Hi Daniel,
As Treasurer of our church, I do something very similar.
This is how it works:
- A parent asset acct 1120 is called "Checking acct after reserves"
- a child acct 1121 is called "Checking acct"
- another child acct 1122 called "Reserve for property tax"
- another child acct 1123 called "Reserve for elevator maintenance"
In the church's case, the reserves are for:
- property tax on the parsonage, which is due every 6 months
- big elevator maintenance work required every 5 years
The acct codes (1120, 1121, etc) help a LOT to keep this clear in the
chart of accts. I'd suggest using acct codes for all accts. See for example:
double-entry-bookkeeping.com/coa/chart-of-accounts-numbering-system/
... or search on "typical chart of accounts numbering system"
Then I take the property tax amount divided by 6 months, and
the estimated elevator maintenance bill divided by 60 months ie 5 years -
... and set up monthly Scheduled Transactions, which:
- CREDIT the "Reserve for something" acct
- DEBIT the appropriate expense acct
... for the amount needed monthly, to have money available to
pay these bills when they come up.
So the "Reserve for something" accounts -which are asset accts- usually
have a negative (credit) balance. This is the amount which has been "set
aside" towards the known upcoming expense.
The expense actually shows up monthly, instead of a big lump at 6 months
for property tax, or at 5 years for the elevator maintenance.
When the "big lump" bill comes due and I pay it, the transaction is:
- CREDIT the checking acct, from which I write the check to pay it,
- DEBIT "Reserve for something" ... which brings the "Reserve" acct
balance back to zero (or pretty close).
Note that this debit does NOT go into the expense acct - because the
expense has already been booked monthly.
So looking at these acct balances in a typical month, it might look like
this:
1120 "Checking acct after reserves" = $6,000 (PARENT)
- 1121 child acct "Checking acct" = $7,250
- 1122 child acct "Reserve for elevator" = -$1000 (Negative balance)
- 1123 child acct "Resv for property tax" = -$250(Negative balance)
What this means:
- 1120 the PARENT "Checking after reserves" is that portion of the
checking acct available for everything else ... AFTER what's been set
aside for the next 5-year elevator maintenance and the next 6-month
property tax payment.
-- 1121 child "Ckg acct" is the ACTUAL amount in the checking acct.
... This is the acct into which I book all deposits and checks
written; and which I reconcile with the bank's statement each month.
-- 1122+1123 "Reserve for XXX" acct's are the amounts "saved up
for" the upcoming big-lump payments, which show up as a negative number.
I coded 1120 "Checking after reserves" as a "placeholder" acct, so it
does NOT show up as a choice when I'm entering transactions. I will not
ever normally enter a transaction directly into this acct.
Everything goes into the actual checking acct 1121, or the reserve
acct's 1122 + 1123.
Hope that helps and God bless!
Chris
------------------------------------------------------------------------
On 8/5/24 12:00, gnucash-user-requ...@gnucash.org wrote:
Message: 3 Date: Mon, 5 Aug 2024 13:27:22 +1200 From: Daniel Sheffield
<d.j.yo...@gmail.com> To: gnucash-user@gnucash.org Subject: [GNC] Fund
management without an actual account Message-ID:
<CAGBFyFUc8nZAFzAbyTWcUWc3QmgRNvJEeBp=hsjz-7a6_y+...@mail.gmail.com>
Content-Type: text/plain; charset="UTF-8" Hi, I'm using gnucash to
manage my personal finances. ... BUT I'm trying to keep track of
savings towards a goal, but without opening an actual account or
making any real world transactions to achieve it. ... Cheers, Daniel S
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