My wife is not down with using a digital envelope system, but has agreed to use a paper envelope with the amount that she is allowed to spend for the month in play money (we don’t use a lot of cash). When she spends, she gives me the play money and I track the expense. How do I track both her envelope and what she spends it on food, gas, etc. with Good Budget?
One way to do that is to create a separate account named “cash” or “wife’s cash”, or whatever. Then create an envelope with the same name. In order to give her the physical money you’ll have to do some type of physical withdrawal from the bank, right?. Well, in GB you’ll record this as a transfer from your bank account to “wife’s cash” account. You’ll also have to do a corresponding envelope transfer from an envelope of your choosing to her envelope.
When she spends the physical money on whatever, you’ll record in GB an expense transaction from her “account” to her envelope,. Her physical envelope balance and her GB envelope balance and her GB “account” should always be equal.
If you want to you can also track what she’s spends her money on by using sub-envelopes. But we can get into that after you understand what I’m talking about here.
There’s always more than one way to skin… err, I mean manage a budget, so others may very well chime in here and share how they do it. You just need to pick the method that makes the most sense to you.
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Totally agree here and want to add:
If she’s spending out of joint categories (eg she buys household groceries with “her” money) you can still manage this with one Groceries envelope. If you want to set up your budget this way, rather than “Her Groceries” and “My Groceries” as separate, we’ll be happy to share what that looks like too!
I think I have an idea of what you’re saying, but one detail, we’re not going to use real cash, just something in an envelope - monopoly money, photo copy some bills, something like that, in her “envelope”. When she spends something on the credit card, then she takes the corresponding amount out of her “envelope”. I’ll then track the spending in GB for both the money coming out of her envelope (although I might just take it out of the “general fund” since the idea is for her to limit her spending) and what category it was spent on.
Yes, I want to be able to track categories out of one envelope like groceries. We just need a way for her to track what she spends. When she hits her limit, then we talk about moving money from other envelopes to her envelope.
I think you’re going to have to set up her own account in Goodbudget. You’ll need to “write a check” from your regular account into her account when she withdraws her spending money. Since she’s using a credit card, you’ll just replace that “check” with a payment to the credit card at the end of the month.
That way the money she spends will come out of the correct envelopes in your household budget, and your account balances will be accurate because you won’t clear the check to her “account” until you replace it with the payment to the credit card.
Edit–by Account I don’t mean a separate GB household, I only mean you’ll have a “Checking Account” and a “Spending Account” in the Accounts tab.
I think my solution is going to be to create an “account” for her. Put the budgeted amount into it each payday. When she spends, I’ll pay from the correct envelope and transfer out of her account back into the regular account.
Does that make sense? Or am I missing something? Or is there an easier way?
That sounds like it would completely work—I might suggest that you can save the individual transfers back into the “real” account by doing a single monthly transaction that aggregates all her credit card spending.
For example, if she agrees to limit her spending to $1,000 and you “write a check” for $1,000 to her account (but don’t clear it) your cleared balance will be accurate (this isn’t the case with a transfer, which is why I suggest a check).
At the end of the month if her account has $50 in it, you would delete the “check” and instead just pay the credit card $950.
This is a little trickier if you’re also tracking your CC’s in Goodbudget (you’d probably want to cycle the spending money in parallel to the statement dates) but it’s still do-able.
I think my solution is going to be to create an “account” for her. Put the budgeted amount into it each payday. When she spends, I’ll pay from the correct envelope and transfer out of her account back into the regular account.
This worries me. If you record the expense against an envelope and the regular account, then transfer from her account to the regular account, you will be artificially inflating the balance of the regular account.
Unless the “regular” and “her” accounts in GB together sum up to the balance of the bank account behind the scenes. Then it would work but will be harder to reconcile.
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Here’s a radical idea that I have suggested in the past which some people don’t like. Although it is unconventional, there’s an argument that it’s the simplest approach, where simplicity means the least amount of manual fiddling in GB to keep accurate records.
Set up your “Checking” account in GB and set the balance to what the bank says.
Set up a “Her Credit Card” account in GB, but make it a regular GB account, not one of the debt or credit card account types. Set the balance of this account to her credit limit, not her balance due. Note that this will immediately increase your Unallocated balance. This is what scares most people. They worry that you will think you have more money than you do. If it bothers you, just create a Goal envelope and allocate the credit limit there to keep it out of immediate reach.
If there is already a balance due on the card, record it as an expense so the account balance in GB matches the available credit on the card.
At the beginning of the budget period you give her the play money. When she buys something and hands you back the play money, record the expense to the correct envelope and her special account. The budget envelope will decrease appropriately and the balance of her account will also decrease reflecting the reduction in available credit. The Checking account remains untouched and always matches the bank balance.
When you receive her credit card statement, you can reconcile it against the transactions on her account in GB to make sure nothing was missed. If there was any interest or fees charged, record those as expenses against an appropriate envelope and her account.
When you pay the credit card bill, record it simply as a transfer from Checking to her account. This will reduce Checking appropriately and raise her available credit to match.
At all times the GB account balances will match the actual accounts. You only have to enter one GB transaction per real transaction. The only thing you don’t have in GB is the current amount due on the credit card, but that is easily determined and if you plan carefully and stick to your plan, everything should work fine.
So this is an interesting idea and I’ve seen you mention it before–but why in this scenario wouldn’t you create the “placeholder” credit card account with a credit balance equal to the money budgeted for spending? That way you would always know exactly how much was still left in the other person’s budget because when it gets to a zero balance, the money has been spent. The checking account is still accurate (same reason I suggest “writing a check” to the other account) and the amount remaining would be easier to visualize. Thoughts?
Yes you certainly could do that, and if the wife’s budget was the same amount every period I might do that. It would be nice for the GB account to have the same balance as her play money envelope.
I made an assumption that her play money varies month over month, and that they might periodically have interest or fees. Based on that I would personally prefer the balance matches the card’s available limit rather than just her allocated amount, to make it easier to reconcile with the statements. Plus if disaster strikes and they need the card for some emergency, those funds are already accounted for in GB.
Full disclosure, I do not track CCs in GB at all so everything I have said here has not been tested in practice, but I do use a projected income account to budget and that operates on the same principles.
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