[moneydance] Envelope Budgeting/Category Balances...

Wed Apr 9 17:41:53 EDT 2008

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This was actually the first way I thought of doing it.  I then stumbled
onto the forum discussions and someone pointed out the problem of paying
from multiple accounts.  For me this would not be a real big problem.  I
do use two accounts to pay things from, but one of them is for very
specific items, so I would just have those "envelopes" as sub accounts
to that second account.

Now my initial thought, was if I do the sub accounts and use the
categories, then everything (reports etc.) would still work.  The
envelope thing would **mostly** work with only a few quirks. Moneydance
functions, such as reconciling, as you also pointed out, would have a
few quirks.

I hesitated on this approach when I noticed the Categories dialog box
had balances AND you could in fact interact with them just like regular
accounts.  I then remembered the other discussion mentioned and it
seemed like the sub account thing was just extra work when, in the end,
I'd still be using the categories anyway.

I had forgotten that sub accounts would in fact display on the main
page.  That is nice...

Do you use the built in reports and budget stuff?  Does it actually work
along side your spin on envelopes?

Robert Kuropkat

Stephan Cox wrote:
> *This message was transferred with a trial version of CommuniGate(tm) Pro*
> I implement the envelope method using sub-accounts. Here is an example folder structure 
> 
> Checking
> --> Credit Cards
> ----> Visa
> ----> Discover
> ----> American Express
> --> Automobile
> ----> Fuel
> ----> Service
> --> Misc
> ----> Gifts
> ----> Dining
> ----> Entertainment
> 
> My net paycheck gets deposited into the parent Checking account, and then I have another scheduled transaction (that uses splits) called "Stuff Envelopes"; that moves the money from the top Checking account into the different sub checking accounts.
> (ie Checking->Automobile->Fuel would get $60.00 deposited into it)
> 
> If I use the debit card, I enter the transaction in the appropriate account. 
> (ie. If I buy gas, I enter a $33.00 payment in the Checking->Automobile->Fuel account and select the category Discretionary->Automobile->Fuel)
> 
> If I need to transfer money from one account to another, I start at the one I'm transferring from, and select the one I'm transferring to as the Category. (ie. If I have need some more gas money, I'll just not go to the movies by going into Checking->Misc->Entertainment and paying $44.00 to Checking->Automobile->Fuel)
> 
> For credit cards, I transfer money from whatever account the charge applies to (at the same time I record the credit card transaction), and then pay the credit card from there.
> So, here would be a sample scenario:
> Purchases on Discover
> Checking->Automobile->Fuel   $22.00 on 4/2  to Checking->Credit Cards->Discover
> Checking->Misc->Dining $55.00 on 4/4 to Checking->Credit Cards->Discover
> Checking->Misc->Gifts $77.00 on 4/6 to Checking->Credit Cards->Discover
> Payment to Discover
> Checking->Credit Cards->Discover  $154.00 on 4/18 to Discover (set up as a credit card account)
> 
> Any transfer of monies from one sub checking account to another I set the Check# field to "Internal", so that when I'm reconciling, I know that it won't be on the bank statement.
> 
> I like this way, because I can instantly see on my home page what my available balance is for all envelopes.
> 
> ----- Original Message ----
> From: Robert Kuropkat <robert at kuropkat.com>
> To: General discussion related to Moneydance <moneydance-info at moneydance.com>
> Sent: Wednesday, April 9, 2008 2:47:14 PM
> Subject: Re: [moneydance] Envelope Budgeting/Category Balances...
> 
> *This message was transferred with a trial version of CommuniGate(tm) Pro*
> 
> Graham,
> 
> Thanks for your response (and the initial web page).  What you say is
> about what I expected.
> 
> I would like to hear what you derived for the credit card repayment.  I
> had guessed I could continue to use categories (perhaps switching them
> from expense to income or vice versa) so the transfers work right.
> 
> I was thinking about your using income categories and was thinking if I
> left them as expense categories (at the expense of them reading negative
> when I have money to spend as you pointed out) but then thought
> **maybe** the reports and graphs would still work.  I agree it would be
> nice if we could display a category summary on the main page as you suggest.
> 
> I'm thinking I'm going to try your idea, but use the categories as
> designed.  Since I can transfer between categories (even if it is
> slightly non-intuitive which way it goes) I may be able to live with the
> sign change since my goal is to always make it go to zero anyway.  Plus,
> I think some of my own confusion stems from not understanding **real**
> accounting so if I manage to get my mind around that, it will feel
> better.  After all increasing an Expense account is increasing your Debt
> which IS a negative number.  So a negative expense IS cash available.
> Hurts to think about I'll grant, it's like making something MUCH smaller :-)
> 
> I'll share back my experience and we can compare.  For now, I need to go
> pay up since I am sure I'm going to stick with it.  Intuit has angered
> me for the last time so today I switch! (and this coming from someone
> who has used Quicken since version 4 for DOS!)
> 
> Robert Kuropkat
> 
> 
> Graham Borland wrote:
>> *This message was transferred with a trial version of CommuniGate(tm) Pro*
>> Robert Kuropkat wrote:
>>> Just downloaded MoneyDance and looking to crowbar the Envelope Budgeting
>>> System into it.  I found a discussion on the forums for this with this
>>> mention in particular:
>>>
>>> http://moneydance.com/trac/wiki/Envelope_Budgeting
>>>
>>> which outlines basically what I had come to work out myself when I saw
>>> that Categories have a "balance."  My question on the forum and here
>>> [apologies for the cross-post] is what breaks by doing this?
>> I wrote the Wiki page you mentioned, although I haven't really updated 
>> it since my initial attempt. I have been using the technique very 
>> successfully, though, and avoiding MD's built-in budget manager completely.
>>
>> The main problems are:
>>
>> 1. To get the categories showing with positive balances when they have 
>> balance available to spend, they have to be Income categories. This is 
>> unfortunate because then Income/Expense type reports and graphs become 
>> useless. For me personally, this isn't a big deal; all the information I 
>> need for my day-to-day budgeting is contained in the category balances 
>> and transaction history. Some people might find the lack of useul 
>> reporting and graphing capability a deal-breaker though.
>>
>> A solution to this would be to add a new category type, which behaves 
>> like Expense from a graphing/reporting point of view, but like Income 
>> from a balance-accumulation point of view.
>>
>> Or, just keep all the categories as Expense categories, as long as you 
>> don't mind them displaying a *negative* number when you've money 
>> available, and a *positive* balance when you've overspent. For me, that 
>> would be too confusing.
>>
>> 2. Following on from point 1, transferring money between categories is 
>> tricky. For example, you might want to transfer money from your 
>> "Emergency fund" category to your "Car maintenance" category to pay for 
>> some unexpected repairs. To get the money moving in the right direction, 
>> the amount has to go in the opposite column (in the transaction entry 
>> field) from the one you'd intuitively expect, i.e. Deposit rather than 
>> Payment (or vice versa, I can't remember which).
>>
>> 3. The only way to get an overview of category balances is the Edit 
>> Categories window (ctrl-shift-C). This is not particularly easy to use 
>> nor nice to look at. It would be far nicer if categories could be 
>> displayed on the home page, parallel to the real bank accounts.
>>
>> Incidentally, I have also found a neat way to manage repayment of 
>> existing long-term debt. Maybe I'll get around to updating the Wiki page 
>> sometime soon.
>>
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