Budgeting/pre-allocation procedure?

[Eric Angell]

On Wed, Dec 15, 2004 at 10:26:48 -0600, Michael J. Barillier wrote:

> I've seen various threads related to aspects of budgeting in Gnucash
> but haven't seen anything concrete that I could implement.  Basically,
> I'd like to set aside funds in my checking account for upcoming bills,
> either known or estimated, so that if my wife or I look at the account
> balance we see what's available to be spent, not the actual balance.
> The best solution I've come up with is to create a separate asset
> account and transfer whatever I expect to spend on upcoming bills into
> that holding account, and when I pay the bills from the checking
> account I transfer back into the checking account to cover what I've
> written.  I'm wondering if someone hasn't come up with a more elegant
> or ``correct'' (from an accounting perspective) method that wouldn't
> be a tremendous PITA to implement?
 
I've had a similar itch, and while the best I've come up with
isn't great, I think it's slightly better than what you're doing.

I have money in a savings account that is dedicated to several
different causes, my "rainy day fund" being one example.  Part of
said rainy day money is in a CD, where it earns better interest,
and part of it is in the savings account, where it's more liquid,
but I need to make sure that I don't spend it or consider it
available for other things.  So I have an account tree that looks
something like this:

Bank 1
    Checking
    Savings
        General
        Rainy Day
        Toys
        ...

I have other categories in the ..., such as Toys, where I can
save up money for a new laptop or whatever.  Anyway, whereas I
use the Checking account like one would expect, the Savings
account is a placeholder, and General is used for all
transactions (this switch is easy to make via renaming, creating
a placeholder account, and changing the parent of the original).

The Savings account has subaccount totals equal to what the bank
thinks is in the account, but I can easily see what I consider to
be the distribution of money in the account.  There is one
transaction from General to each of the other subaccounts, with a
date sometime in the future (I usually keep it about two weeks
ahead and move it each time I get a paycheck).  If I want to add
money to one of my categories, I increase the amount of that
transaction, and when I go to buy a new toy, I either decrease
the transaction amount or delete it entirely.

Later, there's no record that I had money set aside for
something, but I don't see that as a huge problem.  And since my
transactions never really "exist", I don't have any
reconcilliation problems.

-E

-- 
Tragedy is when I cut my finger. Comedy is when you walk into an
open sewer and die.
        --Mel Brooks