Future allocated money vs Budgets

[ebridges]

Sorry for the delayed response, just managing to catch up on this thread.

I've been looking at how to do envelope-style budgeting for my personal
finances using GnuCash for about 6-7 months.  Like you, this began with this
article from 2008 "[Better Budgeting with
GnuCash"](http://allmybrain.com/2008/12/15/better-budgeting-with-gnucash/).

After toying around with that approach, I decided there were two drawbacks
to it:

1. It was tedious.  Manually creating a split for every expense to draw down
budget accounts ("envelopes") that were allocated previously, was super
boring and error prone.  In addition, because of the detailed nature of
doing this work, one would be discouraged from allocating all of your income
to different "envelopes".
2. It was fragile.  By treating "Budgeted Cash" as an asset made allocated
money difficult to reconcile to money that was drawn out of your budget
accounts.  A useful insight in that article is to consider a budget account
as a liability.  However, it categorizes budgeted cash as an Asset, when it
is more useful to consider it also as a liability.  Doing so allows you to
reconcile allocated money to monies spent out of the "envelopes".

For the past month, I've been able to apply an approach to my existing
reconciliation process that I believe will prove to be a very useful and
easy to manage approach to envelope budgeting for personal finance.

To simplify allocating income and expenses to envelopes I use two tools:

* [QifQif](https://github.com/Kraymer/qifqif) which makes it easy to quickly
insert categories into a QIF file;
* [qif-split](https://github.com/ebridges/qif-split), a tool that I wrote,
which adds splits to QIF files according to some rules defined in a file.

After downloading transactions for my credit card & bank accounts in QIF
format, I first process the file with QifQif to match up every transaction
to one of my accounts from GnuCash.  QifQif supports using wild cards and
regexes for matching payees to accounts, and then adds the account as a
category to the QIF transaction.  

After categorization of the transactions, the files can be processed by
`qif-split`, and split according to predefined rules.  

I have been using `QifQif` for about a year, and have found it to be very
reliable and easy to work with.  In the past month, I began using
`qif-split` to allocate income and expenses to budget accounts.

The `qif-split` configuration rules splitting the incoming transactions are
twofold

1. Allocating income as credits to various envelopes, or 
2. Allocating expenses as debits to those same envelopes.  

These allocations are balanced with corresponding debits or credits to a
"Budgeted Cash" account.  Because of these balanced entries, the toplevel
"Budgets" account will always self-reconcile (i.e. its balance will always
be 0).  When the balance of a given budget subaccount ("envelopes") is
negative, then you've overspent that category.

By using `qif-split` to automatically generate split transactions, and by
altering my chart of accounts to roll up budgeted cash alongside the
budgeted expenses it makes envelope-style budgeting very straightforward in
GnuCash.




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