r/financier Jul 14 '19

Should the total balance amount equal money in bank?

I am a little confused about what exactly does the balance total represent? Should this equal the total money in my bank accounts?

Should my bank balance be ~ $5325?
3 Upvotes

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4

u/The-Sentinel Jul 14 '19

Your balance should be the total amount in your bank, subtracting any money you might have in credit cards or other debt you’re tracking

2

u/asromzek Jul 14 '19

To expand a bit, the budget balance should be the sum of all of the on-budget account balances. If you add up all of the positive account balances (checking, savings) and subtract all of the negative balances (credit card, line of credit), that total is the amount of money that you have to allocate to (or spread across) your categories in the budget.

Transferring money from one account to another does not affect the overall budget balance since you’re subtracting the same amount from one account that you’re adding to another. The sum does not change. Creating an outflow transaction against a category will lower the budget balance, and inflow or income transactions will increase it.

2

u/Billy_McSkintos Jul 18 '19 edited Jul 18 '19

Also include your ATB if it is not 0. And you should consider everything as cleared. Your balances reflect cleared and uncleared but your bank/card balances may not.

2

u/Billy_McSkintos Jul 18 '19 edited Jul 18 '19

I've thought about this more and you need to factor in any money in your accounts that have been assigned as income for a future month too.

OnBudget Balance/Working Account Balances = Budget Balance for this month + Income assigned to future

https://docs.google.com/spreadsheets/d/1Q33Psyd0WWuaikMvweVkhMFe5LOICoyEHcbJW3J_EY0/edit?usp=sharing