MoneyWell: May 2008 Archives

Using a delay debit card with MoneyWell is fairly simple. The bit I found a little tricky is setting things up.

First, what is a delay debit card? Is is a payment card whose balance is automatically debited on some other account, the “main account”, at a specific interval, typically every month. If this card has its own statements, you don't want to enter the transactions paid with it directly on the main account as it will make reconciling problematic: these transactions won't appear in the main account statement (there will just be a global monthly payment for the card), and cherry-picking these transactions when reconciling the card statement is not fun at all. And I can attest for this: this is how I used to do it with my previous finance manager.

Using MoneyWell, the simplest way to proceed is to create a new account (of type Credit Card) in which transactions paid with the card will be entered. Relevant expense buckets are also assigned when entering these transaction. At any moment, the due balance that will be paid at the end of the month is simply the current negative balance of this account. To reflect the automatic payment when it occurs, simply enter a transfer from the main account to the card account without giving it any bucket. This way, both the main account and the card account exactly reflect the statements.

The part I found tricky when setting this up was when dealing with the initial balances and buckets. I did not want to wait until my card payment occurred to start using MoneyWell, and I did not want to enter past transactions: I only wanted to get started immediately with the current balance. The simplest solution I've found (and it may be so simple it does not warrant a post) is just to do what I've just said: start with the current balance.

To be more precise, when creating your main account, enter its current balance, even if there are pending transactions on the card. Assign this balance to one of your income buckets, as it is money you have ready to allocate for spending. At this point you may say: “But I've already spent some of it with my card!” And you would be right, we're going to take care of this next.

The second step is to create and set up an account for the card. The creation part is straightforward: click on the gear button at the bottom of the window and choose “New Account”. (You can also directly type ^⌘N.) A sheet will then appear, where you can enter the name of the card, change the account type to “Credit Card”, and enter a negative initial balance corresponding to the current amount you have already charged on the card. You then need to assign a bucket to the (negative) starting balance, by selecting the starting balance transaction it in the Credit Card account and changing the bucket in the right panel. Simply choose the same income bucket as before: this way, you make sure this is money already spent that you won't be able to allocate anymore. All your accounts are ready, you're all set to go!

This post is part of a series of tips on MoneyWell. The previous posts included an overview of why I chose MoneyWell and suggestions on how to track spendings in MoneyWell. For the list of all posts, explore the MoneyWell category.