Tracking Money in Savings Account

Derek Atkins derek at ihtfp.com
Wed Dec 15 14:40:01 EST 2010 

Hi,

Please remember to CC the list on all replies..

On Wed, December 15, 2010 2:35 pm, Wayne Bird wrote:
>
> OK Derek,
>
> Given the correction of no "Add paycheck to Income:Paycheck" and only
> Expense:Movies, this is what I understand:
> Enter split transaction in Asset:Bank for my paycheck.  Part of the split
> will consist of a transfer from Income:Paycheck to Asset:Bank:Movies.
> When I buy a movie, I will transfer from Asset:Bank:Movies to
> Expense:Movies.
>
> Now if I wanted to see how much accumulated money I've spent on movies,
> all I would need to do is look at the balance of Expense:Movies.  If I
> wanted to know how much money I have to spend on movies, then I just need
> to look at the balance of Asset:Bank:Movies.
>
> Are the two above paragraphs correct?

Yes.

> Wayne

-derek

>> Date: Wed, 15 Dec 2010 13:14:50 -0500
>> Subject: RE: Tracking Money in Savings Account
>> From: derek at ihtfp.com
>> To: wrbird at hotmail.com
>> CC: daniel3ub at gmail.com; warlord at mit.edu; gnucash-user at gnucash.org
>>
>> Hi,
>>
>> On Wed, December 15, 2010 1:00 pm, Wayne Bird wrote:
>> >
>> > Hello Daniel,
>> >
>> > Ah, this seems to be a bit different then what Derek was saying.  If I
>> > understood Derek correctly (the big "if"), he has two accounts for the
>> > same item; Asset:Bank:Movies and Liability:Expense:Movies.  So
>> > transactions would go something like this: Add paycheck to
>> > Income:Paycheck; transfer Income:Paycheck to Asset:Bank:Movies.
>> Purchase
>> > movie, transfer Asset:Bank:Movies to Liability:Expense:Movies
>>
>> Not quite.  For one thing there's no such thing as "Add paycheck to
>> Income:Paycheck".  The first step is purely "Transfer from
>> Income:Paycheck
>> to Assets:Bank".  Also, there is no such account as
>> "Liability:Expense:Movies".  It's purely "Expense:Movies".
>>
>> > If I understand what you're saying, there is only one account,
>> > Liability:Expense:Movies.  So transactions would be as follows: Add
>> > paycheck to Income:Paycheck; transfer Income:Paycheck to
>> > Liability:Expense:Movies.  Now when I purchase a movie what do I do?
>> I
>> > can't transfer from Liability:Expense:Movies to
>> Liability:Expense:Movies.
>> > I'm sorry if am a bit dense (or a lot), please hang with me and I'll
>> get
>> > it.  And I've read a lot of the documentation before I started this
>> > thread.  So I guess that proves how dense I am:(
>>
>> This is absolutely the WRONG way to do it.  There is no Liability here.
>>
>> > Wayne
>>
>> -derek
>>
>> > From: daniel3ub at gmail.com
>> > Date: Wed, 15 Dec 2010 14:43:43 -0200
>> > Subject: Re: Tracking Money in Savings Account
>> > To: wrbird at hotmail.com
>> > CC: warlord at mit.edu; gnucash-user at gnucash.org
>> >
>> > Hi, Wayne.
>> >
>> > Actually, you are working with Income and Expenses accounts, but you
>> > didn´t know it :)
>> >
>> > What I´d do:
>> > Create a Liability account for every category you have. These will be
>> your
>> > envelopes.
>> > In your paycheck transaction, create a split for each category you
>> have,
>> > pointing towards the corresponding Liability account.
>> >
>> >
>> >
>> > Every time you expend some money, create a transaction in the
>> > corresponding liability account, with the split pointing towards the
>> > corresponding Expense account.
>> >
>> > Also, reading the docs Derek suggested is aways a good idea ;)
>> >
>> >
>> >
>> > Good Luck!=====
>> > Daniel Trezub
>> > http://www.gameblogs.com.br
>> >
>> >
>> >
>> > On 15 December 2010 14:07, Wayne Bird <wrbird at hotmail.com> wrote:
>> >
>> >
>> >
>> >
>> > Thanks Derek for your reply!
>> >
>> >
>> >
>> > Yes, define "standard accounting method" -- good question:)  Granted,
>> > everyone has their own way of doing things, however it appears the
>> most
>> > common method is tracking assets, income, expense, etc. where income
>> is
>> > viewed separately from expenses.  For example, my paycheck would just
>> go
>> > into an income account and that's it.  Then I would track all my
>> expenses
>> > through various expense accounts.  On the other hand,  I have always
>> used
>> > the envelope system, divvying out my paycheck into these various
>> > categories.  So these categories (or accounts) can be seen as both
>> income
>> > (because I'm splitting my paycheck/income into these categories) and
>> > expense (because I'm purchasing items from these categories).  This is
>> > what makes the most sense to my little brain:) and that's why I'm
>> having
>> > difficulty with "standard" accounting methods because they have to be
>> > separate.
>> >
>> >
>> >
>> >
>> >
>> > I'm sure I'm making this more difficult than it should be, so if you
>> > please continue to with me I'll use the suggestion of subaccounts that
>> > each of you made and go from there.  I haven't had a chance yet to
>> look
>> > into this, but I will soon.  So as Derek, as John Mason stated, is
>> your
>> > checking account just a placeholder for all the subaccounts?  What
>> John
>> > stated made sense to me and this is what I'll try first.
>> >
>> >
>> >
>> >
>> >
>> > Again, thanks all of you for holding my hand through this!!  I greatly
>> > appreciate your help.  As I continue down this road I'm sure I'll have
>> > more questions.
>> >
>> >
>> >
>> > Wayne
>> >
>> >
>> >
>> >
>> >
>> >> From: warlord at MIT.EDU
>> >
>> >> To: wrbird at hotmail.com
>> >
>> >> CC: adardis at gmail.com; jmason at masondrywall.com;
>> gnucash-user at gnucash.org
>> >
>> >> Subject: Re: Tracking Money in Savings Account
>> >
>> >> Date: Wed, 15 Dec 2010 10:09:24 -0500
>> >
>> >>
>> >
>> >> Wayne Bird <wrbird at hotmail.com> writes:
>> >
>> >>
>> >
>> >> > Thanks so much for your help!  I will continue to play around, and
>> I'm
>> >> sure I'll be back with more questions.
>> >
>> >> >
>> >
>> >> > Though I used the envelope system in the past, it seems that's not
>> the
>> >
>> >> > standard accounting method.  I tweaked MSMoney for years in order
>> to
>> >
>> >> > make it "act" like an envelope system and I don't want to tweak
>> >
>> >> > GnuCash to do this, I'd rather just learn how GnuCash is designed
>> to
>> >
>> >> > be used and use it accordingly.
>> >
>> >>
>> >
>> >> Define "standard accounting method"?  It's certainly one way that
>> many
>> >
>> >> people do it.  GnuCash doesn't need to be tweaked to do this.  In
>> fact
>> >
>> >> it's somewhat designed to support this!  See, for example, the "Open
>> >
>> >> Subaccounts" option on the reconcile dialog.  This lets you reconcile
>> >
>> >> a Bank Account with subaccounts.
>> >
>> >>
>> >
>> >> You can also look at the Budget features of GnuCash, but I've never
>> used
>> >
>> >> them myself so I cannot comment on them.
>> >
>> >>
>> >
>> >> > Please remember to CC this list on all your replies.
>> >
>> >> > You can do this by using Reply-To-List or Reply-All.
>> >
>> >>
>> >
>> >> -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 at MIT.EDU                        PGP key available
>> >
>> >
>> >
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>> >
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>

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