Tracking Money in Savings Account

[Dennis Brakhane]

On Fri, Dec 17, 2010 at 12:26 AM, Wayne Bird <wrbird at hotmail.com> wrote:
> This is great, this is exactly what I'm talking about.  I'm just used to putting every expense into a subaccount
> and then pull from that subaccount.  So, what I'll try now is having a subaccount for only certain amounts I have
> to keep track of separately, i.e. the gifts my wife receives.  Before, I split every paycheck into specific
> subaccounts, I won't do this anymore.  However, splitting my paycheck also acted as my budget because I
> would split it in the same way I would have if I created a separate budget.  With the subaccounts, I could easily
> see how I was doing with my spending.  Now it looks like I will need to create a separate budget so I can run a
> planned/actual expense report to see how I'm doing.  Does this make sense?

Yes, it does. I don't know anything about MS Money but it seems to me like you
used envelopes both for budgeting as well as some sort of replacement for
proper Expense accounts and therefore tend to mix them up.

In Gnucash, you can simply see how much you spend
where just by looking at the expense account in question.

As some have said, you surely could continue to split each paycheck
into envelopes
and therefore planning your spending beforehand, but at least I think
this is overkill
and actually limits you on how you spend your money.

For example, let's say you allocated 10$ to the movies envelope and
another 10$ to
the book envelope. After you saw a movie, another movie opens that you
just have to see, alas
your movie envelope is empty. You would now have to move the 10$ from
your book envelope
to the movie envelope just to spend it on movies. Wouldn't it be
simpler to simply have one
envelope called "entertainment" Thinking this further, why do you need
an entertainment envelope
at all? After all, all your money in your account that isn't needed
for something else is available to you,
so your bank account is your "entertainment" envelope.

I'd use envelopes only for things you really save up for. Costs that
you know you must pay,
like taxes or insurance. This is money you don't have available, as
you know you have to pay it. For
these, it makes sense to put them into subaccounts/envelopes, because
that money is not
available to you for spending.

Referring to your dental example: you only "need" an envelope for
expected future dental expenses,
not for paying off your debt. The money for your first doctoral visit
is already gone and you
are paying off the debt. I'd only use a dental envelope if I know a
second visit to the doctor
is unavoidable, so that I can save enough money to pay him immediately
instead of having
to take a "loan" from him.

To make a long story short: Use envelopes for saving up for costs you
know you must pay. I wouldn't
create an envelope to save up for a TV, because that is nothing I
absolute have to pay on a specific day,
I'd just create a budget.

But as also said by others: you are free to use GC any way that makes
it most convenient to you.