That is why I thought a way to select items (& periodical payments) & extract 
> them to a Spreadsheet would be workable: then you can manipulate the amounts 
> to add inflation etc, & generate a forecast using past figures & added 
> potential ins & outs: exactly what a budget is!
> 
> regards Doug
-- 
Matthew Vanecek
perl -e 'print $i=pack(c5,(41*2),sqrt(7056),(unpack(c,H)-2),oct(115),10);'
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I'm always getting in the way of something...