How to track multiple savings in a single bank account with double-entry accounting

Question

I have multiple savings that I want to track, eg - new car, vacation, etc. I'm storing all the money for those in a single bank account. I'm not sure how to track this via double-entry bookkeeping. For example:

credit cash                $ 300
debit  bank account        $ 300
?      savings - car       $ 200
?      savings - vacation  $ 100
?      offset savings      $ 300

I assume the savings accounts would be Asset accounts. I'm not sure what I would use to offset them. Liability accounts of Future Car and Future Vacation?

Answer 1

In many personal finance applications, you can create sub accounts where the total balance shown on the parent account is the parent account's balance plus the balance of any sub accounts.

You could use this type of system where the parent account is your savings account and the sub accounts are your savings goals. Then you can debit your main savings account and credit the appropriate sub account when setting aside money for that goal. This should still show you the correct total balance in your savings account while showing how much you have saved towards your different goals.

Answer 2

Presumably, you are putting cash from a bank account into a savings account. With this in mind, you should debit your savings account and credit cash.

The fact that you have only a single physical savings account does make it much more complicated to do entries. To simplify, you can name all savings account (e.g. car, vacation) with the savings account's number so that you know you need to add those up together or if your software allows it, roll them up under the same title (e.g. Savings - Bank acct # 1234).

When you consume your savings (e.g. car repair) you should debit the appropriate expense account and credit the appropriate savings account (e.g. Savings - Bank acct # 1234 - Car).