Tracking Money in Savings Account

Wed Dec 15 17:58:04 EST 2010

OK, another scenario, same situation:

This is what actually happens:
I receive an inheritance check for $aaa.Deposit the inheritance check into savings.Owe dentist $bbb.Need to make $ccc monthly payments from checking acct until debt is paid off.I'm using the inheritance money that's in the savings acct, therefore I need to first transfer the money from my savings acct to my checking acct.  Then I write a check to the dentist.
This is what I do in GnuCash:
Accounts to set up:

Assets:Bank:CheckingAssets:Bank:Checking:Healthcare:Dental

  Assets:Bank:SavingsAssets:Bank:Savings:InheritanceIncome:Inheritance
Expenses:Healthcare:DentalLiabilities:Dentist

Enter $aaa deposit in the Assets:Bank:Savings register to transfer from Income:Inheritance to Asset:Bank:Savings:Inheritance (I can enter this transaction using either the Income:Inheritance register or the Asset:Bank:Savings register)Enter $bbb in Equity:Opening Balances register to transfer $bbb from Equity:Opening Balances to Liabilities:Dentist.  This creates the account to show how much I owe the dentist.
Enter $ccc withdrawal in the Assets:Bank:Savings register to transfer from Assets:Bank:Savings:Inheritance to Assets:Bank:Checking:Healthcare:Dental (this action will decrease my savings acct balance by $ccc and increase my checking acct balance by $ccc)Enter check withdrawal of the amount of $ccc from Assets:Bank:Checking to transfer $ccc from Assets:Bank:Checking:Healthcare:Dental to Expenses:Healthcare:DentalNow I'm stuck with how to decrease Liabilities:Dentist account.  Where did I go wrong?
Thanks for your help!

Wayne

> Date: Wed, 15 Dec 2010 14:40:01 -0500
> Subject: RE: Tracking Money in Savings Account
> From: derek at ihtfp.com
> To: wrbird at hotmail.com
> CC: derek at ihtfp.com; gnucash-user at gnucash.org
> 
> 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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> >> >
> >> > gnucash-user at gnucash.org
> >> >
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> >> >
> >> > -----
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> >> > Please remember to CC this list on all your replies.
> >> >
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> >> >
> >> >
> >> >
> >>
> >
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