Old Dog, New Tricks

[Patrick Doyle]

Greetings,
I have a fairly simple financial picture (checking account, savings
account, and 2 credit cards), and a fairly simple system for managing
my finances that I have used for the past 25 years or so.  I started
off keeping track of my finances with a spreadsheet, moved on to
Quicken, stopped upgrading Quicken in 2006 or so, and haven't made any
changes to my system in ages.

Well, now I'd like to make a change to my system.  As you might guess,
part of that change involves changing my financial management
software.

In a nutshell, my financial management system (regardless of the
software) looks like this:

When money comes in (into my checking account), it gets divided up
into a bunch of "buckets".  (I am deliberately using the term "bucket"
here to avoid confusion with words like "categories", "subaccounts",
"classes", etc...)

When money goes out, I take it out of a bucket.
-- If the money goes out in the form of a credit card transaction, I
take the money out of the bucket at the time I make the transaction.
Not at the time I pay my credit card bill.
--- Therefore, paying credit card bills doesn't count as "money going
out" of my checking account -- I've already accounted for that.

The buckets are magic -- I can take more money out of them than I put
in -- as long as the sum of all of the money in all of the buckets is
positive (otherwise, my bank would get mad at me and start bouncing
checks).

I like this system because, at any given time, I can look at how much
money is in, e.g. the "Food" bucket and know if we can afford to go
out to dinner this week or not.

I can look at my record of paycheck deposits and see just how much
money I budgeted per-paycheck for Food back in 2003 compared to the
amount I'm budgeting for Food now.

I can tell immediately if I am budgeting more than I earn -- if I try
to put more in the buckets than is in my paycheck, it's immediately
obvious.

If you're still with me, first of all, thank you very much for reading
this far :-)
With all of that backstory, how can I adapt GNUCash to work with my system.
-- alternatively, how can I adapt me to work with GNUCash, but please
remember, I'm an old (and somewhat conservative) dog and don't like
change for the sake of change.

Having read through the excellent documentation, here is the gist of
the plan that I think adapts GNUCash to work with my system:

Set up Assets:Checking, Assets:Saving, Liabilities:MasterCard,
Liabilities:Visa in the traditional manner outlined by the User's
guide.

Use Equity:Food, Equity:Mortgage, Equity:Utilities,
Equity:Discretionary, etc... as my "buckets".
-- I recognize that this departs radically from the traditional use of
GNUCash where these would be considered "Expense" categories.

When I get paid, my split will be:
Debit: Assets:Checking (increases the balance)
Credit: Equity:Food, Equity:Mortgage, etc... (increases the balance)

When I buy groceries using my debit card, my spilt will be:
Credit: Assets:Checking (decreases the balance)
Debit: Equity:Food (decreases the balance)

When I go out to dinner and pay with my Visa, my split will be:
Credit: Liabilities:Visa (increases the balance)
Debit: Equity:Food (decreases the balance)

When I pay my Visa bill, my split will be:
Credit: Assets:Checking (decreases the balance)
Debit: Liabilities:Visa (decreases the balance)

It feels very weird to think of a "Debit" to my "Assets:Checking"
account as increasing the balance of that account, but that's what the
GNUCash guide says will happen, and the math all works out for keeping
track of my buckets as Equity subaccounts.

And, for the second time, if you're still with me, thank you again for
reading this far.  I am writing all of this down partly to wrap my
head around it, and mostly to ask for feedback from the community.  Am
I really the only person who thinks of finances in this way?  It seems
like GNUCash will track my transactions the way I want, but it doesn't
feel like the "standard practice" used by everybody else.  Are there
major flaws with this approach?  Is there something better that would
provide the same capabilities?

>From reading the manual, it doesn't seem like the "Budget" feature
offers what I want -- I can't tell at a glance if I've budgeted more
than my net take-home pay, I can't tell historically when things
change, etc...

What do you think?

--wpd