[Kmymoney] Needing some guidance about accounts x categories x tags

[Jack]

On 2014.10.08 12:25, Joao Roscoe wrote:
> Dear Srs,
> 
> I'm a kmymoney beginner, trying to figure out the  
> accounts/categories/tags
> setup that would best fit my needs, and I'm in need of some guidance.
> In gnucash everything is an account, while in kmymoney we have three
> different ways to classify transactions. While tags are distinct in  
> the way
> that it will be possible to attach more than one tag to a single
> transaction, the difference between accounts and categories is not  
> clear
> for me, so far. I could, for instance, have two accounts under  
> liabilities
> - bills and loans - and several accounts under bills, for instance
> cellphone, utility and gym membership. I could also have all those as
> categories, and have all transactions in single checkings account.  
> What
> would be the sensible approach?
> 
> Best regards,
> Joao

Welcome to KMM.  How to set things up really depends on your needs and  
how you want to track things.  There is no single best way.  However,  
you can start by thinking of accounts as piles of money where you want  
to always be able to know the balance.  Normal accounts like savings  
and checking, credit cards, the cash in your pocket.  While KMM treats  
categories as accounts internally, you can think of them as different  
ways you spend your money or different types of things you pay for or  
get income for.  When you initially set up KMyMoney, you should have  
chosen a template for your country - you can look through the list of  
categories it installed as a good set of examples, but you will  
probably want to add some more, and not use or even delete some that  
are there.

The other piece you did not mention is Payees.  These are also special  
types of accounts, but represent people or organizations you give money  
to or get money from.  The Phone Company or the Electric Company would  
be payees, but electricity and phone, or maybe just utilities, would be  
Categories.

As an example of something that could be done either way - if you  
simply pay the gym a set amount of money monthly for membership, then a  
category makes sense.  Every time you pay the gym, you make a payment  
from your checking account with the "gym" category.  The payee could be  
the gym.  If you have multiple gyms, each could be a different payee,  
but both use the same "gym" category.  However, the gym might keep a  
running account for you, where you can charge snacks or special  
sessions.  That could be set up as a liability account, where each  
charge shows up as a payment from that account to the gym.  When they  
send an invoice or bill each month, you would track that payment as a  
transfer from your checking account to the gym account.

Tags are similar to categories, but there are less formal restrictions  
on the internal accounting used to keep track of things.  One good  
example is if you have several cars and a motorcycle.  You could have  
categories for gasoline, tires, registration fees, and maintenance.   
However, if you want to know what you spent on just one car, you would  
either need to create subcategories of each of those for each car, and  
then create a report to do the additions.  Instead, you can create a  
tag for each car.

It may be best that you try to put a month of data into KMyMoney and  
see how it works.  You could even create different KMyMoney files for  
different ways of organizing the accounts and categories.  After about  
a month, you should have a reasonable idea of what works for you and  
what doesn't.  The idea is to do that before you try to put in multiple  
years of data.  With only a month of data, even if you have to start  
from scratch, it hasn't been too much time.

Also - if you didn't read the initial sections in the manual, please  
do.  If there is something there that is confusing or not explained  
well, let us know, since we are always looking for ways to improve it.

Keep coming back with questions.  Some of this can be confusing, but  
mostly it makes sense after you have used it for a while.

Jack