On Thu, Mar 30, 2000 at 12:28:15PM -0600, Rob Browning wrote:
> Scott Haug <[EMAIL PROTECTED]> writes:
>
> > I'm not sure why you would treat it as a liability, but to be honest
> > I have no accounting background so maybe that is the best way. I
> > just treat my savings goals as bank accounts. They're merely
> > logical accounts used to meet a certain monetary goal, and since the
> > money in a savings goal doesn't actually leave the physical account
> > it was transferred from, I still consider it an asset and "Cash On
> > Hand."
>
> But if you really are transferring the money in gnucash from a bank
> account to a savings account, how can you reconcile with your bank
> statement each month? Those transfers will never show up in the bank
> statement, and so the balance will always be wrong, or am I missing
> something?
Having a "wrong" balance is kind of the point. Its not a real account, its a
virtual or logical account set up so you can "set aside" money for a large
purchase or debt, such as a vacation or school tuition. The balance reflected
in a goal account should indicate to yourself, "that money shouldn't be used
for anything else", and having the goal account's balance factored into the
bank account's balance helps to achieve that. I don't know about anyone else,
but I have a pavlovian reaction when I see a negative balance in my personal
financial app, even if I know I have a positive balance in my actual physical
account.
My original solution was to set up a separate goal account that stood apart
from the bank accounts, and make transfers from the bank account to the goal
account. If I remember correctly, this is more-or-less how quicken sets them
up. The problem is, as both you and Lauren pointed out, is that these
transfers aren't reflected in your monthly statement, making reconciliation
somewhat difficult and confusing. Using quicken, I usually factored that in
and would reconcile those transactions anyway, but I only had one goal account
at a time, so it wasn't too difficult. Multiple goal accounts, however, might
make this more than unreasonable.
Lauren's solution is much more elegant, and it better takes advantage of the
superior structure already in place in gnucash. She suggests setting up a goal
account as a sub-account off a regular bank account, and debiting from the goal
account to a liability account (which makes sense to me, thanks Lauren!) to
represent setting aside money for the goal. The beautiful part is you don't
have to worry about these transactions showing up in your checking account,
since you're never actually touching the bank account. Therefore, monthly
reconciliations would work just like normal, without having to factor in any
goal account transactions. It gets better: the goal account's (typically)
negative balance would be factored into the bank account's balance on the main
window (since it's a sub-account), giving you the desired effect of a
(perceived) smaller balance without any fuss. The only minor downside of this
method is that for it to be most effective, these goal accounts must be tied to
a single bank account, whereas a separate, standalone goal account could
receive transfers from any bank account. But I believe its worth it for not
having to mess with it come reconcilation time.
> If I'm right, then to do "savings goals", we'd probably need another
> abstraction. Maybe you'd have a "real balance", used for
> reconciliation, that ignores savings goal transfers, and then the
> "normal balance" that gnucash shows you by default that includes the
> savings goal transfers. This would probably require a new account
> type and some ugly, and possibly incorrect, monkeying around in the
> engine. Not sure off the top of my head...
I don't think this is necessary. As mentioned, making a goal account a sub
account of a bank account (so many accounts!) is almost a perfect solution, and
doesn't require any code changes to gnucash, since its framework has been so
well designed! A new account type wouldn't hurt to help delineate a goal
account from a bank account, but it would have the exact same semantics as a
bank account and would be a different account type in name only.
Anyway, I don't think these goal accounts would be used enough by most people
to deserve drastic, confusing changes to the stable structure already present.
What we have is sufficient. What /would/ be useful would be a druid that could
step people through setting one up, creating the requisite sub-bank
account/liability account combo. But it would basically just automate
something that isn't all that difficult to do manually.
> --
> Rob Browning <[EMAIL PROTECTED]> PGP=E80E0D04F521A094 532B97F5D64E3930
-Scott
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