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

https://lalitm.com/post/one-number-i-trust/

by ayi • 7 months ago

142 91 7 months ago

nubg• 7 months ago

Can somebody explain to me the advantage of double-entry bookkeeping? Is it basically just a "checksum" so it's easier to notice when something is off?

Etheryte3• 7 months ago

Yes, it makes it both really simple to spot mistakes and also allows you to easily audit the whole thing after the fact. In corporate contexts it's a straightforward way to make sure your bookies are also honest, just have an external firm look through the whole thing every now and then.

phil-martin6• 7 months ago

I must have read half a dozen intro-to-accounting books, and it never ever clicked for me. I understood the concepts, the benefits, but it just felt 'wrong'.

It wasn't wrong of course, there is so much history, ingenuity and the invention of double entry accounting, but I just couldn't get my brain to understand it.

The way the concepts settled in my head was: double entry accounting is just an excellent way of modelling a graph with nodes and edges. Accounts are nodes, transfers are edges. Every edge has a source and a destination.

For a paper ledger, each column is graph node, and each row is a graph edge.

That was enough for me to be able to learn the rest of the things I needed for interacting with the accounting world.

But I also realised that that description really only helps a very small part of the population. :D It makes things so much worse for most people.

"Hey could you help me understanding this accounting thing?"

"Sure, but first thing is, let's learn graph theory! You know who Dijkstra right?"

Whole buckets of nope.

But thats a digression from your actual question - whats the point?

It presents a rigid set of rules of recording transfers, everything has to have a from account and to account (i.e. a graph edge), every row must add up to zero.

Because of that, it makes it easy to spot any mistakes in data entry. If any of your rows dont add up to zero - then you've made a mistake.

RedNifre• 7 months ago

Here is my explanation for "software people who understand databases". The structure of the explanation will be as follows:

  1. Explain how you would do simple accounting with a database
  2. Point out which indices you'd create for performance
  3. Show how the "double entry" part of double entry accounting is about the indices

1. The way you'd do accounting in a database is with two tables: One table for accounts (e.g. your checking account, or the supermarket account, which you don't own) and another table for transactions. The transactions move an amount of money from one account to another, e.g. from your checking account to the supermarket account. Or if you use it for budgeting, you might split your checking account into a groceries account, a rent account etc. (think "categories").

2. For performance, you would create indices based on the accounts in the transaction table, so you could easily check what's going on e.g. in your groceries account or how much you spent at the supermarket.

3. Double entry accounting was formalized in the 15th century, way before computers became a thing, but bound paper books were already somewhat affordable. The way you'd do accounting is like this: During the business day, you would write down your transactions as they happen, into a scrapbook, similar to the transactions table mentioned above. At the end of the day, you'd do the "double entry" part, which means you take your "index" books where each book is about one account and you transcribe each transaction from your scrap book into the two books of the two accounts that are mentioned in the transaction, e.g. if you spent $10 from your groceries account into the supermarket account, you'd double enter that transaction both into your "groceries" book and into your "supermarket" book. Then, when you want to check on how much you spent at the supermarket in a particular month, you could easily look it up in the supermarket book (this would be very tedious when using the scrap book). These account centered books are like the indices in the database mentioned above.

So the double entry part is about clever index building for making it easier and faster to understand what's going on in your accounting system.

thehours• 7 months ago

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

rmunn4• 7 months ago

It's not really a checksum. It can sometimes function as one (everything should sum to zero, if it doesn't then you have a math error), but since most records you make will just have two entries (spent $25 on groceries, remove $25 from checking account) the everything-sums-to-zero feature isn't going to catch math mistakes most of the time, because there is no math to be done on most entries. Rather, the fact that everything sums to zero helps you track things later on.

To explain that, I'll rephrase, in my own words, the restaurant example from the article, because that was a good example of the concept. Let's say you went to a restaurant with two friends and decided to split the $90 bill three ways, but your friends didn't have $30 in cash on them at the time. You put the whole $90 on your credit card, and your friends paid you back $30 each the next week: one on Monday, and one on Wednesday.

In single-entry accounting you might have written the following transactions:

  Thursday Jan 1st: $90 restaurant (credit card)
  Monday Jan 5th: $30 repaid from Alice (cash) 
  Wednesday Jan 7th: $30 repaid from Bob (cash)

Thing is, there's nothing to link those transactions together. If you look at these entries three years later, you'll probably be left scratching your head as to why Alice paid you back $30: there's no $30 transaction, so the $90 restaurant transaction won't jump out at you as the reason why Alice paid you back.

But with double-entry bookkeeping, you'd write that as follows:

Thursday Jan 1st:

  -$90 restaurant (credit card) 
  +$30 my share of the restaurant bill (expenses)
  +$30 Alice's share of the restaurant bill (money owed to me)
  +$30 Bob's share of the restaurant bill (money owed to me)

Monday Jan 5th:

  -$30 Alice's share of the restaurant bill (money owed to me)
  +$30 cash received (cash)

Wednesday Jan 7th:

  -$30 Bob's share of the restaurant bill (money owed to me)
  +$30 cash received (cash)

It's not always obvious when you're new to double-entry accounting which entries should be positive or negative, but if you remember the "must add to zero" rule you'll be more likely to get it right. Money flowing into an account is positive, money flowing out of an account is negative. For credit cards, the money flows "out of" your credit card and into the restaurant's ownership, so the sign should be negative. When you pay the credit card bill later, the sign will be positive on the credit card account (and negative on your checking account, thus again adding to zero) because money is flowing out of your checking account and into your credit card account.

Now, look at that double-entry accounting. When you look at the Wednesday Jan 5th entry, and you see that Alice paid you back $30, you'll start searching for a $30 transaction earlier, and you'll pretty quickly find the January 1st and figure out that she owed you $30 because you had paid her share of the restaurant bill on the 1st. And even if the amounts don't line up (let's say she paid you $20 on Jan 5th and $10 on Jan 12th), there's still a "money Alice owes me" category which has a +$30 entry on the 1st, then -$20 on the 5th and -$10 on the 12th, all of which makes it pretty easy to figure out what Alice is paying you back for.

So by recording each entry in at least two places (it's not always exactly two places, e.g. the January 1st expense is recorded in four places total), you get more linkage between the items and it becomes a lot easier to see why the money was going out or coming in.

iljya• 7 months ago

Double-entry accounting models the source and destination of funds. If you keep all of your money in one bank account and neither owe anyone or have anyone that owes you, then double-entry accounting is not necessary because you can record just the one side of every transaction – your bank account is the other side.

However, if you have more than one account or debts, or budgets, then it becomes useful to track both sides of a transaction. If you track both sides of a transaction then you can easily answer questions like: 1. how much money do I have in my investment account? 2. how much debt do I have? 3. how much did I spend on recreational social activities?

You can track debts and investments separately, but then you are still making two entries just in two places.

I think many people have few enough debts and investment account that they track these separately, and the third question, budgeting, can be simplified if each vendor is only ever considered for a single budget, for example, all your flights are part of your vacation budget, and you don't care to break out a flight to a career related conference.

mrngm• 7 months ago

I found this document[0] very insightful. It's quite a long read, but gradually introduces the concepts needed for double-entry bookkeeping.

I think the main advantage is that you can granularly keep track of the movement of money, stocks, commodities, etc., and their conversions. As a day-to-day example, it gives you the ability to follow, for example, invoices received (Liabilities or Accounts Payable), transactions on a bank account (Assets), and what you are going to spend (or at some point, have spent) (Expenses).

This separation allows you to, for example, enter an invoice you've received on January 1 in Accounts Payable, with a corresponding value in Expenses. At this moment, nothing happened yet, it's simply an administrative transfer of some amount from an asset account to an expenses account (the sum of these transfers must be zero, so one amount is negative whereas the other amount is positive. See [0] for more details).

As a result, this gives you insight in what still needs to be paid. Once a transaction for that invoice enters your bank account on, for example, January 10, it gets "paid" to Accounts Payable, thus giving you a link between an invoice, its payment, and finally the amount spent. (This concept also works the other way around, see this sibling comment[1], where it's also extended into working with multiple accounts.)

[0] https://beancount.github.io/docs/the_double_entry_counting_m...

[1] https://news.ycombinator.com/item?id=46464893

huhkerrf4• 7 months ago

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, and it didn't have the automated import, and I don't think I could ever go back to a system that didn't. There were always a few days a month, at least, when I wasn't exactly sure where we were in our expenses.

dugite-code• 7 months ago

For a FOSS alternative: Actual budget isn't dissimilar from what YNAB was years ago when it was an on device budgeting software

loloquwowndueo• 7 months ago

+1, I bought YNAB back when you could - old Windows version that I would run under WINE. I used that until 2025 when I migrated to self-hosted Actual Budget (I run it on fly.io). It does everything I need.

skwee3572• 7 months ago

I dont mind paying for a personal finance tool, but I feel like most of them are made for an average consumer who spends in one currency and needs budgeting. I operate in at least 3 currencies, don’t care about budgeting, and need support for tracking stocks and automatic currency conversions.

The only tools that were able to provide that were GnuCash and PTAs like beancount.

My point is, there is a big segment of people who are not served by existing personal finance tools simply because they operate in more than 1 currency, or have a slightly more complicated setup than envelope budgeting.

huhkerrf4• 7 months ago

I regularly pay with 3 currencies, and YNAB isn't great for that, but it ends up working out because 95% of my spend is in just one.

But, you're right, I have no need for tracking stocks, as I only check in once a year or so, and I can't imagine YNAB would manage that well.

netsharc2• 7 months ago

Are the currency conversions automatic, do they fetch the rate of whatever service you're using? E.g. converting USD to EUR on Wise on 28 Dec 2025 surely gets you a different amount compared to doing it on Revolut, or paying EUR with your card (which is USD-denominated), and on Jan 2 2026 the rates are also different..

I was travelling in the Nordics (they had 4 currencies back then, and they still do!) and wanted to have some precision what cash I exchanged with what rate...

jjav2• 7 months ago

I also use GnuCash for a moderately complex set of accounts with many income sources in multiple currencies. Works pretty awesome.

ajdude• 7 months ago

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 envelope method without paying for YNAB, I recommend checking out Buckets, which is another software that works similarly.

ixwt• 7 months ago

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 overspending and take it from your next month's income. I have some bad habits that means I was really using YNAB as more of a financial tracker than an actually budget system. That's my own fault though. The envelope in question comes out to $-10k... That's all my own fault though. It just means I have to massage it into Bucket's system, or start a new budget.

spiffytech2• 7 months ago

I switched from YNAB to Actual Budget. It's FOSS, and has nifty power user features like a DSL for distributing monthly funds and cleaning up extra at the end of the month.

x187463• 7 months ago

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 savings, wealth growth, and expense smoothing rather than simply a survival strategy. When you have to deliberately shift funds out of one category to cover another, you really consider the relative priorities.

huhkerrf4• 7 months ago

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."

zaphirplane• 7 months ago

What does Ynab do that I would get for free with gnu cash? Just downloading bank statements which I’m not ok with and against my banks t&c.

Other wise all non envelope budget systems are horrible for me because I want the budget to be self adjusting so if I spend more on household items 1 month it needs to ensure I have less to spend over the next set of periods till I’ve gone back into positive . Rollover basically

phil-martin6• 7 months ago

I really enjoyed reading this, and it is inspirational as it is something I have wanted to do for a long time. And as a software developer, it really appeals to me.

How do you think it compares time-wise to using existing accounting software? Was the time investment worth it to get the control and visibility you now have?

lalitmaganti5• 7 months ago

How do you think it compares time-wise to using existing accounting software?

Author here. I tried various consumer budgeting apps before I ended up building my own (and then going to Beancount). The main problem with every one of the apps I tried is that they don't handle investments well. 99% of my money is invested and having net worth figures which are wildly wrong because the app is only tracking bank accounts really annoyed me. That was the reason I built my own thing in the first place.

Was the time investment worth it to get the control and visibility you now have?

Absolutely yes. I think it helps me really understand where my money is going, how I can make it work harder etc. Even though the RE part of FIRE doesn't appeal to me, the FI part does and knowing where I stand at all times has been very motivating.

phil-martin6• 7 months ago

Thank you for taking the time to reply - thank you!

I have question on a more personal front - please feel no obligation to reply.

What impact has having such clear visibility into your accounts had on your relationship with your wife? It feels like it would be a great catalyst for communication, trust and building things if shared finances was a key part of the relationship.

I think this part was the most inspirational - it takes a lot of courage to be that open about finances, even with partners, perhaps especially with partners.

jjav2• 7 months ago

The main problem with every one of the apps I tried is that they don't handle investments well.

Could you expand what were you looking for with respect to investments that was lacking?

I use GnuCash for many investment accounts (in multiple currencies) and haven't run into any limitation, it can show me the true net worth graph.

Etheryte3• 7 months ago

This is neat, but I'm not really convinced this level of granularity makes sense for personal finances? Or at least it does not for me personally. I find that simply entering all my accounts into one big excel once a month more than suffices to keep track of everything. Maybe I make a typo here and there but it doesn't really matter in the grand scheme of things cuz I'm gonna type a new number next month anyway.

phil-martin6• 7 months ago

I guess it depends on the complexity of ones personal finances? The author had multiple currencies, investments, and who knows what else.

I ran a small business for a while, and I would draw a parallel to that. Once a family's finances hits the complexities of a small business, multiple assets, loans, cars, long term savings, investments, I'd say the granularity is worth it. I would certainly like to try it out.

Etheryte3• 7 months ago

I tick all the boxes you listed after having worked in a handful of different countries, but personally I don't really see the value add. My bank shows an overview in my main currency of choice and so do brokerage accounts. Perhaps to turn the question around, what value do you get out of it for personal finances? I wouldn't really compare to a business too closely since understanding all of your input costs down to a fine level is much more important there, at least in my opinion. The price of flour doesn't matter too much to the cent when you buy a bag every now and then, but it matters a lot when you're buying in tons.

pimlottc• 7 months ago

I like having an archive of PDF statements but the downside is that it’s usually a tedious manual process to download them. There’s so many to track - bank accounts, credit cards, investments, utilities, doctor bills… Every website is different, and they are rarely batch-downloadable. So I tend to be a few months behind at any given moment until I get around to it.

Anyone found a better way to keep on top of downloading statements?

Macha3• 7 months ago

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 mentioned slightly silly multi-line format) XLSX or PDF only, and it appears they've done some "encryption" (really a simple substitution cipher and an embedded font with the characters jumbled up so it renders correctly) to the PDF to prevent this. All the marketing text and headers are in the pdftotext output fine but the actual data is all accented and non-printable characters (also if you copy/paste out).

The substitution cipher does seem stable across a few statements, but still seems like less work to work off the XLSX

lalitmaganti5• 7 months ago

Interesting! You might want to try Tabula in that case.

For that type of "obfuscated" PDFs I've come across, it does well, it's just a lot slower to run than pdf2text.

Macha3• 7 months ago

It appears Tabula also gets the substituted content instead.

What I'm seeing is that for example, POS is substituted to & !ë on every line in every file, etc. I can see by comparing to the rendered PDF for other common text (like my name, the local supermarket, etc) that those all seem to be 1:1 substitutions too.

netsharc2• 7 months ago

I remember seeing an online shop that did the whole font substitution to prevent web-scraping of their prices.. I think they even changed the substitution between elements so one couldn't just do a single pass replacement and get the original data back..

I guess nowadays it's very cheap to run a headless browser, screenshot the output, and run it through OCR.. hah, to prevent that they'd have to design their webpage as 1 full screen Captcha..

inetknght• 7 months ago

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.

Macha3• 7 months ago

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.

abdullahkhalids• 7 months ago

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

symbogra• 7 months ago

I used to do this during my first real job and was tracking every sandwich I bought, then one of the senior engineers told me to stop wasting time with it and make more money, and then I was enlightened.

alexnewman• 7 months ago

Agreed this style of making money may have made sense when the world was more Sane but there’s no way to penny pinch yourself into a house in 2026

michaelrpeskin2• 7 months ago

25 years ago when my wife and I were poor grad students we had to do this. I tracked everything religiously and she cut coupons for the grocery store. We were generally positive about $100/month at best. Tracking it allowed us to not go negative.

As soon as we got real jobs with a real income, we didn't waste time with that. Our philosophy now is to just make sure that we spend well under our means and not track. We don't penny-pinch, but we still keep some of the grad school "do I really need this?" mentality.

Our normal spending is somewhere under 1/2 of our take-home (including mortgage), so we just don't worry about it and keep saving. It helps that we don't have fancy tastes. It's a nice stress free way of saving and we don't have to get neurotic about tracking every penny either.

tonyedgecombe• 7 months ago

Not that a sandwich will make much difference but you have to remember that employers like their staff to be indebted, it makes them compliant.

tossandthrow• 7 months ago

It is not really binary.

I hate budgeting and still save around half my salary.

Though I do realize that this is a different game for some people, where some need it more than others.

miroljub• 7 months ago

Here's another enlightenment for you:

Tracking expenses doesn't take more than 5-10 minutes per day, if you do it daily. With the correct workflow, it shouldn't take more than 30 minutes per month. There are even apps that would do that for you without any effort, though not so perfectly as fine tuned apps.

And now, the enlightenment part: how is expense tracking preventing you from making more money than visiting hecker news, reddit, social media, listening to the radio, watching TV, reading the news, or a million other things? Do you really spend all your waking hours earning more money so tracking expenses for a few minutes would make you make less?

ajb• 7 months ago

This begs the question though, of why individuals still need to do this like a 17th century clerk, when it costs their counterparties fractions of a man-second. Imagine if their was a law which said, every business that takes a credit card has to supply the consumer with the data in standard, machine-processable format (ie not pdf) via their credit account (IE, not making obtaining their email address a condition).

BeetleB3• 7 months ago

And then you get married and have kids and wonder why you have trouble paying the bills despite having a household income in the top 5%.

Then you discover that you really do need to know how much you are spending on sandwiches.

I went through this a bunch of times. Always hoping for an obvious smoking gun expense I could just cut. It always was many little things adding up.

StopDisinfo9105• 7 months ago

If your income is in the top 5% and you struggle paying bills, it's nearly always an issue with to much of your money stuck in mandatory expense: you are over mortgaged, or have to many car loans, or pay too much for the kids schools.

Budgeting can make that manageable by significantly lowering your living standard but small expenses are rarely the root cause.

mfro• 7 months ago

I have looked at beancount and a few other double entry systems several times over the years. None of the applications I've found except for Microsoft My Money (Sunset Deluxe) has felt intuitive and not wasted my time. One of my accounts can't be imported via csv but other than that it is painless. I recommend it to people who just want a quick, free program for simple reporting.

whattheheckheck• 7 months ago

https://simplifi.quicken.com/

This was the cheapest and easiest way to account for stuff for me

tantalor• 7 months ago

You don't need accounting or double-entry bookkeeping to compute net worth.

Net worth is easy: assets - liabilities

You get the figures from your financial institutions and counting up your cash on hand.

The purpose of double-entry bookkeeping is to track the flow of money and to make sure nothing was missed.

But for net worth, you only need the end result, which you don't need any computation for.

The only thing that this solves is tracking money in flight, because during a transfer it disappears from your view of the accounts. There are simpler solutions to this problem than tracking absolutely everything.

bombcar• 7 months ago

You don’t even need to be precise for net worth, whereas double-entry accounting needs to be.

For personal finance the problem is almost always very obvious ($3,000 on candles) and all the spreadsheets and budgets won’t change that.

InitialLastName• 7 months ago

I find there area few things the budgets and spreadsheets help with from a personal finance perspective:

- Values vs reality: A $3000 candle budget is fine, but if you're spending $10/work-day on candles it might be easier to see when that accumulates and you can compare it against your longer-term aspirational goals. This is especially true for less tangible expenses like subscriptions where it can be difficult to see "I'm spending $3000/year on candles I never burn" from ground level.

- Planning and decision-making: It's easier to make good life decisions (e.g. "should I take $job" or "can I buy $house") if you have an accurate accounting of your life expenses.

SkyPuncher• 7 months ago

My wife and I have moved all of our personal, individual spending to a dedicated card each. Sure, some stuff still makes it into other cards, but the simplicity makes budgeting so much easier. Even if we only accurate capture 90% of our spending, we close enough to targets that it doesn’t matter.

My general rule is a simple system that works well enough is better than a complex, but precise system.

We build our budget with this slop in mind, so anything left over is bonus.

StopDisinfo9105• 7 months ago

It's hard to find general truth when it comes to how people keep track of their money.

For a long time, I didn't understand either because I thought everyone was like me always roughly aware of the balances of all their current accounts and with enough reserve that a moderate unplanned event is insignificant but that's not the case.

Some people have a terrible grasp of how much money they currently have. Some work on so tight a budget that even a small deviation triggers a lot of undesirable effets - banks are actually awful for that because they really milk their customers with resource issue.

That's why budgeting is so effective for some people. If your budget is killed by a few overdraft events, just avoiding that will give you a lot of breathing room.

8n4vidtmkvmk• 7 months ago

If you want it to be accurate to the penny, you kinda do, no?

If you transfer 50k from one account to another and want to check your networth before the money comes back in, summing your balances won't help you.

I think this is besides the point though, I suspect OP wants to track networth over time.

thomascountz• 7 months ago

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

spiffytech2• 7 months ago

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.

twodave3• 7 months ago

I can identify with this a lot. I don’t budget as religiously as I used to, but there was a time where I was writing little console apps to process all my recurring stuff and adding one-offs in from a separate file to help project future money. I turned the idea into a website, but really nobody ever used it but me. Shut it down probably a decade ago, and then found YNAB myself, but for the time period it reduced my anxiety by a lot.

callumprentice• 7 months ago

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.

kassner3• 7 months ago

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

I honestly completely ignore my purchased home value. It is not a regular asset because you have to make use of it, you can’t really liquidate it without a substantial change in your life (renting, marrying, going homeless, etc). If you trade it, you’d have to use that money to get some other housing. My strategy in my personal finances is to threat the house as if I’m renting. The money is gone from the balance, the equity isn’t tracked anywhere.

altairprime• 7 months ago

For those trying to use these examples on a Mac and having issues:

    env FAVA_PORT=5050 \
        PATH="/opt/homebrew/opt/bison/bin:$PATH" \
    ./scripts/quickstart.sh [args]

will resolve the weirdness that occurs when trying to access localhost vs 127.0.0.1 (as there is an OS-native *:5000 listener that the fava :5000 binding overlaps) and fix the bison build errors (once you've brew install'd bison).

twodave3• 7 months ago

I didn’t think negative amounts were a real thing in double-entry accounting? Instead some things are debits and others are credits, and whether each of those reduces or increases an account balance depends on the type of account it’s against. Like, you could pay an expense out of a debt account, which would increase the debt, or out of a cash account, which would decrease the cash. Debits and credits should still be equal, though.

simonmic• 7 months ago

Think of it as an intuitive alternate notation. + means debit, - means credit.

twodave3• 7 months ago

But not always. In a liability account, - means debit. And whether you show the balance itself as a positive or negative can be situational. I just find it more confusing for no good reason tbh. This is like intro to accounting stuff anyone would learn in college.

kravosecdonna• 7 months ago

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

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