A Budget Proposal - Virtual Accounts

[Mike or Penny Novack]

On 1/14/2016 12:27 AM, Andrew Beard wrote:

>
> My proposal for handling budgets in GNUcash is to elevate the idea of an ‘envelope’ account to a new level.  In particular, I propose the creation of a new ‘virtual’ account type.  By ‘virtual’ account I mean simply an account which calculates balances and maintains totals but the transactions themselves always belong to the ‘real’ parent account (e.g. a bank checking account).
>
> Cash envelopes themselves provide a nice case-in-point.  When a person uses actual envelopes to budget their cash, the amount of the asset - cash - is the same regardless of how many envelopes they might have split it into.  However, when somebody spends from an envelope, they have done two things:
> 	1) Decreased their budgeted amount for that envelope category (or budget).
> 	2) Decreased their Cash asset amount.
> The envelope (or virtual account) balance has decreased, but the actual cash asset has decreased as well.  Said another way, *both* ‘accounts' have decreased, but one asset is real (cash) and the other is ethereal (your idea of where that money should have gone).


Useful that you referred back to the original way "envelope budgeting" 
worked back when it was physical bills in physical envelopes. Please 
take another look at that PROCESS (what you would have been doing). You 
will see that you DON'T need anything else in gnucash. Or rather, you 
want these "virtual accounts" to play the role magic might have (bills 
magically moving from their envelope to your wallet instead of you 
having to actually touch them).

In the old days ---- you went shopping and spent $10 out of your wallet 
to buy groceries. When you got home, you took $10 out of the groceries 
envelope and put that into your wallet. OR, perhaps you knew you were 
going to go grocery shopping, so before leaving home you took $10 from 
the envelope and put that in your wallet. OK so far?

Assuming those were real accounts in gnucash, what would those look 
like? Do you really have a problem seeing what those transactions would 
be? Your "virtual accounts" are intended to make the bills "jump" in 
between your wallet and the appropriate envelope so you didn't have to 
actually enter that part of the overall transaction.

Look, this sort of thing (having to enter more of a transaction) is NOT 
limited to budgeting. Since small amounts, I do not have separate bank 
accounts for each restricted fund.  So when an expense is paid that 
qualifies for one of those restricted funds being used, besides cash and 
the expense, also a transfer from restricted to unrestricted (the main 
part of the bank account). When recording a sale of goods, not just 
sales and cash affected but also goods inventory and "cost of goods sold".

So here (envelope budgeting) not just cash (wallet) and particular 
expense account but also wallet and the particular envelope. Nothing 
virtual involved.

Michael D Novack