How To Budget Investment Accounts?

[Jonathan Chan]

Hi David,

Thanks for the reply. I'm not sure if that works well either as then Income
now is double-reported for all the tax-deferred income... I would have
Income:Salary reporting 100 dollars into the checking account, and then
another 100 dollars from tax-deferred income. Are you sure your logic is
correct? I tried putting it into my account and I couldn't get that part to
balance.

Thanks,

Jonathan



On Tue, Aug 12, 2014 at 6:26 PM, David Carlson <david.carlson.417 at gmail.com>
wrote:

> 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 withdrawn from the sub-accounts immediately.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
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