[mikekchar]

Double entry accounting basically makes it easier for you to track down errors in your accounting. It's a bit like writing tests for your code. The advantages are: 1. You are usually alerted quickly when you make a mistake. 2. You can reason about where you made the mistake, even if you've lost the original documentation.

It's not so much that it's personal or business that's the issue, I think. It's more the consequences for making a mistake. When I was very poor (but luckily not in debt) I had a good system for controlling my spending. I would take out X amount of money every Monday. I would try to have some left at the end of Sunday (a couple of hungry days helped me understand the importance of being conservative in my estimation).

That system works fine (and would even work fine in some kinds of businesses). However, what do you do when you find that no matter what you do, you can't seem to get to Sunday without running out of money? What if you can't figure out where it is going? Some kind of accounting will help you figure out what you are spending your money on.

Doing the accounting is fine and most of the time it's not a big deal if you make a mistake here or there. However if you are really pressed for cash (like you won't eat on the weekend if you make a mistake), it's probably not a bad idea to record your expenses in a way that allows you to detect mistakes. If your weekly transit pass is $50 and you accidentally record $5, you might conclude that you have $45 every week more than you actually have. You'll eventually figure it out, but it will mean more missed meals than you probably want to endure.

I like living a lifestyle where I make enough and spend little enough that I naturally have enough money. For me, that's my definition of "rich". After I got married, that state of affairs seems to have disappeared from my life ;-) Trying to reason about where the money is going is surprisingly tricky and double entry accounting has helped me make good conclusions without enduring stupid mistakes. Not necessary, of course, but still useful if you are the kind of person who likes fiddling.