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One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

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Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#51

Post by huhkerrf »

x187463 wrote: post #35
huhkerrf wrote: post #3

I get that people on here don't like subscriptions, and I understand why, but I've been using You Need a Budget for well over a decade, and it is probably the last subscription I'd ever give up. The automatic import of expenses is so valuable for my family and keeping track of how much we've spent and how much we have left for the month. We used the fixed-cost version for years beyond when it was officially supported…

I'm a huge fan of YNAB. It's a morning routine to log in (really, the tab is always up) and reconcile accounts. The zero-based budgeting method, while not requiring YNAB, is beautifully represented in the software. I'm sure I could use some free software to accomplish the basic tasks but having an associated app my spouse can review for quick decision making is very valuable. It's made budgeting a tool to accomplish…

Another unexpected side effect is that it made me "excited" to spend money when I had saved up for it. Before it would be a back and forth, "should I buy this? I've wanted it, but I could use the money for something else..."

With YNAB, it's been "hell yeah, I saved up for this and now I get to buy it."

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#52

Post by thomascountz »

As being discussed in another thread about plain-text accounting[1], what I've found most difficult about these tools is the learning curve between "Assets = Liabilities + Equity" and the realities of modeling a household economy.

I appreciate the level of detail in this post. I think there's often confusion that plaintext == easy/simple. The real takeaway is: "if you're going to go through all of the trouble of managing your economy, you may as well make sure you control your data and own your system."

[1]: https://news.ycombinator.com/item?id=46463644

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#53

Post by abdullahkhalids »

Macha wrote: post #17

> The key insight is that bank statement PDFs are almost always columnar. Of course, this relies on the PDF having a proper text layer; if your bank sends you scanned images, you’re out of luck (though I’ve yet to encounter one that does). When you convert them to text while preserving the layout, you get something that looks like this: So I decided to try this out with my bank who's export options are (one of the me…

My bank outputs different data in the description field for CSV and PDF. The PDF statement descriptions are longer and contain more information.

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#54

Post by ghaff »

michaelrpeskin wrote: post #43
ghaff wrote: post #39

Earlier quoted context omitted.

It probably worth at some level not totally losing track of various subscriptions or routine daily purchases. Won’t buy you a house but can be a few thousand a year.

One of the things that the tracking taught me was to be allergic to subscriptions. I only have a few where significantly more convenient because I know I'll use it. Outside of our phones (and the kids don't get phones), we have one music service for the family, I'll allow two video streaming services and if the kids want to add one, they have to pick one to cancel, and I have a coffee subscription because the owner l…

That’s about where I am along with a couple bundles plus a few computer related subscripts like Backblaze, VPN, and Adobe related.

To the other point, a lot of people have a more or less daily Starbucks or other breakfast related habit.

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#55

Post by Macha »

inetknght wrote: post #33
Macha wrote: post #17

> The key insight is that bank statement PDFs are almost always columnar. Of course, this relies on the PDF having a proper text layer; if your bank sends you scanned images, you’re out of luck (though I’ve yet to encounter one that does). When you convert them to text while preserving the layout, you get something that looks like this: So I decided to try this out with my bank who's export options are (one of the me…

That's a ridiculously dumb idea on the bank's part. Print the PDF to an image. Then use OCR. Then import the output from that instead.

> That's a ridiculously dumb idea on the bank's part.

Yes. The local banks here are pretty reliable for jumping on every dumb idea that anyone anywhere claims improves security.

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#56

Post by huhkerrf »

ixwt wrote: post #22
ajdude wrote: post #15

Earlier quoted context omitted.

I used YNAB since back when they used to just sell the software and maintained a subscription for a little while. I will say that their approach to budgeting has changed the entire way of how I look at money, and even though I have switched to GNU Cash, I have essentially replicated the envelope method there (it requires four entries per transaction instead of the standard two). For anyone who wants to use this envel…

I've been using YNAB 4 (aka YNAB Classic on Android) for some time. I got a new phone, and the phone app finally won't run on the new phone. YNAB 4 is also quite buggy on my Arch based setup (someone maintains a package on AUR using Wine). So I think it's finally time to move on, which I think I'm doing this year. My only issue with Buckets is that the YNAB importer doesn't take into account that YNAB will take your…

I assume Buckets does that because YNAB no longer allows you to take from next month.

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#57

Post by spiffytech »

I used Ledger for a while, then some other tools. Now I'm on Actual Budget, a nice FOSS envelope budget app that can import transactions from my bank.

I find value in tracking everything, tracking it by hand, and tracking it with precision (our household budget has 68 categories).

When I've tried easing up in the past (e.g., with Mint's lightweight approach) I was left with a budgetary black box where I felt like I never had enough information to make big purchasing decisions. I knew what I had in the bank account, but I didn't know if it was earmarked for anything, or whether the next surprise expense was going to wreck my plans. I felt afraid and paralyzed.

Earning more didn't make the problem go away. Like the financial equivalent of Parkinson's Law, more income just meant more spending. I couldn't out-earn unrestrained consumption. I had to monitor & manage it.

For peace of mind, I found YNAB's philosophy helpful: one-off expenses often repeat predictably on a long-enough time horizon, and can be amortized accordingly. If I itemize all predictable expenses and save a little each month, I know everything is taken care of, and what I really have left over. I never get blindsided because several big expenses hit at once.

I know not everyone has these problems. But I like to talk about my experiences because people don't all need the same things from their finances. It's okay and normal to want control and visibility. Budget apps exist because people find them useful, not because the whole userbase has failed to reach enlightenment and transcend budgeting.

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#58

Post by WorldMaker »

rmunn wrote: post #34
thehours wrote: post #24

Earlier quoted context omitted.

How are investments modeled in this system? e.g I buy $100 of an index fund which can fluctuate in value.

Not an accountant, so if I get it wrong someone please correct me. But index fund shares are an asset: something you own. So is your car, your house (if you own it), and your computer. When you buy an asset, you paid a certain price for it. When you sell it, you pay a different price. Until you sell it, though, you don't actually have the money, so it hardly matters what its value is until you sell it . If you buy $1…

A fancy term of art for all this is "cost-basis accounting". Your (double entry) account tracks only the cost basis (how much you have spent and when you spent it for what commodity) not the current price. Current price fluctuates with the market and you can track the price as well to build an unrealized gain/loss statement. This sort of statement is not an account, it's a report on an account. (And yeah, "unrealized" means what it says that it isn't real money in your accounts, just money you potentially could make if you sold/converted/traded what was in your accounts.)

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#59

Post by snowwrestler »

rmunn wrote: post #44
rmunn wrote: post #34

Earlier quoted context omitted.

Not an accountant, so if I get it wrong someone please correct me. But index fund shares are an asset: something you own. So is your car, your house (if you own it), and your computer. When you buy an asset, you paid a certain price for it. When you sell it, you pay a different price. Until you sell it, though, you don't actually have the money, so it hardly matters what its value is until you sell it . If you buy $1…

I feel I should also mention one more thing. The fact that you don't have the money until you sell the shares is also why "net worth" can be a highly misleading concept. (All numbers in the following example are fictional and made up on the spot, BTW). Billionaire Gill Bates, whose net worth is reported to be $20 billion, does not actually have 20 billion dollars. He has $5 million (million, not billion) of actual do…

Net worth is the denominator for things that people actually want to, which typically don’t require converting it all to cash at once. For example, pulling 4% of your net worth per year is one way to fund a retirement. So you won’t know if you’re ready to retire unless you’re tracking net worth.

For very rich people like Gill Bates, net worth is going to be the denominator for massive loans, tax strategies, and corporate maneuvering. Again, none of that will require converting the entire net worth to cash all at once. That doesn’t mean it’s not real.

Finance is a complex subject, sure, and it gets more complex the bigger the numbers. That doesn’t mean it’s misleading.

Re: One Number I Trust: Plain-Text Accounting for a Multi-Currency Household

#60

Post by callumprentice »

I agree with an earlier post that asserted "net worth = assets - liabilities" but I'd like to do better at understanding what that really means.

Some are easy like the size of your bank balance. Others are much harder.

For example, one asset we have is our home and there are many websites out there that tell you how much it's worth but they each vary an awful lot and change dramatically - so much so sometimes that any savings you've made in the same period are eclipsed.

Similarly, the 401k I've been building up for years seems like a decent amount but trying to calculate what it's worth after taxes and therefore how much you'll have to spend each month seems unknowable.

I think the same is true of investment accounts. If we seeded one with $500 and it's now worth $250, it's easy to think your net worth has risen by $250 but it really hasn't when taxes, fees and who knows what else is taken into account.

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