The first step to managing your personal finances is to have a practical chart of accounts. Think of all the financial institutions you interact with: banks, credit cards, your employer, utility companies, insurance providers. Each of them represents an account with a balance that increases or decreases over time.
Create an account
From the accounts tab in Gnucash, right click and select New Account.... Your first one will be your main bank account, an asset account. Give it a name and confirm the currency. In the Opening Balance tab, enter the current balance and today's date.
In the database
You can see your new account in the database by querying the accounts table.
Notice your new account has a parent_guid that matches the guid of another account. This is how account hierarchies are maintained.
Types of accounts
To summarize the Gnucash Concepts Guide, everything in the accounting world can fit into five groups, or account types. Here are some ideas for accounts you can create.
I will regularly update this page to provide links to more detailed posts for the examples below.
- Assets
- Liabiliies
- Income
- Expenses
- Equity
- Opening balances
- Everything else, technical accounts, miscellaneous
If all these accounts seem like too much for you, just create the accounts you need now. Do not feel compelled to preemptively make accounts without any transactions to put in them. As you become more comfortable with the basic principles of Gnucash, you will be able to create and rearrange accounts to fit your needs.
Account codes
You may find it helpful to assign codes to your accounts. If you plan to use SQL for analysis, a practical coding can make it easier to group accounts together in your queries. For example, when I want to query all my credit card accounts I use the regular expression ^201/d00 since I set up all my credit card accounts to start with 201.
Account codes need not be entirely numeric. You can use abbreviations or shorthand codes.