No problem... another way to summarize all the rules would be: Always assign deposits/withdrawals in accounts that are above the line to a bucket. Never assign deposits/withdrawals in accounts that are below the line to buckets.
This general rule would apply whether the transaction is a part of a transfer or simple debit or credit. Grace to you, Blair Watkinson On Jun 9, 2009, at 8:00 AM, HenrikWL wrote: > > 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 ยป > > --~--~---------~--~----~------------~-------~--~----~ 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 -~----------~----~----~----~------~----~------~--~---
