We're getting into nebulous, philosophical territory, but I'll take you up on your position.
By putting cash into an envelope, it's allocated and is now an obligation. If you have made the decision to abide by the purpose of allocating monies to envelopes, then you understand that the cash you've put in the envelope is committed. You're now obligated to use it for that purpose. In my CofA, "Budgets" is a top-level account and all budget accounts are sub-accounts of that -- including budgeted cash. As such, it's balance should always be "0". It actually works quite nicely! On Sun, Feb 4, 2018, at 8:34 AM, Adrien Monteleone wrote: > If the money is physically divided into envelopes, or left in some bank > account and ‘segregated in place’ then it IS an asset. > > If this allocation is merely virtual and has no relationship to where it > actually exists, then it isn’t ANY of the top level accounts, certainly > NOT a liability. You don’t owe that money to anyone. A liability is an > accrued expense, that is, an expense you owe but haven’t paid yet. > > Sure, you haven’t paid budgeted expenses yet, but you don’t owe money > you’ve budgeted. No one has any claim on your assets for that amount. > > At best, it is your own claim against your own assets, which would make > it an element of Equity. But even that is problematic as tracking it > appropriately results in the temporary inflation of both assets and > equity until the money is actually spent on expenses. > > This is why I stopped using GnuCash for the purpose, and why, although > I’d like this functionality to be in the same place, I think I’m more of > the opinion as expressed on gnucash-devel that the proper way to handle > this is export my revenue and expense transactions into some other app > that handles the budgeting according to the method I desire to use. > > It just can’t be shoehorned properly into the standard top level account > structure. > > Regards, > Adrien > > > On Feb 4, 2018, at 5:44 AM, Edward Bridges <ebrid...@eqbridges.com> wrote: > > > > I understand your concern, but I don't think that would be the > > case here. > > They may be included in the net worth but because all entries net to > > zero they are balanced and they have no net effect on net worth. > > The issue I've seen with previous proposals both here and in the > > mentioned blog post is that income allocated to envelopes is treated as > > an asset -- which it really shouldn't be. By treating it as a liability > > you can balance that allocated income to expenses as they get allocated. > > > > On Sun, Feb 4, 2018, at 1:21 AM, Christopher Lam wrote: > >> 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" <ebrid...@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. > >>> > >>> > >>> > >>> > >>> -- > >>> Sent from: > >>> http://gnucash.1415818.n4.nabble.com/GnuCash-User-f1415819.html>> > >>> _______________________________________________ > >>> gnucash-user mailing list > >>> firstname.lastname@example.org > >>> To update your subscription preferences or to unsubscribe: > >>> https://lists.gnucash.org/mailman/listinfo/gnucash-user > >>> If you are using Nabble or Gmane, please see > >>> https://wiki.gnucash.org/wiki/Mailing_Lists for more information.>> ----- > >>> Please remember to CC this list on all your replies. > >>> You can do this by using Reply-To-List or Reply-All. > > > > _______________________________________________ > > gnucash-user mailing list > > email@example.com > > To update your subscription preferences or to unsubscribe: > > https://lists.gnucash.org/mailman/listinfo/gnucash-user > > If you are using Nabble or Gmane, please see > > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > > ----- > > Please remember to CC this list on all your replies. > > You can do this by using Reply-To-List or Reply-All. > > _______________________________________________ > gnucash-user mailing list > firstname.lastname@example.org > To update your subscription preferences or to unsubscribe: > https://lists.gnucash.org/mailman/listinfo/gnucash-user > If you are using Nabble or Gmane, please see > https://wiki.gnucash.org/wiki/Mailing_Lists for more information. > ----- > Please remember to CC this list on all your replies. > You can do this by using Reply-To-List or Reply-All. _______________________________________________ gnucash-user mailing list email@example.com To update your subscription preferences or to unsubscribe: https://lists.gnucash.org/mailman/listinfo/gnucash-user If you are using Nabble or Gmane, please see https://wiki.gnucash.org/wiki/Mailing_Lists for more information. ----- Please remember to CC this list on all your replies. 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