Budgets - how does the community want to use them?

[Bill Starrs]

Hi, 

I manage a testing department for a living and follow spending at home
as well.  I think that any of these issues discussed so far are more a
matter of timescale than technique.

First, you need to choose what accounts need budgeting.  For example, my
cable TV, cell phones, car loans, mortgage, etc are fixed for years at a
time.  If I don't expect them to change at all, I don't bother tracking
a budget.  I could always set one up if I want to see total spending
later but this can be done with cash flow reports without the overhead
of defining budgets. The user should be able to choose any accounts for
a given budget.  Multiple budgets should also be allowed.

Budgets should be set over discrete, future-looking time periods.
Monthly spending seems to meet most needs.  Budget analysis must answer
questions like:  How did I do last month?  How am I doing year to date?
Each month, the user should feel free to update future months if they so
choose.  This enables them to shift surpluses to other accounts if they
want to or not. 

The concept of tracking budget changes over time could be useful.
Define a monthly budget for a calendar or financial year and save it
initially.  If it is updated, save the old and new as new revisions, new
budgets altogether, or perhaps manage with effective date logic.

The UI from Quicken was nice in this regard, especially with handy
automations like the "Spread this amount evenly through the rest of the
months" or "Set a default budget based on the last x months of
spending."

For now I have been doing budget analysis outside of GnuCash, using
budgets stored as python dictionaries, sql, and pandas to do
calculations and spit out tables and graphs.  It would be much nicer to
set the budget in a GUI rather than key in 12 separate python
dictionaries in a text editor.

My 2 cents, but I thought Quicken did a decent job of budgeting and
would be worth benchmarking.

Bill


> Hi Michael, just a few questions with regard to your comments. I don?t pretend to be an expert, so apologies if my questions are silly.
> 
> >I agree the "something new" is what is really needed, not a replacement. The issue is NOT really "business" vs "personal" but "standard bookkeeping" vs things that are useful for individuals who require 
> something more basic. 
> 
> I concur (I think). Businesses tend to use what you call ?standard bookkeeping?, whilst this is not usually what individuals need/want. As I said in my other email, I don?t really know the business application, so I would welcome your input on how a business would want to do budgeting. My assertion is that Gnucash should aim to be useful to both businesses and individuals. I don?t mind whether this is accomplished through an additional plugin (something new), a change to the current budget plugin, or simply better documentation on how to do things. But what is very clear to me at the moment is that the user?s need is NOT being adequately met. As tempting as it is for me to just complain about it, I think I?ll have more luck if I can get some solid ground on what is actually needed (which may be nothing!).
> 
> >Just as individuals might need something to ENFORCE following  budget, entities might also be legally constrained to follow their budget (not spend amounts their governing body authorized). But those entities would be using standard accounting methods << their bookkeeper or treasurer would know how to spot when the budget amount for a category had reached its limit and refuse to authorize further expenditures, call a special meeting of the board or town council, etc. << living in a New England town, I have been at "special" town meetings called to authorize paying a bill that was over budget >>
> 
> If I understand you correctly, you are simply highlighting that individuals have different budgeting needs than businesses (in this case the local council). I agree, and that is a large part of the complexity I am struggling with. As per above my assertion is that Gnucash should be useful for both applications. The options are endless. E.g. We could have a setting that switches the budget gui between ?business? and ?zero-sum? and ?personal', each of which has different behaviour. I suspect (but am not sure) that we will need something different for business and personal application, but I need more use cases.
> 
> >The point is, an "envelope" application might be useful/necessary for individuals not up to doing it all the standard way and quite possibly gnucash could be extended to provide this capability but that should NOT be instead of "budgets".
> 
> When you say ?envelope? application, are you referring to a new plugin for Gnucash? Or are you referring to a guile budget report? Or something completely outside of Gnucash? I don?t tend to use this terminology. I?m also not sure what you mean by ?...gnucash could be extended to provide this capability but that should not be instead of budgets?. Are you saying that we should leave the current budgets as they are and implement something new for what personal users are asking for?
> 
> 
> >Yes, comparing "budgeted" with "actuals" quite useful, but providing side by side reports not necessarily coming from WITHIN the application. That's because how to treat actuals above budgeted would vary. Almost certainly would want to be able to annotate, because not just OVER but pending over (an unpaid bill that needs the budget adjusted or other emergency action). Like I said, I am treasurer for some, on the board of some, on finance committees and executive committees for some, and the resident of a town still governed by town meetings. What happens when an account goes over budget (or would go over budget) differs.
> 
> Agree, and this is something the program needs to handle differently in different circumstances. As you say, in some cases the user will want the budgeted amount to ?move right? (e.g. late arrival of a bill, or when saving up for something larger. In some cases the user will want unused budget amounts to drop off, no longer affecting the analysis of ?what can I afford?? (e.g. if I budgeted $100 for a gas bill when I actually end up spending $60. When I recheck how much money I can afford to budget, we don?t want an extra $40 of gas bill being carried over ? we can spend that on something else now!). Long story short, this is part of the considerations ? how does the program manage the remainder of the budget once we have the ?actual? set? Likely Gnucash will need to provide the user with a choice of some kind.
> 
> thoughts appreciated!
> 
> Cheers,
> 
> Matt