How should I enter values on a budget in gnucash ?

[lejohnston]

Edward,

Perhaps this is not the Thread to have this discussion but you raise issues I have been struggling with so I am going to jump in.

I recently moved from Quicken to GNUCash and am starting to feel comfortable here. Through 20 years in Quicken I evolved a budgeting system that worked for me. I never budgeted anything for Asset and Liability Accounts.

When I had a Mortgage I did not set up a Liability Account for the Mortgage or an Asset Account for the House. I did budget a monthly amount for the Mortgage. That worked fine for my budgeting purposes.

I did set up an RRSP Account. Then I budgeted an RRSP expense (i.e. how much I was setting aside each month to put into my RRSP). I can see how this is misleading. For instance if I was putting aside $500/month for the RRSP, that was $500 that I did not have available to spend elsewhere, but it was not really an expense as it was actually a transfer to another Asset Account. At the end of the year when I actually put the $6000 into the RRSP account my budget still showed that I had $6000 unspent and I had to manipulate it before I started the new year. In GNUCash it seems it would be easier to budget $6000 into RRSP and not have the Expense:RRSP account at all. Maybe I could have done the same in Quicken. The way the GNUCash budget is laid out that leapt out at me as a possibility, but I decided to start with what I knew from Quicken.

I am hoping to learn how to use GNUCash better.

Larry



On 03/01/17 11:57 AM, Edward Doolittle <edward.doolittle at gmail.com> wrote:
> 
> 
> 
> 
> On 1 March 2017 at 11:48, lejohnston <lejohnston at dccnet.com> wrote:
> 
> 
> 
> > I do not budget for funds moving between Asset and Liability accounts. I can not see what purpose that would serve.
> > 
> 
> 
> If the transfer is one-way, it will have a significant effect that you should consider when budgeting. For example, if you have a car loan, the payment goes one way (partly to pay down the loan, partly as interest expense). You won't see that money again, at least not in the short term. So such payments should be considered in your budget.
> 
> On the other hand, the net effect on my chequing account after a month's transactions is approximately zero, so I don't include it in my budget. The same with my credit cards.
> 
> 
> > Perhaps you would budget an Increase in you Savings Account or Retirement (in Canada RRSP) Account, but I am not sure you would budget a
> > 
> > Decrease in your Checking Account. However I deal with this by having an Expense Account called Savings and another called RRSP. In these two cases I have been thinking about starting to use those two Asset Accounts in the budget rather than having Expense Accounts for them. I have not yet thought through how it would work though.
> > 
> 
> 
> Gah! I strongly recommend you don't do that. Savings is an asset. RRSP is an asset or an investment (another kind of asset).
> 
> The budget system more or less works now, even for asset and liability accounts. There is just some confusion about the sign, which is positive or negative when it should be negative or positive. (Or something like that :-) )
> 
> E
> 
> -- 
> 
> 
> Edward Doolittle
> Associate Professor of Mathematics
> First Nations University of Canada 
> 1 First Nations Way, Regina SK S4S 7K2
> 
> 
> « Toutes les fois que je donne une place vacante,
> je fais cent mécontents et un ingrat. » 
> 
> -- Louis XIV, dans Voltaire, Le Siècle de Louis XIV, Chap. XXVI
> 
> 
> 
> 
>