A Budget Proposal - Virtual Accounts

[jmk]

On 01/14/2016 10:04 AM, Mike or Penny Novack wrote:
> 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

While I agree that envelope budgeting CAN be done in GNUcash as is (no
need for virtual accounts) it is cumbersome and a lot of work. Perhaps
virtual accounts are not needed, but what I see as needed then is some
way to set up relationships from one account to another. The process of
entering transactions to and from the "envelopes" should be automatic.
When I enter a transaction for Auto:Gas it should know (by previous
setup from the user) and automatically deduct from the Auto/Car budget
category.

Additionally I would like to see a way to rebalance amounts from
different envelopes. Again, this CAN be done with manual transactions
but some assistance from the program would be a time saver.

Both of the above I've experienced with other budgeting software I've
used and would love to see this in GC too.