[moneydance] Your Moneydance Process?

[Edward Reid]

At 6/8/2009 10:37 AM -0700, Michelle wrote:
>here is what my accounts look like:
>http://bit.ly/mymoneydance
>
>What does everyone do about their descriptions, do you have a system? I've
>been putting the date and what i bought.

The main thing I see that you'll probably want to change is that you 
are showing a payment from checking to cc for each cc transaction. 
Normally you would just show one of these per month, when you pay the 
credit card bill. (Of course, if you really are making a transfer 
from checking to cc for each cc transaction, then what you show is 
exactly right.)

Other than that, the transaction entries look appropriate, and I see 
that you are categorizing them. Your categories may evolve, but it's 
better to start with broad, simple categories, as you are doing, and 
refine them in response to needs.

When you run reports, you'll want to report on expenditures from both 
the checking and cc accounts. However, to avoid duplication, you'll 
exclude the cc payment, which actually looks like a transfer from one 
account to another. As a result, you don't need all your expenditures 
to show in one account. (Others do more reporting than I do and can 
possibly suggest best methods.)

The fact that the cc payment is not, technically, an expenditure 
often confuses people. Both accounts are yours, so it's just a 
transfer from one of your accounts to another of your accounts. The 
transfer becomes important when you are predicting cash flow -- 
making sure your checking account doesn't overdraw. It's a difference 
between all accounts and just cash-equivalent accounts. Budgets are 
blind to what account the money is in; cash flow sees the individual accounts.

For description of a merchant transaction, I always put in the name 
of the merchant. 98% of the time, I count on the category to tell me 
everything else I need. On rare transactions I'll make a note in the 
memo field. Again, the cc payment is just a transfer from one of my 
accounts to another of my accounts, so it isn't an expenditure that I 
need to categorize -- the destination account shows as the category, 
and that's all that matters.

For more screen shots, see

http://paleo.org/mdcc.gif (a credit card account)
http://paleo.org/mdck.gif (a checking account)

You'll notice that I use the single-line display, to get more 
transactions on a page, so you don't see the Memo fields. I promise 
that they are mostly blank. That's why I don't display them. ;-)

BTW, I categorize my expenditures more finely than I normally have 
any use for. It comes in handy on occasion when I'm curious about 
something, but I could certainly make do with fewer categories. But 
since I have them, keeping them up is easier than cutting them down.

Edward
-- 
Art works by Melynda Reid: http://paleo.org