Tracking Money in Savings Account

[Maf. King]

On Wednesday 15 December 2010 17:43:02 Wayne Bird wrote:

>
> So your saying that basically there are two accounts with the same name (I
> understand that this doesn't mean they're the exact same account), one will
> be an asset account (subaccount of bank) and one will be an expense
> account.  When my paycheck (income) is deposited into my bank account
> (asset), I will transfer some of it into the subaccount (asset), say
> movies.  Then when I spend on movies I will transfer from my asset account,
> movies to my expense account, movies.  Is that correct?
>
> Wayne.

Hi Wayne,

Whenever I come up against some sort of "Huh?" conceptual problem with how to 
do something in gnucash, I tend to try and think in terms of where cash goes.

Let's say that your employer gives you $100, in nice crisp dollar bills, as 
salary.  You want to set $20 of that aside for the movies, so you put the 
cash in an envelope, and write on it "+20 income on Dec 10".  You have gained 
some income, and you have gained some greenbacks in your envelope. (an asset)

Then you take $15 out to go see the movie.  You remove the cash and hand it 
over to the teller at the movie theatre.  You write "-15 movie foo Dec 15" on 
the envelope.  Your asset is now reduced, and you have clearly increased the 
total cost of your year's movie viewing.

GC can be just a tool to save writing on envelopes and running out of space, 
especially if the cash isn't in envelopes on your table, but all lumped 
together in a bank.  GC can also do other things too, like report on how much 
you have spent on movies this year, saving you lots of adding up!

Remember, an asset is just something you own, be that cash stuffed in a 
mattress, cash in a bank deposit account or some sort of investment such as 
shares or artworks or cars etc.

Hope that doesn't add more confusion,

Maf.