Car loan payments and budgets

[Yawar Amin]

Hi,

On 2012-04-26, at 19:38, skerit wrote:

> I just bought a new car. If I do everything by the gnucash-book I have to
> create an account for the loan in the "liabilities" section.
> 
> But I don't see how I can make that work with my budget.
> 
> Because, no matter how you look at it, in the end those loan payments are an
> expense. And if I just transfer the money from my account to the loan
> account it will never show up in my budget report
> 
> Or am I missing something here?

Yes. Your loan repayments are made up of two parts: the repayment of the principal, or the actual loan itself, and the payment of interest on the loan. The repayment of the principal is going to be moving money from an asset to a liability account; but the payment of interest is going to be moving money from an asset to an expense account. That’s what will show up in your budget report.

If you got an amortisation schedule of repayments with the car loan, then you can actually enter all these transactions in advance and not need to worry about them on a month-to-month basis.

Regards,

Yawar