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Managing your money with Grisbi

By Dmitri Popov on May 19, 2005 (8:00:00 AM)

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"Take care of the pence, and the pounds will take care of themselves," wrote Lord Chesterfield to his son in 1750. Today, this simple advice is as difficult to follow as it was 255 years ago. But we are lucky to have some powerful open source applications that make the task a bit easier. The Grisbi project aims "to provide you with the most simple and intuitive software for basic use," but this doesn't mean it is light on features. It supports multiple currencies, account reconciling, import/export of QIF files, and reports, and all this functionality is wrapped up in a user-friendly interface and available for a variety of platforms, including Linux, Windows, and Mac OS X.
If you've never used software to manage your personal finances, getting started with Grisbi (or any similar application, for that matter) can be a bit tricky, but fear not: This article will help you come to grips with Grisbi's basic functionality.

Configuring Grisbi

When you start Grisbi for the first time, you will be greeted by a blank screen. Before you begin adding accounts you should change a few of Grisbi's preferences. By default Grisbi operates in euro currency, so if you want to use dollars or another currency, you have to add it via Edit > Preferences and Resources > Currencies. Next, add your bank via Resources > Banks.

Now you can create a new account (File > New account file) and choose a type of account. There are four account types in Grisbi: bank, cash, assets, and liabilities. Let's start with something simple. Choose Bank account from the drop-down list and press OK. You will be dropped into an empty account form, where you can fill out the relevant fields.

In the Bank section select the bank and enter the branch code (optional) and the account number, and fill out the fields in the Balances section. The Initial balance field should contain the amount you currently have in your bank account. You can use the Minimum authorised balance and Minimum wanted balance fields to define thresholds for the account. For example, if you are allowed to have an €1,000 overdraft on your account, then you can set the authorised minimum to -1000. But in most cases you would want to have a minimum amount in the account, for example €50, which you should enter in the Minimum wanted balance field.

The next step is to add one or more third parties -- people or companies you give or get money from. Examples might include Amazon.com, a supermarket, news agent, or your local bakery. You can add third parties manually or let Grisbi take care of it when you create a new transaction; just type the third party you want (e.g. Amazon) in the Third party field, and Grisbi will add it to the list.

Every transaction can be filed under a category. Simply put, categories allow you to specify what the money has been spent on. For example, if you buy a train ticket you may want to file it under the Transport category, while the Food category is a good place for all your grocery purchases. Categories can come in handy by the end of the month, when you are trying to answer the inevitable question, "Where did all my money go?" Grisbi provides a comprehensive list of possible categories and sub-categories, but if you want to add other items to the list, you can do so easily under the Categories tab.

Adding transactions

Now you are ready to add your first transaction. Let's say you've purchased a computer book at Amazon. Switch to the Transactions tab and double-click on the first line in the transactions table. This will open a new transaction form, and Grisbi conveniently inserts the current date for you. If you want to change the date, double-click on the date field and select the desired date from the pop-up calendar. Choose Amazon from the Third party drop-down list, enter the book's price (let's say, €23) in the Debit field, and select a category (e.g. Leisures:Books) and the payment method from the respective drop-down lists.

You may also notice a field called Budgetary line. This field allows you to specify more precisely the kind of purchase you make. For example, you can create separate budgetary lines for computer books and fiction. Then in the Budgetary lines section you can see how much you spent on each type of book. Another example: when you go on vacation and purchase a train ticket, you file the ticket purchase under the Transportation category and the Vacations budgetary line, but if you commute to work by train, then you file the ticket purchases under the Transportation category, but the budgetary line will be Work.

Finally, the Value date field is used to enter the date when the bank actually credits the money (which may be different from the day the money was spent), while the Voucher field is used for data associated with the transaction -- for example, an invoice number if you are paying an invoice.

Scheduled transactions

Grisbi also supports scheduled transactions, which means that you let the application take care of making recurring payments. For example, if you subscribe to a computer magazine, you might want to set Grisbi to automatically register the yearly subscription renewal.

To add a new scheduled transaction, switch to the Scheduler tab, click on the first line of the transactions table, and fill out the fields in the transaction form. Set the Modification field to 15/05/2005 if you want the payment to be registered on 15 March of every year. Don't forget to set the Recurrence field to "Yearly." If you want to stop the scheduled transaction after a certain period, then fill out the Limit date field. For example, if you plan to cancel your magazine subscription after two years, then enter 15/05/2007 in the Limit date field.

The handy calendar in the top left corner of the Scheduler window displays the dates of the scheduled transactions in bold, making it easy to keep an eye on them. You can also specify how the transactions are shown in the table. You can view all scheduled transactions for the currently selected month, two months, year, or you can define a custom view.

Reconciling

Grisbi can also help you reconcile your transactions against your bank statement. When you receive a bank statement, choose the account and press the Reconcile button.

Enter a reference into the Reconciliation reference field. References allow you to identify the particular reconciliation operation, so you can easily locate it later. If you give the first reconciliation operation the reference number 2005-1, then Grisbi will automatically increment it for the next operation (2005-2, 2005-3, and so on). When you reconcile the account for the first time, the Balance field will contain the amount equal to the initial balance. Now go through the list of transactions and check them against your bank statement. To mark a transaction as reconciled, click in the C/R column. This will add a P mark to the transaction, and the Checking field in the Reconcile window to the left will be updated accordingly. When you have finished clearing transactions, enter the amount from the Checked balance field into the Balance field next to the current date. If the Variance field at the bottom of the window is zero, you're in balance. (If it's not, there's a discrepancy between your record and the bank's. Either you've missed a transaction, an amount is wrong, or the bank has made an error.)

Reports

Grisbi features powerful reporting capabilities, allowing you to present the data in numerous ways. Although Grisbi offers an overwhelming number of reporting options, the process of creating a report is fairly simple. Created reports remain stored in Grisbi, so you can view and customise them whenever you want. Of course, you can print reports and export them in XML format if needed.

Grisbi's main advantage is its common-sense approach to money management. Even if you've never tried to use software for managing your finances, you will quickly figure out most of Grisbi's features. This and the ability to import QIF files and run on a variety of platforms makes it a good choice for users who want to keep tabs on their personal finances.

Dmitri Popov is a freelance writer whose articles have appeared in Russian, British, and Danish computer magazines.
Dmitri Popov is a freelance writer whose articles have appeared in Russian, British, US, German, and Danish computer magazines.

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