[moneydance] still working on setting up my MD accounts and have a few questions...tnx

[Yehudit Winiarz]

On 7/6/07, Edward Reid <edward at paleo.org> wrote:
>
> Please warn us when you post the same request to both mailing lists.
> Someone might have replied on the "other" list and that won't be visible
> here.


My apologies for not warning you before. Note taken for the future.

At 17:39 07/04/07 -0400, Yehudit Winiarz wrote:
> >1. Is a CD an asset, investment, or bank account? Where do you enter
> >the interest rate for such an account?
>
> I don't think there's anything automatic, though I'm not sure. I would
> just
> treat it as a savings account (bank) and enter interest when I received a
> statement. That's how I handle interest-bearing savings accounts.


Bryan seems right about a CD being a security, as one is able to select it
from the drop down list, although I had first set it up as a bank account as
a second person had suggested as well. However, I don't really know about
securities, and am unsure what information to provide in regards to a CD
when adding a security? It asks for Security ID, Name, Ticker symbol (which
I presume isn't applicable here, but rather for stocks and bonds), etc. It
won't let me enter the CD without a security, so I am still a bit lost here.

>2. If I want to have an expense for my savings (ie. I would put $X.XX
> >in from every paycheck or month) and I would want it to show up in my
> >budget, be deducted from my income and be credited to my savings
> >account. How can I accomplish this?
>
> Budgets are for transfers in and out of your ownership. When you transfer
> to a savings account, you still own the funds, so it's not represented in
> budgets.
>
> The above is a statement of the current MD feature. There's been a lot of
> discussion about this here (A LOT) and you may find suggestions in the
> archives. Clearly some kind of cash flow projection is needed that's not
> strictly budgeting.


OK, after playing around a little bit, I understood how the double-entry
works in this area when you select another account instead of an expense,
but I agree that it may be helpful to also be able to track it as an
expense. Additionally, I haven't found out how to search the board, as the
main chart only allows me to view a month at a time, by either date, thread,
author, etc. If you know of one, it would be helpful if you could provide
it.

Brain had suggested setting up a reminder transaction, which someone else,
on the other board, had also suggested. I have decided to come back to
learning that part a little later, as I'm still trying to get most of the
basics down first.

>3. Do I need to mark all of my main accounts (checking, savings,
> >investments, loans, etc.) as children of the root account? What
> >happens if I don't?
>
> They have to be the child of some account. You can leave them all children
> of root -- most of mine are. Grouping them under some other account
> provides some additional features, such as showing the sum of the grouped
> accounts on the home screen and being able to reconcile them as a single
> account. (The latter applies when they are really one account at the bank
> and you maintain separate accounts for your own bookkeeping purposes.)


So, If I don't set them up as children of root, then they will throw my net
worth and current balances off, right? I seem to wonder if it could also
happen if I *do* set everything up under root account, like it might be
calculated twice or something and make me think that I'd have more money
than I really do.

>4. I have a student loan I have been working on paying off. When I
> >set it up, is the principal, the total outstanding, or just the
> >principal? If just the principal, how does MD know how much interest
> >has accrued before July 1st? Which type of account is the 'interest
> >account' field for? What is an "Escrow Account", and is it applicable
> >here?
>
> IIRC, setting up a partly paid loan in MD is nearly impossible. "Total
> outstanding" is not a standard term. You want to set up the principal as
> the current payoff balance -- what you'd pay if you walked into the lender
> today and paid it off -- and the number of payments as the number of
> payments remaining.


Sorry, "total [amount] outstanding" was a term I got from my lending
institution's website. It was used to describe the "Outstanding principal
balance" plus the "Accrued Interest."

I think that "interest account" is now labelled "interest category". It's
> just the category you want the interest charged to.


So, it's an expense category from what I've gathered. Thanks, it seemed
confusing at first. I didn't know if it was for the source of the payment or
which expense category it fell into.

"Escrow account" applies to mortgages. Mortgage lenders usually have you
> pay monthly amounts, over and above principal and interest, to cover
> insurance and taxes. (PITI is the standard acronym for the total payment.)
> This is to protect the lender, though many borrowers find it convenient
> because they don't have to bother with the extra bills. Some excess
> balance
> builds up, and this is your escrow account, from which the tax and
> insurance bills are paid.
>
> To reconcile that account, you have to not only set up part of your
> mortgage payment to be transferred to the mortgage account, but also enter
> the tax and insurance payments when the lender notifies you of them. If
> you
> don't want to bother with that -- and have no need to track the separate
> expenses paid from escrow -- then you can probably just put some
> miscellaneous expense category for the escrow. Your lender will provide an
> end-of-year statement detailing the payments, which you can use if needed
> for income tax -- in the US the property tax is usually deductible.
> (Currently I'm sitting on the fence. I'm maintaining the escrow account in
> MD ... and telling myself that someday I'll go back and enter those five
> years of payments. And meanwhile using the EOY statements for tax
> purposes.)
>
> (As an aside, escrow accounts were once badly abused by many lenders, who
> forced borrowers to keep large amounts in escrow and didn't pay interest.
> Most places now regulate the amounts and interest rates on escrow accounts
> to avoid these abuses.)
>
> But since you're not talking about a mortgage loan, you can probably
> ignore
> the escrow.


OK, I appreciate the info!

Thank you again,
Yehudit