[moneydance] Envelope Budgeting/Category Balances...

[Stephan Cox]

Probably the thing I like most about the envelope method, is the flexibility with the allocated/budgeted amounts.
If I need some extra money for gas one month, I can choose how much and where the extra money comes from very easily. With budget reports, it was alway harder for me to keep track where I was.  In moneydance I would go into my checking account, and enter the amount I spent at the gas station. Later when going over my budget, I would discover I had gone over budget, oops. Well, I can just use some of the extra money I have budgeted for movies, dining, and gifts. So I would go back and edit the transaction, and choose the 3 different categories. But now I have a transaction at the gas station that came from categories movies, dining, and gifts. When I review my expense report, it was not very accurate, because I spent the money on gas, not on movies, dining, and gifts.

But with envelope, I do a the gas transaction from the gas envelope and select the gas category, so that my expense report still shows accurately how much money I spent on gas. But now I have a negative amount in my gas envelope, and I can't allow that, so I transfer monies from the movie, dining, and gifts envelopes.  Nothing is recorded on the movie, dining, and gift categories, which is correct, because I did not spend any money on those things. So now my expense report is correct for all categories.

Also, I can easily tell how much money I have left to spend on movies, dining, and gifts, because of how much is left in my envelope.

When I was using the normal budget method, and was able to stay within all of my budgeted category amounts, it worked pretty well, but when I had to be over budget in one area, and make up for it from other areas, it became really difficult for me.

----- Original Message ----
From: Brett Russ <bruss at alum.wpi.edu>
To: General discussion related to Moneydance <moneydance-info at moneydance.com>
Sent: Thursday, April 10, 2008 12:50:38 PM
Subject: Re: [moneydance] Envelope Budgeting/Category Balances...

On Thu, Apr 10, 2008 at 9:43 AM, Chuck <chuckf410 at yahoo.com> wrote:
> You may not /need/ reports, but they are helpful in creating the budget for next month. With the reports you can compare the original budget that you did going into April to what you actually used during the month and use that info to forecast to some degree your budget for May.
>
>  This is why I use a separate spreadsheet for my envelope tracking. I'd love to do it within MD but there is no easy way that I have found without sacrificing some other aspect of MD.
>

Couple things:

-what is the advantage of envelope over MD's budget if, by clicking on
the budget graph on the home page, I can instantly see what categories
are over/under budget?  Isn't the end result the same--as soon as I
enter an expense, it will be instantly reflected in either the
envelope sub-accounts OR the budget tracker?  I guess I don't see how
envelope let's you plan ahead any better than the budget does, and
besides that MD wasn't designed for it and doing it seems to tweak the
brain.  BTW, I haven't tried MD 2008 yet, but my understanding is that
budgeting now allows for tracking sub-category expenses in the parent
budget line item.

-Chuck, it'd be super if you could strip the personal info out of that
spreadsheet and pass it along as a template for others to use.
Probably not at the top of your list I'm sure, but I would like to
experiment a bit with the env. method.

"Sell me on envelope" :-)
thanks,
BR
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