Money Dance-track split expenses

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Topic Author
teniralc
Posts: 288
Joined: Sun May 10, 2009 8:57 pm

Money Dance-track split expenses

Post by teniralc »

My daughters are 16 and 19 years old. We sometimes split the cost of things like an article of clothing (jeans cost $20-they pay $10, we pay $10). I use Money Dance to track our income/expenses. Any suggestions on how to categorize when the full charge goes on our credit card statement and they pay us their half in cash? Should I just make a blanket category of income, "reimbursed from girls?" I would like to actually know what it is for at the end of the year, so if they bought a certain amount in clothing, movies, lunch, etc., I would like to track what we pay in those categories. Is it suggested that I just make multiple sub-categories of "reimbursed from girls?" Open to suggestions. Thanks very much!
Carson
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Joined: Fri May 09, 2014 3:26 pm

Re: Money Dance-track split expenses

Post by Carson »

I understand the mental accounting. We have a savings account for home improvement I started some time ago. I pulled from there when we undertook major improvements that the money was set aside for. However, instead of just netting it out and our finacials showing no $ spent, I show it as two separate lines. $k for the improvement and ($k) for the savings account. It works for me.

IMO, you would have to pick between what is more important for you to track at the end of the year do you want to see $20 debit for clothing and $10 credit for receipts? Or do you want to see that YOU paid $10 OOP? As you suggested, would you want to have separate receipt categories depending on what they are reimbursing you for?

I don't know anything about the program you are using but in accounting it's called having a 'contra account'. So it's a legitimate accounting thing.
Topic Author
teniralc
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Joined: Sun May 10, 2009 8:57 pm

Re: Money Dance-track split expenses

Post by teniralc »

Carson wrote:I understand the mental accounting. We have a savings account for home improvement I started some time ago. I pulled from there when we undertook major improvements that the money was set aside for. However, instead of just netting it out and our finacials showing no $ spent, I show it as two separate lines. $k for the improvement and ($k) for the savings account. It works for me.

IMO, you would have to pick between what is more important for you to track at the end of the year do you want to see $20 debit for clothing and $10 credit for receipts? Or do you want to see that YOU paid $10 OOP? As you suggested, would you want to have separate receipt categories depending on what they are reimbursing you for?

I don't know anything about the program you are using but in accounting it's called having a 'contra account'. So it's a legitimate accounting thing.
Thank you for your thoughts. And thank you for the information about a "contra account." I think I will settle on tracking what "we" pay in each category, as the girls have their own accounts and use their own money for various things. I don't track those accounts, so this will just allow me to track "my" account and know what we pay for them in the categories. Again, thank you for your help.
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Lacrocious
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Location: Wisconsin

Re: Money Dance-track split expenses

Post by Lacrocious »

I use Quicken, but the concept is the same for MoneyDance - follow the money. As Carson wrote, there are multiple ways to look at this. This is what we have done in the past:
  • 1) Create a "Cash" account. This account can be a clearing house for cash to/from the girls or other things. Normally, I keep this account with a zero balance. You could create one for each girl if you want, but it isn't required.
  • 2) If you charge $20 jeans to your credit card - you put the whole amount as a charge with "Clothing:Girl1" for the category. This reflects what you bought and what you owe the CC.
  • 3) When Girl1 gives you a $10 bill - add a deposit of $10 to your cash account, from Girl1, with a note - for Jeans on 1/12/2016 and a category of "Clothing:Girl1". You have the cash in-hand.
  • 4) When you deposit the $10 in your checking account to cover the future credit card bill - transfer out of Cash over to Checking.
This gives some reporting options:
  • 1) How much did I spend on clothing this year in total: Do a spending report for all accounts, including your cash account. Your net spending in the category "Clothing:Girl1" will show of $10. If you show transactions, you will see the -$20 in your CC account and +$10 in your Cash account
  • 2) How much did WE (me and the girls) spend using my CC on clothing: Do a spending report for all accounts, except the cash account. Your total spending for "Clothing:Girl1" will show of $20. Since you excluded the cash account with the deposits from the girls, you see the total out of pocket spent on the category.
If you do this consistantly, your cash account always has a balance of $0 - as you get the $ from the girls and then deposit into your checking account to cover the CC bill. At this point in our lives I would just pocked the $10 and cover the CC bill. If it was a bigger amount, I would track it this way, and have done so many times (clothing for the girl and computer games for the boy).
- L

Note - I also use this account if I get some checks to deposit to my checking account. I record each check in the Cash account, because that is what a check really is. This way I record a transaction for each check and can record who it is from and why. When I deposit in the bank, it is a single transfer from Cash to Checking to reflect the deposit. It works well.
Topic Author
teniralc
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Joined: Sun May 10, 2009 8:57 pm

Re: Money Dance-track split expenses

Post by teniralc »

Thank you for the extremely helpful and thorough reply. $10 here and there is certainly not a big deal, but with two teen girls, clothing definitely adds up by the end of the month. I will try this cash account method. Thanks again!
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Lacrocious
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Location: Wisconsin

Re: Money Dance-track split expenses

Post by Lacrocious »

Your welcome. That comes from many years of Quicken then MS Money and then Quicken usage. The use of a cash account has been a life saver with trying to do more complicated things like mortgages with points, refinances - anything where you need to split up a pool of money into various categories. If you keep the balance at 0 - then you are accounting for the in-flows and out-flows appropriately.
- L
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