Wow... I can't tell you how much I appreciate you putting all that effort into such an excellent and informative post. Things are, very much, crystal clear now.
Your setup is conceptually similar to what I was trying to achieve, but I got confused by all the buckets and I most certainly violated some of the rules you stipulated. I know for certain that I on at least one occasion transferred money from "below the line" to "above the line" without assigning the transaction to any buckets. Too late to fix now, what with all the juggling I performed in order to align things again (I wouldn't know where to even begin to undo it all), but now that everything's aligned I'll most definitely keep this in mind going forward. So, once again, thanks! :D On 9 Jun, 13:13, The Watkinson Family <thewatkins...@mac.com> wrote: > There must be something else going on here.... > > Adding money to a savings expense bucket has the same net effect as > adding money to an income bucket. > > Look at this way... I could "unspend Savings" and put the money back > into the Savings bucket that I took out. Or I could put the money > into an income bucket and then move it to the Savings bucket--either > way has the same net effect. > > Here's another area where the problem may lie. There are two sides to > each transfer--the withdrawal, and the deposit. In MoneyWell, it is > possible to assign either side of the transfer (or even both sides) to > a bucket. While each transfer presents three options for assigning > the transfer to a bucket (withdrawal side, deposit side, and both > sides), these three options do not produce the same results. > > Let me try to step through the process that you should be using to > track your Savings: > When Allocating Income each month, you should be assigning money to > your Savings bucket. This bucket represents the amount of money that > you plan to transfer into your Savings account. > When you are ready to transfer funds from checking to savings, you'll > create a transfer from Checking to Savings, assigning the withdrawal > side of the transfer to your Savings bucket. At this point, your > Savings bucket should be at 0 (you don't have any more money to > transfer to Savings) > If you need to use money from Savings, you'll transfer the money from > your Savings account back into Checking, assigning the deposit side of > the transfer to a bucket. There are merits to using income buckets or > expense buckets, but the choice is up to you. Using an income bucket > allows you to use the Allocate Income feature to disburse the money to > expense buckets. > > Here's how I set up my MoneyWell document in order to keep all this > stuff straight: > First, I decide how much cash I have on hand to fund my spending > plan. Some people might prefer to include Savings accounts balances > in this formula, others may not. You would also include the balance > on certain kinds of credit cards. Any credit card that you use on a > recurring basis each month, paying the balance each month should be > included in this formula as well. I refer to these as Spending Plan > Accounts. I might also refer to it as cash on hand/cash available. > Second, I decide how many other accounts I want to track in > MoneyWell. This could include additional Savings accounts, money > market accounts, credit cards (accounts I don't pay off each month), > auto loan balances, retirement accounts, home mortgage, etc. These > accounts affect my net worth and are of enough concern to me to track > on a monthly basis, but they do not contribute to the money that I > have on an on-going basis to pay for groceries and other monthly > expenses. > I'll set up the MoneyWell document like this: > > Spending Plan Accounts > --------------------------------- > Other Accounts > > Note: The -------------------------- above is an account that I use > as a divider between the two types of accounts that I simply provide > the name of multiple dashes. > > Setting up MoneyWell in this way provides a quick reminder to me how I > should assign to transfers to buckets. There are three rules to follow: > When transferring funds on the same side of the line, do not assign > the money to a bucket on either side of the transfer > When a transfer crosses the line in a downward direction (from a > Spending Plan Account to an Other Account), assign the withdrawal side > of the transaction to an bucket. This money is treated as though it > is being "spent" by your cash available on your other other accounts > When a transfer crosses the line in the upward direction (from an > Other Account to your Spending Plan Account), assign only the deposit > side of the transfer to a bucket. This money is being treated as > income from your other accounts into your cash available. > > There are two rules for spending money: > When spending or depositing money from/to an account that is above the > line, you always assign the transaction to a bucket. > When spending or depositing money from/to an account that is below the > line, you never assign the transaction to a bucket. In MoneyWell, > you'll need to select "make bucket optional" on the transaction so > that it isn't identified as an unallocated expense. > > Let me provide a few practical examples. Here is your setup. > > Checking Account > Credit Card 1 > Savings Account 1 > ------------------------------------ > Savings Account 2 > Credit Card 2 > Auto Loan > Retirement Account > Home Equity Line of Credit > > Note that at all times the total amount of money in all your buckets > (income and expense) should equal the amount of money in the accounts > above the line (Checking Account, Credit Card 1, Savings Account 1) > > Examples: > You buy groceries that you have accounted for in your spending plan > with you Checking Account debit card. You'll assign this transaction > to a bucket (Spending Rule 1) > You go to movies using Credit Card 1. You've planned for this expense > in your spending plan, and you'll assign this transaction to a bucket > (Spending Rule 1) > Your retirement account grows in value--you will not assign this > deposit to a bucket. The money you have to spend on a monthly basis > has not changed, only your net worth has changed (Spending Rule 2) > Interest is assessed against your Home Equity Line of Credit. You > will not assign this expense to a bucket. This has not effectively > decreased the amount of money you have to spend each month (though you > may need to consider making adjustments and increasing how much you > allocate towards debt reduction). Spending Rule 2 > You make a credit card payment from Checking Account to Credit Card > 1. You should not assign either side of the transfer to a bucket (you > didn't cross the line). The amount of money that you had available to > spend during the month hasn't changed. You still have the option to > make monthly expenses on your Credit Card 1 or your using your > Checking Account (Transfer Rule 1) > Why do I have two credit cards? One credit card you might be using > and paying off each month (Credit Card 1). The other credit card > (Credit Card 2) may have a balance that you'll pay-off over time. > You'll treat this account like a loan account and use a debt reduction > expense bucket to track allot payments to it. You would not want to > use Credit Card 2 anymore for your spending plan purchases. Treat it > like a loan and just pay it off, but do not charge anything on it. > When you make a payment towards Credit Card 2, you'll need to assign > the withdrawal side of the transfer to a bucket. You may need to > adjust balances inside of Credit Card 2 to accurately reflect the > outstanding balance after interest is applied (Transfer Rule 2) > You set aside money from Checking Account to Savings Account 2. You > assign the withdrawal side of the transfer to a bucket. This > effectively reduces the amount of money that you have available to > spend in the month (Transfer Rule 2) > You make a car payment from checking. You assign the withdrawal side > of the transfer to a bucket. You may have to additional adjusting > your Auto Loan account to accurately reflect the amount by which your > auto balance has decreased (Transfer Rule 2) > Why do I have two Savings Accounts listed above? In order to take > advantage of higher interest rates, you might have a Savings Account 1 > that you use to make frequent money transfers during the month, but > you consider the money in this account available for monthly expenses > and you track it using your spending plan. I use such a Savings > Account for Christmas Gifts, Insurance premiums, tax vouchers. In > general, any type of expense that I need to save for multiple months, > I'll set aside in a Savings account. Since I want to track the money > that I have in Savings with buckets, I'll keep it above the line. I > estimate how much money I actually spend on a monthly basis, and I > transfer what ever is left to Savings Account 1. This transfer is not > assigned to a bucket. If I make an insurance payment, I might need to > transfer some money back to my Checking Account to cover the amount. > This transfer is not assigned to a bucket (Transfer Rule 1) > When you make an investment into your Retirement Account from > Checking, you'll assign the withdrawal side of the transfer to a > bucket, reducing the amount of money you have to spend (Transfer Rule 1) > When you retire and are ready to start paying yourself from your > Retirement Account, you'll transfer money from Retirement Account to > Checking, assigning the deposit side of the transfer to a bucket. > This will increase the amount of money that you have to spend > (Transfer Rule 3) > When you increase your Home Equity Line of Credit balance in order to > pay for an emergency, you'll create a transfer from your HELOC to your > Checking Account. This effectively increases the amount of money you > have to spend, and you'll assign the deposit side of the transfer to a > bucket (Transfer Rule 3) > > I hope this helps clarify things. > > Grace to you, > Blair Watkinson > > On Jun 8, 2009, at 10:38 PM, Druzyne wrote: > > > > > > >> What I basically did, was transfer an amount of money equal to what > >> was overspent in my expense buckets from my savings account, > >> registering this in an income bucket. I allocated the money to the > >> expense buckets, and then transferred all of the money back to the > >> savings account. > > >> I basically conjured up spendable money out of nothing. :S I'm > >> confident that the fault lies with my bookkeeping and not with me > >> actually overspending, but I'm still interested in finding out where > >> my logic fails here. > > >> The one thing > > ... > > les mer » --~--~---------~--~----~------------~-------~--~----~ You received this message because you are subscribed to the Google Groups "No Thirst Software User Forum" group. To post to this group, send email to no-thirst-software@googlegroups.com To unsubscribe from this group, send email to no-thirst-software+unsubscr...@googlegroups.com For more options, visit this group at http://groups.google.com/group/no-thirst-software?hl=en -~----------~----~----~----~------~----~------~--~---
