Best practice: Budgeting with savings / part of income.

[Peter J. Farley III]

Tobias,

I assume here that you are getting your income in one electronic "direct deposit" to your checking account rather than as cash-in-hand to be manually deposited at the bank or ATM to different accounts.

Saving a portion of your "direct deposit" income is actually an expense on the checking account side and an income on the savings account side.  When you transfer savings back to checking to fund a special expense or bill, the transfer is an expense to the savings account and an income to the checking account.

I set up categories that allow for such transfers between checking and savings for each separate savings account I may have:

Income:

Transfer In from Savings #1
Transfer In from Savings #2
Transfer In from Checking

Expense:

Transfer Out to Savings #1
Transfer Out to Savings #2
Transfer Out to Checking

When I am saving the money from my income I use the "Transfer Out to Savings #1" (or #2, etc.) expense category in the checking account "check" line and in the Savings account I use the Income category "Transfer In from Checking" for the "deposit" line.

When I move saved money back to Checking to pay bills I use the expense category "Transfer Out to Checking" in the Savings account line and the income category "Transfer In from Savings #1" for the checking account "deposit" line.

This scheme can be expanded to multiple checking accounts if you have them, or you can simplify to just four categories and not bother to identify which "savings" account was transferred to or from:

Income:

Transfer In from Savings
Transfer In from Checking

Expense:

Transfer Out to Savings
Transfer Out to Checking

HTH

Peter

> -----Original Message-----
> From: KMyMoney [mailto:kmymoney-bounces at kde.org] On Behalf
> Of Tobias Pankrath
> Sent: Monday, October 09, 2017 4:07 PM
> To: kmymoney at kde.org
> Subject: Best practice: Budgeting with savings / part of income.
> 
> Greetings,
> 
> I am using KMyMoney quite successful to track my actual expenses,
> but have a
> hard time to figure out how you correctly use the budgeting feature, if
> I plan
> to save a portion of my income in an extra savings account.
> 
> Suppose I've got one income category 'salary' and my monthly income
> is 100$.
> That's easy to configure in the budget dialog. But when I want to save
> 20$ (by
> transferring it to an extra savings account) I don't know how to do it.
> 
> The problem is that savings are no expense, so it does not make sense
> to have
> a category for it, and similary I don't want to modify the income side of
> the
> equation to reduce my budget by 20$.
> 
> I'd like two solutions to this problem: Manually specifying the budget
> size
> (to adjust the income part) or allow accounts to be used as expenses,
> so that
> I have an actual bugdet point for my savings.
> 
> How do you solve this in your use of kmymoney?
> 
> - Tobias
> 
> 
>