Sub-Account For Bills
This discussion is public.
I get Paid weekly, (Thursdays) before switching to money dance, Paying my major bills monthly would mean taking a certain amount from each check in order to spread it out so its budgeted to where I'm not using one whole check on one bill.
So as an example Ill use my car payment.
I have my paycheck transaction on Thursday,01-31-19.
Car Payment is $448.35
I divide this into 3 payments per check, $149.45/ check.
Kinda like an envelope system how would I make a sub account (BILLS) reflect this. (just my bill money)
I was thinking of making a sub account for bills and creating a transaction reminder for the amount on each Thursday to be allocated to that account but in reality still be in main (CHECKING) Parent account. The only concern I have with doing this is my bank statement not showing the correct balance because of it just being an allocation account.
I have exhausted trying to transfer my money into another checking account so it reflects the true amounts in my bill account and my checking account for budget purposes.
Can anyone just give me an explanation on how I should handle this correctly with out confusing myself and making it simple.
and how I should document a transfer to my bill sub account (IN) for saving the amount and also (out). And by out I mean my car payment gets taken out of my checking account, So how would recording this transaction work?
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1
shaun
on 30 Jan, 2019 04:55 AM
I'm a user, not a support representative. The tl;dr is that you use the "Include Sub-Accounts" option in the Reconcile Account dialog.
I do essentially what you've described. Keep in mind as you read this that there are likely better ways to do it; this is simply what I've wound up with after years of using MoneyDance.
Every week, I have a memorized split transaction that moves an amount out of one account and splits it into multiple sub-accounts. You could do this biweekly or whatever makes the most sense for you.
The sub-accounts are (in MoneyDance) children of my bank account, so (simplified) it looks like this:
... and so on. You get the drift.So, here, I have four sub-accounts which are children of "Checking" which itself is a Bank Account within MoneyDance.
Each week, a memorized transaction takes a set amount (let's say $100) out of Checking, and splits it into each of the sub accounts, so it looks something like this in the Checking account:
And the split looks like:And each of the child accounts will have a single entry looking a bit like this:
So, your checking account (in MoneyDance) will show a transfer out, and your sub-accounts will show transfers in from the parent account.
Now, the magic sauce -- reconcile the parent account ("Checking" in our example) and place a tick mark in the "Include Sub-Accounts" tick box on the Reconcile Account dialog. This will bring all of the sub-account transactions into the reconciliation process, but it will also show both sides of the transfers discussed above, which don't really exist outside of MoneyDance. You'll need to tick the parent side on the left and then each of the child side transactions on the right, in order to balance out the reconcile. I'm not sure best how to describe that, so I apologize if it's unclear.
I hope this helps.
Shaun
2
shaun
on 30 Jan, 2019 05:10 AM
As for your car payment - you would likely just record it in MoneyDance as coming directly out of the appropriate sub-account. When you use the 'Include Sub-Accounts' tick box, the reconcile process will show the sub-account transactions and you can reconcile them against your bank statement.
3
mhoggie
on 30 Jan, 2019 02:14 PM
just a user,
just jumping into this conversation, I've used MD for years and never knew that I could create a sub account of my checking for budgeting purposes and reconcile all together. That really is a slick way of dealing with envelope style of budgeting. Thanks for the insight.
4
btg.19
on 30 Jan, 2019 09:32 PM
Alright, Honestly the responses rates a lone make it worth it. Yes very helpful. Im just trying to figure the best way to do it.
Are there any other suggestions other then the envelope ?
OR does anyone do it a different way that would work better, It doesnt have to be just the envelope. Im trying to come up with ideas that work along the lines of me being able to track what money from each check is located?
Ps; Ive tried a physical transfer where i set an auto transfer to another account,(checking), but the conditions to transfer are a hassle, 200$ max until that transfer is cleared. SO if i have bills for that check racking up to $250 i can only transfer 200$ first wait for it to clear then the next one of $50, and then wait 2-4 days but by that time my next check will arrive so that didnt work. But at least i could physically see the transfer so i know how much is remianing and what not.
5
Tom Freeman
on 30 Jan, 2019 11:56 PM
I think Shaun's method is elegant. I am assuming that the actual check gets paid out of the sub account for the actual payment.
This does mess up some of the reports in MD, such as the transaction reports, as their are two transactions that seem to cancel each other out.
Since the income and expense reports are based what is in on the categories, this report is current until you make the actual payment and categorize it.
What I like about this method is that you can see the balance of your checking account and also the major reoccurring bills. I do believe this would be unwieldy if used to track more that a few line items.
Tom Freeman
Infinite Kind Support
6
shaun
on 31 Jan, 2019 12:27 AM
It can get a bit complex, and it probably explains why I've never had much use for the Transactions or Income and Expenses reports. :-) It's also why I'm about six months behind on reconciling my checking account right now, but that's a conversation for another day...
I use a weekly split that distributes funds into 20 sub-accounts beneath my main checking account, for a variety of annual, bimonthly, and monthly expenses. I've never really been able to figure out if it's proper envelope budgeting but it seems to work for me. I have also seen references to setups like this as "Sinking Funds" but I'm not sure if that's the correct term.
On a regular basis I check that the "Current Balance" reported on the Summary Page for my main checking account (a single number that 'rolls up' all the child accounts into one total) matches what is actually in my 'physical' account at the bank. However, I don't make budgeting decisions based on that number, because what's much more relevant is the number that my main checking account's register shows, since the rest of the money in that account (hidden away in all the sub-accounts) already 'has a job', to borrow a phrase.
7
btg.19
on 31 Jan, 2019 07:17 PM
Ok. Well thank you. Im new to md so this kinda helps in a way. HA.
Ill have to research another way to track where the money is in my actual account. At the end of the day The app still works great just wish there was a way to virtually allocate for those of us getting paid weekly.
8
mhoggie
on 31 Jan, 2019 07:32 PM
just a user,
Have you tried the old style mixed interval budget feature. It allows budgeting by any interval and you can follow with the ongoing activity with the budget bar at the top of the summary screen. Yeah, its not like an envelope system, but worth a try.
9
btg.19
on 31 Jan, 2019 07:38 PM
I was Actually just reading something about it no i have not tried it.
Can you tell me more Based on my bills and pay schedule?
Like i mentioned i would just do it within my bank but the requirements for transfers is just mind blowing or open another checking account for this reason (bills) but the requirements for that cannot be met due to the fact that I dont make enough to have a revolving amount, and really dont feel like paying the $25 fee just to separate my money.
10
mhoggie
on 01 Feb, 2019 12:41 AM
just a user,
The way anyone uses a budget is specific to their situation. The budget feature in MD and most others simply allow you to keep track of your spending so you will understand where your money goes so you can make any adjustments. But a lot of families just need a way to make sure they can reserve their money in a way to guaranty future known and unknown needs like paying a loan, utilities, insurance, auto repairs, credit cards, etc. When I was first married, we would just buy what we thought we needed without much thought of bills we would have coming due and we would deal with the bills as best we could when we got them. As years went by, that just became too awkward. I always paid my bills on time and I was getting in a bind too many times. We just used one checking account and often their wasn't enough to pay the bill we just got in the mail. And you don't want to use a credit card to make up the difference because that creates even a bigger problem. So I finally made a change to keep my sanity. I calculated what I just needed to keep in the bank to pay any upcoming bills and I put that amount in another checking account and set up my payroll deposit to deposit that calculated amount into the new "bill payment" checking account. My employer allowed my payroll deposit to transfer a certain amount in my new "bill payment" account and the remaining in our regular checking. Later on, I just put the entire amount in my normal checking and then set up an automatic transfer with my bank to move a certain amount to my "bill payment" account. From there forward I knew my bills were already funded and rarely had an issue paying bills. And since we used our normal checking for all "non-billed" stuff like food, dining, clothes, etc. We didn't need to consider to leave money for bills. It worked great. When our normal checking was getting low, we just slowed down our spending to make it to pay day without worrying if we had enough money to pay the rent, etc.
That's really a simple envelope style way of budgeting. And the method Shaun uses in the earlier comments shows a way to do that same thing using MD sub-accounts. But, you have to allow MD to control your spending or you'll still be in trouble. Having a 2nd "bill payment" checking account forces that issue, and if you shop around you will find banks or credit unions with free checking as long as you use payroll deposits. I never had to pay a bank checking fee other than buying checks for the last 40 plus years. I'm retired now, but I have MD budgeting set up just so I can get a good picture of income vs expenses vs assets and investments.
11
btg.19
on 01 Feb, 2019 01:07 AM
Thats what I need to hear! Thank you I will have to look into that from my work. Im on the same page as you then. I have a problem with keeping the money there. I know how much I need to save but with out virtually seeing it Im always in a pickle when it comes to the end of the month where the big bills hit.
Yes Im 22 now making more money, but then spending more money because I'm not actually seeing where it goes. So I'm only using my credit card for everyday stuff, because I do get paid weekly, so gas, lunch, etc. and pay it back with my weekly check and once I talk to my employer and set up DD through chase bank to another account ill be on my way to actuating seeing the results instead of playing the guessing game or procstinating.
Thank You.
ANY other tips you can share ?
I want to have full control of my money.
They Really don't teach this stuff in school!
12
dwg
on 01 Feb, 2019 01:44 AM
I'm a fellow user.
No, schools do not teach money management or even the basics. Many years ago I worked for a bank and the young staff members straight out of school were often bad managers of money - and as for even thinking about giving them a credit card forget it, that is just a disaster waiting to happen.
We used the technique of setting up more than one bank account for them with either automatic salary deductions or automatic transfers to fund the accounts. We would not give them card access to the account nor a cheque book, so to get to the money it required some effort, for the truly bad who were saving for a particular objective we would even mark the account as no drawings allowed, which meant they would have to see someone who could change the status to get the money - this is not something the everyday customer could get done.
The separate accounts with card access or having cheques seems to work for most, this is not giving them full control but rather removing a level of control.
Using sub accounts or other methods in moneydance is more about keeping you informed of where you stand, so it is a management tool, it does not stop you doing anything, so you have control and have to have the will to manage your finances appropriately.
Different people need different tools, different level of controls to manage their finances.
13
mhoggie
on 01 Feb, 2019 02:40 AM
just a user,
One reason you don't see schools teach realistic budgeting is because most entities funded by our tax dollars don't do a good job managing the money they get from the tax payers. Same problem with many big corporations also (just look at who had to be bailed out in 2008). But they survive because they handle large sums of money and they often get special treatment from the banks or tax payers who hold the debt. If you are in a small, medium business and you don't manage your money, your out of business quickly. But they usually can start over again after bankruptcy. For individuals, your stuck with a nightmare that never ends, even after bankruptcy.
14
dwg
on 01 Feb, 2019 02:53 AM
I'm a fellow user.
I think it is worse than that. Apart from the fact that the tax payer is viewed as a bottomless pit of money. We have multiple generations of poor money managers, many of the teachers are bad at it, we have had many years where things have been relatively prosperous so things have not been that tight where you had to manage to the last cent, and an attitude has been bred to just put it on the card, with little though to saving up for something.
15
mhoggie
on 01 Feb, 2019 03:03 AM
just a user,
Yes, your right.
16
btg.19
on 01 Feb, 2019 05:21 PM
Yes I agree and that why its nice that the app has a this space to ask other users (people) for recommendations. Thank you for all the help really means a lot!
Now with a new checking account Ill have a certain amount DD into the bill checking. Lets say the transfer is $250 for this weeks bill money.
When the transactions shows the salary deposit, What should I do next to to track how much for each bill is allocated at the end of the month.
Im taking a guess and assuming that I need to use the split categories to divi out the $250 transfer so it would look like this
-Split_
CarPayment_trn-1 , $150
Car Ins Trn-1 , $100.
and the budget categories will be applied to that category?
17
mhoggie
on 02 Feb, 2019 01:36 AM
just a user,
Since most of your bills will be monthly, I would set up a budget using the "old style - mixed interval feature. In my opinion the default new style budget is slow, limited, and awkward to use. Then you can add all your known bills and set up the amount you expect to spend for each expense each month. That would include your income that you would use for paying the bills. That would be 4 weeks of deposits to your bill payment checking account. Once you have that all set up, you can see your progress in the budget bar at the top of the summary page. You can also set up some reports and memorize them to make them easy to use. Also you will want to set up the expense graph to show up on your summary screen. Once you have your budget set up, you can easily see how well your expected expense match with your expected income. This will just be a budget for bill payment which is what your primary need is. At some point you may want to keep track of other things other than just bill payments. You can set up reports and budgets to keep up with all that if you need. The main thing for you if I understand your situation is making sure you have the money in the bank to pay your bills when they are due. I would fight that battle first, then you can expand your budget as needed. By the way, there is a problem with loan payment budgeting in MD if you have that loan built within MD. Since that payment would show up as a transfer from your MD checking account into your loan account, MD will not pick up the activity because it looks like an account to account transfer. But there are work around methods to accomplish that as needed. But if the loans are not built in MD, just create some extra categories , i.e. car loan payment, credit card payment, mortgage payment, etc. and then set your budget to watch for those transaction names. If you search the discussions about how to budget loan payments you will find all the related info.
Also when you first start a budget you will have to fund your bill payment account as needed to get ready for the payments due in the weeks ahead. Once you have the needed amount set up in your bill payment account, you just leave it alone and if you have done all your budgeting work correctly, the money will be there when needed. And you can create reports and watch you budget as you update MD transactions, etc.
Best thing is just to jump in there and get familiar with all the tools.
18
btg.19
on 05 Feb, 2019 03:27 PM
Thank you. This really helps me out a lot! Well explained. Makes the money spent on this program actually worth it!!!!
So im in the process on the old style budget so thank u.
Ive got the Account open and the money funded for advance and this month is covered as well. How do I go about adding this new account to my MD account?
Would it be considered a child account to my main checking account? or just another account with the parent the base?
Right now I have it set up as the child since its the same bank, but for some reason now my transactions downloaded are being uploaded to my new account, and now the First checking it should be coming out of. So I'm assuming I set it up wrong.
19
mhoggie
on 05 Feb, 2019 04:02 PM
just a user,
It really doesn't matter whether you set up the new checking as a child or standalone except in certain situations where you can have reports include the child amounts with the parent. When you download your transactions, you should get a prompt to confirm which account it should go to. Are you getting that prompt ?
20
btg.19
on 05 Feb, 2019 04:35 PM
Yes I am. So I choose the account. Let me try again.
Budgeting Question, I buy things for my brother/ roommate, For example Phone bill, For budgeting purposes He sends me his portion of the bill how would I mark this in money dance, If his portion is being paid to me. And I'm paying the bill? Would that be under an income? since its money owed? reason I ask is because ill be charging 150 for a phone bill its on auto, But my brother is depositing half into my bill account but my budget isn't showing that it shows I'm spending more money.
So 150$- taken out for sprint, The same day he is depositing 75$, Which should show my budget spending is only $75, Shouldn't the deposit cancel half on my budget because its adding to the $150 amount?
21
mhoggie
on 05 Feb, 2019 05:13 PM
just a user,
I think the best way to deal with that situation is to add another budget income item to account for the additional income to pay the bill. You can set it up in a reminder and have it either automatically or manually add to your checking as needed. Then when you download your banking transactions, that deposit should match up.
22
btg.19
on 05 Feb, 2019 09:41 PM
Ok, and lets say its groceries.
My roommate all send me money
The transactions will show up like the s amount
-2/3. DEP. Quick pay from Kelly, +$45.00
-2/3. DEP. Quick pay from Joey, +$45.00
-2/3. DEP. Quick pay from Jonathan, +$45.00
Now my next step would be marking these Deposits, Categories,
I would assume to choose the pre-populated Other-Income category
So when I pay the bill how including my amount how would I categorize the money going to out of my account so at the end my budget amount is only the amount I paid , in this case $45.00 for my portion which is budgeted.
23
dwg
on 05 Feb, 2019 10:15 PM
Your trying to intermingle group income and expense with Individual income and expenses in the one data set and the one budget.
That is likely to get very complicated very quickly, you would need more income categories and more expense categories, some of which are budgeted and some not.
I'm not sure it is worth it. I think I would be considering having another bank account for group expenses and maintain the data for it in a separate Moneydance data set. So your exiting data set and bank accounts are for you as an individual, for your share of expenses you transfer money to the other bank account as your flatmates are doing now and pay the group expenses out of that account. Your situation could well change in the future and I'm not convinced that having a complex structure is good for the long term.
Support Staff 24
Ethan
on 05 Feb, 2019 10:49 PM
One possible way to handle that is to create an asset account specifically for group reimbursements and payments. So if your rent was $2000, and it was split equally between you and three housemates, you could categorize that transaction (assuming you are the one paying for it initially with one check) as a split with $500 under a Rent category (for your share) and $1500 under your group expenses account (for everyone else). When they pay you their $500 share, the money would come out of that group expenses account. The same thing would in principle work for most kinds of payments, like purchasing things for other people for which you will get fully or partially reimbursed. This wouldn't affect your categories at all for things like your personal income and expenses reports (other than to show your actual share of these things). Everything else would move through this pass through asset account, which should always be clearing to zero.
Ethan
Infinite Kind Support
25
mhoggie
on 05 Feb, 2019 11:26 PM
just a user,
Just as DWG and Ethan indicate, it can get a bit complicated. But keep in mind that if you don't keep your process simple and useful, you'll give it up and it won't benefit you. So a lot depends on how much effort you want to expend to keep up with everything.
Here is another thought to keep up with your roommate expenses and reimbursements using the grocery expense example you gave.
You set up your budget for $45 groceries.
As you spend money for groceries for your roommates, you end up spending $180 for groceries (3 roommates at $45 each, plus your $45)
But when you process the payments your roommates make, they will all process as income with the grocery category which will subtract from your grocery budget and leave you at your $45 grocery budget you set.
So for the budgeting part, as long as all the expenses and reimbursements are set with the grocery category it will all come up leaving just your budgeted amount.
But as far as keeping up with your "bill payment" checking account, you need to set reminders to expect those reimbursements as income so you can make sure you have the right amount of money in your "bill payment" checking to pay all your expected bills.
And you want to set up those reimbursements as an income budget item also.
26
btg.19
on 07 Feb, 2019 06:50 PM
OK, SO heres my dilemma now. Ive opened another checking , Mypaycheck just hit my two accounts. 300$ in my main, 200 in my bills account. I wasnt aware it isnt possible to categorize transfers so i know the 200$ actualy is allocated to my weekly or monthly budgets. Ex- Weekly bill transfers.
Im just trying to allocate the money in this account any tipes?
So lets say $200 is in the account as of today. THe transaction reflects that. I know in my head that $150 goes to my car payment and the remaing $50 goes to my car ins.
How would I make this reflect in my budgets. Do i need to split them in another transaction?
I just want to be able to see the budgets and whats in there but im having trouble with being able to add the categories so that it does reflect my budget.
27
mhoggie
on 07 Feb, 2019 09:02 PM
Just a user
You can categorize a transfer, you just can’t budget the transfer without some extra steps.
28
mhoggie
on 07 Feb, 2019 09:04 PM
Just a user
Is your deposit coming from each checking account or is it set up to transfer from one checking to the other?
29
btg.19
on 07 Feb, 2019 09:15 PM
My paycheck is split into two checking accounts , 1- is main checking , 2- Bill checking
30
mhoggie
on 07 Feb, 2019 09:47 PM
Just a user
Ok, are you manually recording the deposit , using a reminder, or just downloading from the bank?