[viceroyalbean]

Does anyone have a good workflow for recording personal finances with this type of tool? My problem is that recording every single transaction becomes tedious, so I end up not doing it and the ledger gets out of sync, making it even more tedious to catch back up in a vicious cycle. I'm considering not tracking individual payments and instead just the total monthly changes so I at least have an up-to-date net worth calculation

[jldugger]

My workflow:

1. Lots of scheduled transactions. Rent, cable bill, paychecks, car insurance premiums, quarterly estimated tax payments, etc. Any transaction you can expect and guess at can be a scheduled transaction. This really cuts down on the catch-up work.

2. Transaction import. A lot of what's left after #1 is the random unpredictable expenses go on a credit card, and most of those support OFX or quicken format data downloads. As you import that data, it should be able to match up official records with what you had written down, and if different "update and record."

3. Monthly reconciliation. At the end of the month, review all the statements you get with your records using the reconcile window. If I'm lazy, I can skip liabilities and investments for a month as long as my main checking account is correct and CC payments for next month reflect their most recent billing statements.

[Vohlenzer]

I too got bored of having to go through every little transaction and categorising them according to my budget. I had already simplified my expenses budget down to three categories; essentials, luxuries and goals.

My solution was to open a dedicated current account and or credit card for each category. This makes assigning a category to transactions simple because I know which budget category each account is designated to.

This also helps with day-to-day budgeting because I have setup scheduled transactions to top-up my essentials and luxuries bank accounts with the correct amount of funds from my savings. A side effect is the stark reminder that using the credit cards eats away my goals budget because I've already spent my allocated funds for essentials or luxuries.

One downside here is losing the credit card protection on some purchases. The work around is to transfer funds back to savings when making these purchases. Another is that it's difficult to adopt immediately because opening several accounts may affect credit rating or rouse suspicion from financial institutions.

[kqr]

Do you really need full double-entry accounting for personal finances? This usually boils down to either

- you need it for tax/legal/bureaucratic purposes, or

- you are really short on money and you need to keep track of it down to the last cent.

When either of those two conditions are true, double-entry is amazing.

If the above are not true (and it sounds that way based on your comment) then I would do it statistically.

Determine how much time you would like to spend recording transactions. Let's say it's 1/11 of the time it takes when you are doing a full accounting. (Eleven is good because it's prime, so it's less likely to accidentally line up with cyclic transactions.)

Enter all expenses/incomes only every eleventh day. Nothing the other days. You have to be really strict about this!

Instead of entering the actual number, though, multiply it by 11.

Tadaa! After a while, you have practically the same result but at a fraction of the effort (roughly three times per month instead of 30.)

Note that the number you get will have some sampling error. For bonus points, you can calculate the size of this. Depending on how large the variation of your expenses is and how often you enter them, it's not unreasonable to get a sampling error where three standard deviations are ±50 % -- are you okay with a rough estimation like that? If not, you have to sample more often.

More technical note: what I've described is actually a stratified sampling scheme, only once you've sampled a day, you do a full accounting of the transactions within that day. Depending on the practical structure of your transactions, you might find that you can optimise your sampling scheme (lower sample error and/or less effort) by selecting more days, but only entering one transaction from each day.

Read up on sampling! It's powerful!

[viceroyalbean]

> Do you really need full double-entry accounting for personal finances?

Probably not, which is why I'm not actually using it right now. My main use cases are keeping track of various types of assets and liabilities (bank accounts, stocks, apartment deposit, etc) to track my net worth as well as having a general idea of where my money goes, e.g how much I spend on groceries as opposed to eating out.

The statistical sampling approach sounds very interesting, thanks for the tip!

[jrumbut]

I would love to see an accounting system that was designed for this kind of uncertainty or incomplete data in general. For instance, allow me to say that there's about $5000 in the odd account with no API access or that I spend about half the cash I withdraw from the ATM on restaurants.

In tools that I've tried, they've all been finely tuned to down-to-the-penny precision and capturing all data.

[xupybd]

If you get out of sync just put in fake transactions to get it to balance and start again.

[patrick451]

For several years, I tried keeping track of each expense, using both quicken and gnucash. I found the same thing as you: entering each transaction is too tedious. If I got real benefit from it, I'd have stuck with it, but honestly I never found the data actually useful. Currently, I've adopted your idea, and just track basically month-to-month net worth in a simple spreadsheet. Even that is more of a motivational tool than something that provides actionable data.

This maybe different for everyone. Currently, I'm fortunate to be saving about 80% of income. But even a decade ago when I was much more in a paycheck-to-paycheck situation, I didn't know what to do with this per-transaction double entry data.

I also think that the entire design of accounting software, where you assign a given expense to a specific category ("groceries", "fuel", "household", "vacation") is too limiting because they are artificially orthogonal. What if I have a "fuel" category and a "vacation" category, but I'm filling up on vacation? Same with groceries, but it's even worse because I needed to buy those anyway. It's really hard to use these categorized transactions to figure out if I need to cut back on vacations, or buy a more fuel efficient vehicle.

[samatman]

I have a gnarly python script which converts all the CSVs I need into a ledger format file and classifies them into accounts by merchant.

I do have to go fetch the CSVs myself, and if I want a purchase from e.g. Amazon to go into a category which isn't Expenses:Goods:Amazon I have to move it, but all in all it does the two things I need: puts my purchases into buckets and makes me look at my expenses on what should be a monthly basis but is closer to quarterly lately.

This is with ledger-cli, rather than GnuCash, but same principle I think.

[alfu]

I create most of my transactions with a script reading my bank and card statements. The description in the statements are usually good enough to map them to the correct account. I also added snippets to my editor for adding entries (I use a text-based accounting system).