Better debt tracking in Goodbudget

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  • Updated 12 months ago
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  • (Edited)
I have a set of envelopes in a group entitled Post 20th. One of those envelopes is funded with 88.00 each month and that money get transferred out to a debt envelope (bit like running a credit card that is not paid in full each month). However that entry does not show up on my reports. Investigating further I find that there is "insufficient data". Why is this please? The report is "Spending by Envelope" and the envelopes in question are all monthly expense envelopes.

Thanks
Colin
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Colin Grant

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Posted 3 years ago

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Karisa Russell, Official Rep

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Hi Colin,

That's a good question! Transfers between Envelopes do not get counted as 'expenses' so you won't see those in your spending reports. The Spending by Envelope report should only show you expense transactions.

I hope that makes sense!
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Colin Grant

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Thanks Karisa, but how does that work in the credit card not paid in full scenario? I transfer cash from bank to credit card (not reflected in envelopes therefore) and then transfer cash from credit card budget envelope to credit card outstanding balance envelope. Does that mean an expense does not show up in my budget reports because it is recored as a transfer between envelopes?

Thanks as always
Colin
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Karisa Russell, Official Rep

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Hi Colin, 

That's exactly right! When tracking debt with the method you're describing above, even though we think of those payments as 'expenses' in our heads, we record them in GB as a transfer. Which Goodbudget doesn't count as money spent, but rather money moved around.

I wish there was a better work-around for this. But, the only thing I can think of is to remember to add the amount you paid on your credit cards to your overall spent total, which you can find in the Spending by Envelope report. 

Hope that helps! Thanks
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Colin Grant

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Thanks Karisa, that is not ideal as it makes it very difficult to track loans. Perhaps running a debt envelope is the wrong approach.
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Karisa Russell, Official Rep

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Hi Colin, 

I see! This approach works for some and not for others. Right now, it's the best work-around we have for folks that want to track debt pay-off progress. The trade off is that those transfers won't be in your reports. 

The other option would be to not track the Account or Debt Balance Annual Envelope, and just use a Regular Envelope for the debt's monthly payment. The trade-off here would be that you won't be able to track the progress. 

Hope that makes sense! 
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Colin Grant

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I love GB but this is a serious flaw in my workflow. From what you are saying, Karisa, the software treats debt accounts in the same way as savings accounts in that the only way to move money thereto is by transfer and that such transfers do not show in spending reports as they are just that - transfers from one internal account to another.  I just cannot get my head around the reason to treat payments to any third party account as a transfer by default. The risk is that some reports become valueless as a result.

It seems to me that any movement to a third party account could be either a transfer (movement from one account to another that does not impact envelopes) or a payment (movement to a third party account that does impact envelopes). The decision as to which applies should be user choice surely?

Thanks
Colin
(Edited)
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Karisa Russell, Official Rep

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Hi Colin,

I'm not sure I understand why Account Transfers should show up in reports. For example, I use a credit card that I pay off in full every month. As I use that card throughout the month, I'm accounting for those expenses by adding them into GB and assigning them to my CC Account. When I do that, those expenses are in my spending reports. Then, when I pay that bill via an Account Transfer in GB, if that transfer were to show up in my spending reports, then I'd be double counting that spending in the report. Right?

I think you're maybe making a distinction between CC Accounts that are paid in full every month, and long-standing debts that are being paid off. Maybe? And, in which case, you think folks should be able to decide what type of transfer they are making. 

Am I on the right track?
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Colin Grant

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Hi Karisa,

Yes on track as usual. The problem is that the only kind of debt you service are CCs which as you say are covered if you pay off in full each month. That works well. But what if is longer term debt - how do you deal with those in GB whilst keeping a record of the account in question and getting the payments recorded in reports? If I open an account within GB all I can do is transfer money to it. I cannot make a payment to it and have it reflected in my envelopes. At least I cannot identify a way.
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Karisa Russell, Official Rep

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Hi Colin, 

I see what you're saying! Ideally, you want to be able to see both pieces of information for your longer-term debts. Meaning, you want to be able to see your Envelope Transfers treated as 'expenses' so that they appear in your reports. And, you want to be able to see the debt pay-off progress. 

Right now, unfortunately, GB can only give you one or the other based on how you're tracking the debt with either of the methods we've discussed. 

However, if it's really important that you be able to track your debt progress and see your spending in your reports, there is a work-around that I think can work. I will say that I don't prefer it, cause it can be tricky. But, this would be your work flow when you make a payment, so that it shows up in your reports. 

1. When you make your real life debt payment, you'll add that as a regular expense transaction in GB, and assign it to the Regular Monthly Envelope and Checking Account. This will ensure that the payment appears in your reports. 

2. You'd manually adjust your debt Account Balance to reflect the new balance

3. You'd manually adjust the fill amount of the Annual Debt Payoff Envelope to reflect the new balance, so it continues to match the Account. You can do that by editing the initial Fill from Unallocated that filled the Envelope with the negative sum of the debt. 

As you can see, this requires a little more math and 3 steps, rather than 2. But, I think it will give you all of the info that you want to see.

Let me know what you think of this! 

For anyone else reading this thread and are interested in tracking debt, definitely check out our Starting with Debt article. There, you'll find some tips on how to track debt in Goodbudget. 
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Colin Grant

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Hi Karisa,

I think the ideal would be the ability to actually pay to an account within GB from a budget envelope, that way the transaction would be what it should be - an expanse. I think your workaround would do the job but the chances of forgetting to do it perhaps outweighs the benefit, especially if here is more than one loan and loans are something that lots of/if not most people have - car loans, credit card debt, mortgages etc are common place these days.

For my part there is only one loan which is strategic in that it is interest free so it pays to run the loan and keep the cash on deposit.
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Karisa Russell, Official Rep

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Hi Colin, 

I agree. The chances of forgetting to do the extra steps might not be worth the risk, and could potentially create more headaches going forward.

But, think what you're asking does make sense and would be helpful. For now, what I can do is add your thoughts to our request features tracker. 

Let me know if you have more questions! 
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Colin Grant

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Thanks Karisa. All it really need is for transfers from one cash account to another to have the option to include an envelope. So - it could be a normal cash account to cash account transfer with no expense envelopes involved or it could be a transfer using an expense envelope to record the transfer out as an expense.
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Hi Colin, 

That makes sense! I've included this in the note. 

Thanks!
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Tanveer

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I would like to add that this affects "Income vs Spending" reports too. Loan payment transfers don't get tracked as expenses and hence the net cashflow reported is inflated by the loan payment amount. Any idea when this will be fixed?

May be we can have a setting to exclude some envelops from reports, this way the transfers to those ignored envelops can be considered as expenses in the reports.
(Edited)
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Karisa Russell, Official Rep

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Hi Tanveer,

Thanks for adding this! You're right the Income vs. Spending report will not incorporate Transfers into its tallies.

We're currently not working on changes for any Reports at this time. I'll be sure to update the thread with an update if and when we do.

Can you clarify what you mean in your suggestion? I'm not sure I understand why excluding an Envelope would allow for the associated transactions to be considered as expenses.

Thanks for your help!
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Colin Grant

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That really is a shame, Karisa. It certainly renders my reports pretty much worthless. I really do need to think about this and to be honest I think the GB developers do also.

Thanks for the clarification

Colin
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Tanveer

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Hi Karisa,

My suggestion was essentially to define a scope for reports. By excluding an envelope, the reports would not know such an envelope exists, and hence transfers from any other envelope to the excluded envelope would appear as an expense (to the report). I hope this makes sense.

Also, I agree with Colin. Reports are useless to me with this feature missing. If I want reports to work, then I have to sacrifice debt tracking. It would be nice to have both expense tracking and debt tracking features work at the same time, instead of having to chose between the two. Are there any plans to start development of reports soon?
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Colin Grant

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I agree Tanveer. A debt payment is an expense, in my world anyway :-)
(Edited)
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Thanks, Colin and Tanveer, for weighing in.  It sounds like debt envelopes in particular are the most important type of envelope you'd want excluded from reports in order to reflect debt payments as expenses instead of transfers.  I can certainly see how that would be useful and could change the report results significantly.  Thanks for helping us understand.  We haven't had an awesome way to deal with debt in Goodbudget thus far, and any path to awesomeness would require us to address these kinds of issues well so that debt tracking and reports aren't at odds with each other.

Your note about "in my world anyway" is part of the core issue for coming up with a great approach to debt for Goodbudget.  In some "worlds," where people are paying down existing debt, debt payments are expenses.  And in other "worlds," where people pay off all their balances in full every month, debt payments are transfers.  When we combine the complexity of those two kinds of "worlds" with wanting to make Goodbudget simple, we sometimes have to make a tough choice.  That's not to say I don't want to come up with a solution that's both simple to use and complex enough to handle both kinds of worlds well.  I'd love to!  We're just not there right now.  Not a consolation, I know, but I hope this helps you understand.
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Tanveer

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I understand. Just to elaborate on the "worlds". Not all debts can be paid in full. I understand credit cards are debts which should be paid in full. But, other debts such as auto loans, mortgages do not fit in the "pay in full" category. Hence, my suggestion of option to exclude envelops from reports (This can be option in either the report screens or when creating a new envelop). 

In addition, when monthly debts are paid in full, there are no "Envelop Transfers" involved, only "Account Transfers" (as explained in http://help.goodbudget.com/customer/en/portal/articles/1114587-credit-card-payments). So, the "world" where monthly debts are paid in pull would not be affected by this. Is my understanding right?
(Edited)
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Colin Grant

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I am with Tanveer on this - a paid in full credit card is already recorded in the envelopes re spending so to record the settlement transfer in reports would just create a duplication. Therefore the current practice with CCs is correct. But then there are the instalment debts where the payment needs to be specifically budgeted for each month. True this can be done by paying out of a monthly expense envelope but that does not allow one to run the loan account like a bank account. This is, or will become very shortly, a huge issue for me.
(Edited)
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Karisa Russell, Official Rep

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Hi Tanveer & Colin, 

Tanveer, you're right that in the situation where you pay off the CC every month in full, you bypass using Envelopes when paying the CC payment by using an Account Transfer. Therefore, excluding Envelopes would not make a difference in this case. 

Colin, I understand your point here. I think we've talked about this earlier in this thread where there are pros and cons to either method of tracking debt. And, like Chi-En said, we haven't come up with a great solution that can accommodate both  "worlds" well, and give you all of the pieces of info you'd like to see all in one place. A better debt solution is something we dream about, but we aren't there yet. 
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Colin Grant

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I understand Karisa, but is it really such a stretching ambition? Other software I have seen (and more than one) does it by having off budget accounts to which money can be paid/transferred (call it what you like) from an on budget category. Seems an ideal approach to me.
(Edited)
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Becky Huang, Official Rep

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Hi everyone,

We've been working on a new debt tracking solution within the Goodbudget webapp, and are looking for beta testers to provide feedback. If you're interested in becoming a beta tester, please email beta@goodbudget.com with your Goodbudget username.

Thanks!

Becky