help structure my savings/allowance accounts

[Stephan Brosinski]

Hi,

I'm not sure how to structure my accounts for the following set of transactions. Any help would be welcome.
I changes some account names to simplify explaining the issue.

I have 2 asset accounts - asset:checking and asset:savings. At the beginning of the month I transfer money
from checking to savings, easy enough:

2019-06-01 * "Monthly allowance"
Assets:Checking   -100.00 USD
Assets:Savings      100.00 USD

During the month I will have certain expenses which I'd like to pay with my "allowance" from the savings account,
naturally the amount will be payed from my checking account though, because that's were
the charge will occur, so something like this happens:

2019-06-18 * "Sombody" "Shiny Toy"
Assets:Checking.        -20.00 USD
Expenses:Allowance   20.00 USD

2019-06-22 * "Sombody" "Another Shiny Toy"

Assets:Checking           -10.00 USD
Expenses:Allowance      10.00 USD

So money leaves my checking account, for an "allowance" expense.
Eventually, at the end of the month, I want to have a list of all my expenses I consider a spending of my allowance
and then "pay back" my checking account from my savings account. So this happens:

2019-06-30 * "paying myself"
Assets:Checking    30.00 USD
Assets:Savings     -30.00 USD

at this point the money actually leaves the savings account. Before that date I only know that the expenses charged
on the "Expenses:Allowance" account will eventually leave the savings account.

Any way to structure this better? I was thinking of treating my allowance like a "virtual" credit card which will

have to have a balance of 0 USD by the end of the month, e.g. I keep charging my allowance spendings on it and then
pay it off at the end of the month.

But if I have a post like this:

2019-06-18 * "Sombody" "Shiny Toy"
Assets:Checking        -20.00 USD
Liabilities:Allowance  -20.00 USD

it of course doesn't work because I can't make the sum 0.

Sorry for the complicated explanation, maybe it makes sense. :)

Thank you,
Stephan

[Jason Chu]

This has probably been written better, but I don't think you want to use an Allowance account like that, unless you don't care about the types of things you buy with your allowance. For example, I care if I spend my allowance (in my case I call it discretionary money) on eating out, buying random technology, or going out for drinks.

What you're describing is "The Envelope Method", where you get a certain amount of money each month that you can spending without feeling bad about it.

I recommend using a separate set of accounts where you put ALUSD (Allowance USD) that tracks your allowance spending without actually tracking the money. You add the ALUSD transactions as mirrors of your actual transactions.

Something like

2019-06-01 "Monthly allowance"

  Assets:Checking -100 USD

  Assets:Savings 100 USD

  Income:Virtual:Allowance -100 ALUSD

  Assets:Virtual:Allowance

2019-06-18 "Sombody" "Shiny Toy"

  Assets:Checking -20.00 USD

  Expenses:Technology 20.00 USD

  Assets:Virtual:Allowance -20.00 ALUSD

  Expenses:Virtual:Allowance 20.00 ALUSD

Then you can see how much of your savings counts towards the Allowance by looking at Assets:Virtual:Allowance and the money stays in the actual accounts that you are tracking.

Such a system can get a little hard to keep in sync though, so your mileage may vary.

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[Stephan Brosinski]

I tried something similar as

2019-06-18 "Sombody" "Shiny Toy"

  Assets:Checking -20.00 USD

  Expenses:Technology 20.00 USD

  Assets:Virtual:Allowance -20.00 ALUSD

  Expenses:Virtual:Allowance 20.00 ALUSD

but with both currencies USD. So I was actually tracking the expense twice, which looked bad in reports.

I’ll try again with a “virtual” currency, thank you

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