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finance software

budget-pie-chart

After writing my “Using GNUCash to manage your personal finances” series I have been getting quite a bit of traffic looking for information on Budgeting in GNUCash. I touched on it lightly but I don’t think I really did it justice.

The way I see it there is three schools of thought on budgeting in GNUCash. The first uses the included budgeting system to set and track your monthly budgets, the second involves an envelope system made up of GNUCash accounts, and the third uses GNUCash reporting along with some means of setting and tracking your budget outside of GNUCash.

Built in Budget Tool

To get started with the built in GNUCash budgeting tool you need to first create a budget to work from, this can be done by going to the File Menu and selecting New -> New Budget ->. This will bring up a listing of all of your GNUCash accounts and a timeline of months.  To set a budget amount for each category you can either enter the amount directly in the corresponding field or have GNUCash estimate your budget based on previous spending.  Under the options you can set the name of your budget, and the budgeting period either daily, weekly, monthly, or yearly.  Once you have saved your budget you can come back to it anytime by going to File -> open -> open budget.  Tracking your progress is as easy as running the budget report where you will see your actual expenses compared to your budgeted and if you mark the right option you will see the variance.

Because of the way GNUCash tracks your paychecks and loan payments you aren’t going to see your loan spending as a whole payment but as a separate expense for interest and principal. One under liabilities, the other is under expenses. You can pick and choose which accounts you want to see in the budget report by deselecting those you don’t want under the report options. If you rename the report it will allow you to save it as new report so you don’t have to customize it again.

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