[this is a ymoyl update.]
as of the first of the year, i started using gnucash instead of cbb. it’s easier to use, and gives me a much more detailed and accurate account of my finances. for example, i have money which is in trust to me for a couple of groups i’m involved with. they aren’t big enough to require their own bank accounts, so their money lives as virtual accounts in my checking account. previously, i just kept two deductions at far future dates in my cbb checking account record, representing the money belonging to them. as money was donated to them or i paid bills for them, i adjusted the deductions accordingly. this was tedious and error-prone. now, i have liability accounts set up, and it’s all handled automatically. i also keep liability accounts for reimbursed expenses, and can tell at a glance what people owe me. when i sell something on ebay, i record the payment i receive as a split transaction, with part of the total recorded as sales income and the other reimbursing “liabilities: reimbursed expenses: shipping: ebay”. it’s wonderful.
two items i’m recording in much greater detail are my paychecks and mortgage payments. before, i just recorded them as lump sums; now, i break them into their constituent parts. i record which parts of the mortgage payments go to interest, principal, and escrow. i balance my escrow account, and so track property tax payments, etc. instead of just recording my net pay, i now enter all the information available on my paychecks: net income, federal taxes, state taxes, social security taxes, medicare taxes, and health insurance.
previously, the only time income taxes showed up in my accounting was when i paid them or received a refund once a year. now, i’m tracking them as part of my monthly expenses. for continuity, this has meant that i’ve had to adjust all the figures on my graph for the last five years. i got out my tax records and found out how much had been withheld from my pay each year. i divided this by 12, and increased both the income and expense figures for each month by this amount:
so the graph still has the same curve, but it’s been raised so that i’m now tracking the gross income and paycheck withholdings each month.