Future allocated money vs Budgets

Christopher Lam christopher.lck at gmail.com
Sun Feb 4 01:21:19 EST 2018


Looks nice. My main concern with these "shadow accounts" is that they will,
by default, be counted in the Net worth reports, income reports, etc, and
must be manually deselected every time.

In my view budget allocations are technically "outside the books" and must
therefore ideally be recorded in ways that don't affect the everyday data
and reports.

On 4 Feb 2018 8:43 AM, "ebridges" <ebridges at eqbridges.com> wrote:

> 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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