Hi all,
This is my first post as I’m new to Goodbudget. What is recommended for accounting for an expense like a vacation house 3 months out? Suppose we rent a house in July but pay for it in April. Would you list it as an April expense or a July expense? Similarly with a subscription that is paid annually but could be considered a monthly service. Would you list it in the month you pay the bill, or divide it into your monthly envelops?
Thaks for your thoughts?
Welcome!
In order to track your spending accurately, it’s best to record an expense when it’s actually deducted from your available funds. That means your vacation rental would be recorded when it’s paid, regardless of when it’s used. For that matter, groceries are no different really—you record the cost when you go shopping, not when you eat the food!
For your subscriptions and such, an Annual envelope can serve you well. You’ll create the expense to be paid once a year, but Goodbudget will divide the envelope fills so that 1/12 of the total is budgeted each month. This way you’ll always have the money set aside when the bill comes due.
Hope that helps!
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There was a time when I had an annual envelope for each and every annual subscription payment. Goodbudget, 1Password, Amazon Prime, Costco Membership, each magazine, etc. There were at least a dozen of them. I got tired of managing so many envelopes so made a decision: if a subscription is less than $100 I will just expense it from the Miscellaneous envelope in the month it gets paid. Over $100 gets its own envelope to accumulate funds throughout the year.
That totally helps and makes complete sense! Thanks!
I’ll probably be back in the forum because I’m still working on mastering Good Budget.
Mike
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Good to know. Thanks!
I also got tired of managing too many envelopes, but my solution was to list all my annual payments in a spreadsheet, divide by 12, then plot the month with the lowest balance. I ended up in deficit that month, so I added that amount to the envelope as a baseline then add the 1/12 allocation each month. Now I have a single “annual payments” envelope where all those expenses live.