The five account types

Concepts

Every account in Balanced has one of five types. The type says what the account is for and how to read its balance.

You choose the type when you create an account. In the journal overview, the Accounts section lists your accounts by type, in this order:

• 🏦AssetsWhat you own: bank accounts, cash, savings, money others owe you.
• 💳LiabilitiesWhat you owe: credit cards, loans, mortgages.
• 🛒ExpensesWhat you spend on: groceries, rent, fun. Your budget categories.
• 💶IncomeWhere money comes from: salary, gifts, interest.
• ⚖️EquityStarting balances and corrections.

What you have

Assets accounts hold your checking account, savings, cash in your wallet, and money someone owes you. A positive balance is money you have. When your salary arrives or you pay for something, an asset account is usually one side of the transaction.

Next to each asset account, the overview shows its balance as of today. If some of its transactions aren’t cleared yet, the cleared balance appears underneath: the one your bank should show. Cleared and uncleared explains the difference.

What you owe

Liabilities are credit cards, loans and a mortgage. A negative balance is how much you owe, and the overview shows it in red. Paying with the card pushes the balance further below zero; paying the card off brings it back towards zero.

Credit cards and debt shows how cards and loans fit into your budget.

What you spend on

Expenses accounts are for everything you spend money on: groceries, rent, fun, insurance. Your expense accounts are your budget categories. In the books, an expense account’s balance grows with every purchase: it’s the total you’ve spent there.

In the overview, though, each expense account shows how much of its budget is still available, in green, orange, red or gray. Planned spending explains the colors.

To keep a long list tidy, give related categories the same Parent Group, such as “Home” for Rent, Energy and Internet. The overview and the budget editor then show them together in a folder. Only expense accounts can have a group.

Where money comes from

Income accounts are for your salary, gifts and interest. Because money leaves these accounts on its way to you, their balance is negative: the total you’ve earned so far. The monthly summaries and charts show income as a positive amount. Money moves explains why the minus makes sense.

The starting point

When you start using Balanced, your accounts already hold money. An Equity account such as “Opening balances” is where that money comes from in your books. You also use it for corrections, when Balanced and your bank disagree and you can’t find out why. One equity account is enough to get started.

Emoji, color and type

Every account has a name and can have an Emoji and a color. New accounts get the color of their type: blue for assets, red for liabilities, orange for expenses, green for income and gray for equity. You can change both at any time. An expense account with an emoji also appears as a small ring in the overview’s Budget section.

The type is different: you can’t change it once the account exists. If an account ends up with the wrong type, create a new one with the right type and use that instead.

Under the hood · for the curious

Your opening balance moves money from equity into an asset account:

Opening balance

Assets:Checking

+1,200.00

Equity:Opening balances

−1,200.00

Balanced

0.00 ✓

Because every transaction adds up to zero, the balances of all your accounts together add up to zero too:

Assets + Liabilities
  + Expenses + Income
  + Equity = 0

Move a few terms to the other side and you get your net worth, which the Net Worth chart shows:

Assets + Liabilities
  = −(Equity + Income
      + Expenses)

What you have minus what you owe equals what you started with, plus what you’ve earned, minus what you’ve spent. With the opening balance, the salary and the groceries from Money moves, that’s 1,200 + 2,500 − 42.80 = 3,657.20.