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I'm fairly new to GnuCash and this kind of accounting. I'm trying to work out how to receive gift money as cash and spend it via a credit card.

I've also started looking at reports so I can see how I'm fairing month-to-month and I'm thinking the Cash Flow report shows pretty well what I want (although I've added in Liabilities:CreditCard so I see those actual transactions rather than just the monthly credit card bill). I don't think I really want to see anything involving gift money on this report since it isn't really part of my normal money/spending and it might not be spent straight away, so cleaner just to not show it rather than it look like I had a really good month when it's my birthday and a really bad month when I spend it?

How should I go about this kind of scenario?

My Current Thinking

For example, let's say I've received £100 cash as a gift. I pay this into my main bank account. I want to spend £75 of it on something, but it needs to be paid by credit card (I'll keep the remainder for the time being). At the end of the month, there is a transaction from my main bank account to my credit card to pay off the balance (let's say £200 total), £75 of which is this gift money.

I'm think the transactions I need to record would look something like:

Pay gift money into the bank, putting it in a sub-account:

  • £100 from Income:Gift to Assets:BankAccount:Gift

Buy things with the credit card, including something with gift money:

  • £125 from Liabilities:CreditCard to Expenses:OtherStuff
  • £75 from Liabilities:CreditCard:Gift to Expenses:Gift

Pay the credit card bill (£200), but modify it to include a split for the gift money:

  • £125 from Assets:BankAccount to Liabilities:CreditCard
  • £75 from Assets:BankAccount:Gift to Liabilities:CreditCard:Gift

The Gift sub-accounts should eventually have 0 balance once all the gift money has been spent and credit card bills paid.

As for the Cash Flow report, I'm thinking I just need to exclude the Assets:BankAccount:Gift and Liabilities:CreditCard:Gift accounts? This should effectively hide all those gift transactions?

Does any of this sound reasonable? Am I missing a better way of doing things? (I suspect I'm over-complicating things...)

Update (19 Jul)

A common theme of the replies so far seems to be suggesting that my approach is perhaps worth reconsidering.

My original thinking was, if we're having a conversation about how much we earnt/spent last month, "gift money" wouldn't be part of that conversation (since that's much more personal/discretionary/for special treats, etc, than "normal" money) and so I was thinking of keeping it out of the reports. In terms of "how did we do last month?", it would be irrelevant if someone had received/spent gift money.

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  • Why Liabilities:CreditCard:Gift instead of just Liabilities:CreditCard? I understand why an assets Gift subaccount exists, but Liabilities:CreditCard seems like too much added complexity.
    – RonJohn
    Jul 19, 2023 at 14:37
  • @RonJohn You're probably right about too much complexity. I've added an update to my original question to try to clarify my thinking, but basically Liabilities:CreditCard:Gift was to provide a mechanism to exclude those transactions from reports Jul 19, 2023 at 22:04
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    There are justifiable reasons for added complexity... :D
    – RonJohn
    Jul 19, 2023 at 22:06

2 Answers 2

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The process that you've proposed will work - but I agree that it's a bit over-complicated.

Rather than creating all those Gift subaccounts, you could just identify transactions into or out of your bank account and credit card accounts by including the word "Gift" in the Memo field. This is then searchable, and the Find feature of GnuCash will collect all of the relevant transactions onto one screen for you.

And do you really need to hide transactions from your Cash Flow? The month of your birthday actually was a really good month, and the record should show that.

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  • Your last point does make me wonder if I'm thinking about this the wrong way. I've updated my original question to try to clarify my reasoning. Basically it's because the question "how did we do last month?" doesn't really include gift money Jul 19, 2023 at 22:10
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Why are you treating gift money differently from whatever your regular income is? It's just money.

If for whatever reason you explicitly want it reserved to particular purposes, you might consider tracking it as a different currency (an artifical one, that you make up just for this), call it say G£. Record gift income in G£, record expenditure of gift money in G£, with the exchange rate set at G£ 1 == £1.

Customise your 'spending' reports to only report spending in £.

(I don't know to what extent GnuCash allows you to make up artificial currencies)

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  • It’s completely reasonable to track different income sources.
    – RonJohn
    Jul 19, 2023 at 8:24
  • "Why are you treating gift money differently from whatever your regular income is?" basically because conversations about "how did we do last month?" don't need to factor in gift money Jul 19, 2023 at 22:07

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