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I've recently (3 months ago as of writing this) got into proper double entry bookkeeping for my personal finances. I've been using GnuCash, though this pertains more to double entry practices than software specific.

My fiancé and I have just closed on a house. We did not pay in equally, and we want me to "pay back" the difference over time. This will be done through purchases for the home, utilities, whatever. We already have a similar setup where we balance out things like our groceries. We track our own food expenses, but we buy them on one transaction on the trip, balancing over time by taking turns paying.

The problem for me is that the whiteboard account is only a half solution. I track my actual expenses in GnuCash, but not theirs. So when I owe say $10, and I pay for $10 of items for them along with $30 for myself, the entry looks like this:

Source Target Debit Credit
-split- Checking -- $40
-split- Groceries $30 --
-split- Whiteboard $10 --

This works as it tracks my total spend, the expense for my food, and reduces my owed amount on the board. So then I look at how my credit card works, which is Card credits to Groceries, and later Checking credits Card. But with that account the debt is created as needed and temporarily. With the house repayment I have the debt all up front.

So the question is, how can I track the flow of money from Checking, have it pay down the existing House Repayment debt, and also have the dollar amount tracked in House Expenses? Essentially the goal is that at a certain point in GnuCash my transaction report totals will balance and I will have put in as much money as my partner, and we can then move to a new balancing system.

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  • I’m sure you’ve tried the whiteboard system with the house payments. What problems did you encounter with it? – Lawrence Apr 2 at 7:11
  • @Lawrence I thought I had described it pretty well, but the whiteboard system works only if I'm letting the paper trail end at the loan. I want the money spent from my account to go against the loan, and also track the actual expense that the money was used on. If I buy $100 of paint I want my Checking to go down $100, the loan to go down $100, and "Remodeling" to go up $100. – Logarr Apr 2 at 14:27
  • If you're claiming the entirety of the payment against the loan, then the Remodeling expense should be on your partner's books, not yours. – glibdud Apr 2 at 15:29
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You can't, on purpose. That's the point of double-entry. You can use a Dollar to pay back a loan or to buy a steak, but you can't do both. You could try to debit from your groceries account to credit the loan, but then you'd end up with a lower number in groceries than what you actually spent at the store.

If instead you use a simple loan payback using Dollars, and then share the expenses, it would work as you want.

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    I appreciate the effort you put into this answer, but you can remove all the relationship advice and boil it down to the "You can't," part. – Logarr Apr 2 at 20:57
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    @Logarr - Done. – Michael Apr 2 at 21:44
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I'm in a similar situation-- a house purchase with unequal initial investments in the down payment, with the intention to resolve the inequality over time. There are two items that are think are relevant to your situation which may make things clearer. I am not an expert on double-entry bookkeeping, so I apologize in advance if this advice isn't focused properly on what you're after:

This is awkward to do precisely with ad hoc spending

It's very difficult to say what spending would have occurred with or without this debt, and you might not be on the same page with what spending should count (you may have a system for dealing with this already). If, for example, your fiancé is not all that interested in repainting, but you are, you buying paint may not be the offset you're hoping for. Why should you paying 100% of the cost for paint that your fiancé doesn't want and wouldn't buy satisfy a cash debt you owe to your fiancé?

This is kind of a silly, small example, but it (hopefully) demonstrates some of the issues with taking a highly structured debt (unequal equity in a house) and repaying it in a very unstructured way. It's made a bit worse with undefined fractions of ordinary, unavoidable purchases (like groceries)-- is 100% of the cost of grocery trip A a always meaningful balance for 0% of the cost of grocery trip B? Maybe, but not always. Paying down your debt to your fiancé is not a household expense. It is a personal expense of yours.

You need more categories

As I understand the accounts book you've laid out, you are wanting individual entries to cover multiple things (ordinary expenses as well as your extra household contributions against the debt) and be recorded in multiple places (the purchase itself and also the "extra" money directed against the debt).

But if you have additional categories or subcategories for spending you can track those things while also enjoying the clarity of the double-entry approach. If your heating bill is $200, and you would ordinarily split the cost evenly, it could be represented as Heat (Total) = $200 and recorded as Heat (Logarr's Portion) = $100, and Heat (Logarr's Extra Payment Against Loan) = $100.

The two subcategories add up to the total category amount but explicitly break out the portion of your payments which cover your ordinary portion (what you would be paying if there were no debt to service) and your extra portion meant to offset the debt. There is no ambiguity about what money was directed to which category or purpose.

I, personally, like the idea of fixed payments against what you currently owe to your fiancé with regard to the house because that is clearer. Especially if you spend the money in a way that makes your equity in the house obviously more equal over time (so, if you each pay 50% of the mortgage, you making extra payments on top of that against the principal directly adds to your share of the house's equity in a way that the cost of a dinner out would not). But that sort of approach may or may not suit you for any number of reasons.

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  • The more testing I do in GnuCash the more it's looking like I will indeed have to just pay the money back as a separate action to keep things clean. Your example with the heat is something I can do as-is, but reporting that $100 that went to the loan as the part my fiancé contributed to the home expenses is where it gets tricky. I could ear mark those entries with a tag that I could filter with for the duration of the loan. – Logarr Apr 2 at 21:29
  • I will say we've been doing the ad-hoc spending for a couple years now (far more than just groceries) and it has gone very smoothly. We clearly define when a purchase for both of us is an event split, proportional (groceries), and a "gift" (like a dinner date). So splitting house expenses like that is not the issue. It's tracing funds that go towards paying off the loan as having been earmarked for my fiancé's portion of the expense that seems impossible with double-entry. – Logarr Apr 2 at 21:33
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    @Logarr If it works for you, it works! My comment about the ad-hoc spending is specifically around a major asset in which you both have an interest. I do ad-hoc expense equalization with my SO all the time, but we don't care too much about the precision; one meal out is often in line with another. But if worse came to worse with our house... well, I wouldn't want to be stuck arguing that me buying movie tickets and takeout food should give me 50% equity in a property for which I've contributed less than 50% of the money. If you're both on board, great, but you can't go back for a do-over. – Upper_Case Apr 2 at 21:38

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