GnuCash and Budgeting

Hans Fugal hans at fugal.net
Tue Sep 20 09:26:25 MDT 2005


You bring up some interesting points. If you define budgeting as "lay
out a set of rules for what can be spent where" then I agree it's mostly
useless. But I think of budgeting as an iterative improvement on last
month, and a predictor for this month. e.g. looking at what we've spent
in recent months we can get a good idea of what we will spend this
month, and if we want to save a little more, or set some aside for our
six mp3 players, or eat out more often, we iteratively adjust the
budget. Some things like savings or cash for eating out we might take
out at the beginning, the rest we make a valiant effort to remember and
follow until the next budget evaluation. I believe a budget like this is
useful in two ways: a wake-up call as to what you are really spending on
dining, gas, movies, mp3 players, etc. and a way to help yourself
figure out how to leverage the money into something you really want
instead of just "whatever it got spent on."

As for gnucash, the subaccounts idea is nifty, and the best I've come
across so far, but it breaks down when you have multiple accounts,
unless you always pay for certain budget categories from certain
accounts. e.g. do you want to be restricted to paying for movies only
from this checking account and not from the other? Many of us only have
one checking account, or one main one, so it might still work. I'll have
to ponder giving it a try, but for now I'll stick with my spreadsheet.
gnucash has been saying they'll do budgeting Real Soon Now for a very
long time, I hope they really are serious this time.

On Tue, 20 Sep 2005 at 09:09 -0600, Nicholas Leippe wrote:
> On Monday 19 September 2005 07:00 pm, Ross Werner wrote:
> > On Mon, 19 Sep 2005, Grant Shipley wrote:
> > > On 9/19/05, Greg Hill <greg at kathihill.com> wrote:
> > >> I'm kind of tired of getting dozens of emails every day that have
> > >> nothing to do with the purpose of this mailing list.  The guy asked
> > >> about a friggin mp3 player and we have at least 50 emails arguing about
> > >> budget/saving strategies.  Sheesh.
> > >
> > > I do my budget and saving planning in gnuCash.  Is the thread
> > > considered on topic now? :)
> >
> > Speaking of gnuCash (and doing my part to swing the thread back on-topic),
> > does anyone have any suggestions for good Linux software for budgeting?
> > GnuCash is great, but (at least as far as I know) it doesn't have any
> > budgeting capabilities.
> >
> > All I'm looking for is the ability to have several categories, and when I
> > get a paycheck, put money in the categories, and when I spend money, take
> > it out of one of the categories. Any success stories?
> 
> The gnucash developers have discussed this, and something is in the works for 
> the near future.  There already exists patches to create 'virtual' accounts 
> that can do what you want.
> 
> For myself, I used to budget religiously, and was quite disciplined growing 
> up.  But, I found that it became quite tedious very quickly when I got 
> married.  Then a friend gave me a book by David Bach, "Automatic 
> Millionaire" (http://www.finishrich.com), which was the most _practical_ 
> discussion of saving money I had ever read.
> 
> He observed that very few people can actually stick with a budget--so few that 
> it renders trying nearly futile, and the idea of a budget not a good one.  He 
> observed that most people always spend what they have anyways.  His solution, 
> which I've found works well, is to make it automatic--make the decision to 
> save once, and automate the mechanism so you don't have to keep making the  
> decision every day.  Set up automatic payments for every bill.  Set up 
> automatic deposits into your savings vehicle of choice (money market, savings 
> account, IRA, etc).  Make it difficult to reach the savings (not 
> impossible--just as inconvenient as necessary for yourself to keep you from 
> dipping in whenever).  Then, just live.  Ignore budgeting, spend the rest as 
> you would anyways, and be happy knowing that your savings plan is working 
> without continual effort.
> 
> When you get an increase in income, divert at least a percentage, perhaps all 
> to your automatic savings plan--help it grow faster.  Just keep living.
> 
> 
> Now, rather than do any sort of budgeting, I just do a speculative cash-flow 
> by inputing estimates of all of my known bills and expected income into my 
> gnucash accounts, to make sure it's all covered.
> 
> 
> -- 
> Respectfully,
> 
> Nicholas Leippe
> Sales Team Automation, LLC
> 1335 West 1650 North, Suite C
> Springville, UT  84663 +1 801.853.4090
> http://www.salesteamautomation.com
> /*
> PLUG: http://plug.org, #utah on irc.freenode.net
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> Don't fear the penguin.
> */
> 

-- 
 Hans Fugal                 | If more of us valued food and cheer and
 http://hans.fugal.net/     | song above hoarded gold, it would be a
 http://gdmxml.fugal.net/   | merrier world.  
                            |         -- J.R.R. Tolkien
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