How To Budget Investment Accounts?

[David Carlson]

On 8/11/2014 6:48 PM, Jonathan Chan wrote:
> Ping. Can anyone help me with this issue? If not here, is there any other
> place that I can ask for help with this?
>
> Thanks,
> Jonathan
>
>
> On Thu, Aug 7, 2014 at 1:32 AM, Jonathan Chan <jonmchan at gmail.com> wrote:
>
>> Hi all,
>>
>> I have a 401k account that I put money into and the money is invested into
>> different mutual funds. My 401k account allows me to download the
>> transactions as QFX file so I have set up my 401k account to have
>> subaccounts that are investment accounts in the mutual fund like the manual
>> suggests to do:
>>
>> Assets
>>    \ Investments
>>         \ 401K account
>>             \ BRUFX
>>             \ VHCIX
>>             \ etc.
>>
>>
>> When I am budgeting, I would like to budget how much money I invest into
>> my 401k account, but when I look at the budget report, I see erroneous data
>> because technically whenever I put money into the 401k account, it is
>> withdrawn from the sub-accounts immediately. I can't budget the
>> sub-accounts because it is in mutual fund shares and they change from month
>> to month, is there any way to solve this problem and keep track of my
>> mutual funds still? I want to budget a fixed amount of money into the 401k
>> account every month and have it properly tracked in the budget report.
>>
>>
>> Thanks,
>> Jonathan
>>
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There are many different ways to address this. 

First you need to decide what information you want in your budget.  I
suggest starting with a very simple budget to see how it works before
going too far with it.  Since it is mainly for your own personal use,
don't bother tracking anything that you do not care to monitor.

For the case you are asking about, one possibility would be to enter
each transaction with two credits and two debits similar to this:

Contribution to 401K                                    Deposit       
Withdrawal
    Asset:401K Account                                 100.00
    Income:Tax-Deferred                                                 
      100.00
    Expense:Budgeted 401-K Investment    100.00
    Asset:Checking Account                                             
    100.00

Then you can budget the Expense:Budgeted 401-K Investment account and
track the funds being transferred to the 401-K by monitoring that
expense account.

This also has the benefit of tracking the part of your income which is
tax deferred because of the contribution.  You would probably need to
treat a company contribution in different accounts using a similar method.

David C