How to manage loans, debts and installments.

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Cobra
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How to manage loans, debts and installments.

Post by Cobra »

I have doubts about how to manage loans, debts and installments.
To simplify, I do not consider the interests, but only the amounts.

Case 1: Loan
John lends me €1,000 which I pay back €100 per month.
However, I could still apply for a loan and therefore the account remains open.

Case 2: Debt

I owe €1,000 to Dave which I pay back €100 a month.
Once the debt is extinguished, the account can be closed.

Case 3: Installments
From the ACME supplier I purchase services every month that I pay regularly.
However, an invoice is very high and I agree to pay it in 3 installments; meanwhile, I pay the other new bills regularly.

I thought of creating:
  • A bank account
  • A loan account for John
  • A term account for debt for Dave
  • Three categories: John, Dave, ACME
I register the amount of the Debt and the Loan as an Initial Balance.
I transfer money from the bank account to these two.

I record the ACME invoices every time I pay them, but I have no idea how to record the installment since it is a new short-term debt.
Thanks in advance for any advice and help.

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dbolton
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Re: How to manage loans, debts and installments.

Post by dbolton »

I would say it depends on your preferences and what information you want to track in Money Manager EX.
  • To track how much you paid, categories are sufficient. You can filter transactions by category, or see totals in Categories > Summary.
  • To track remaining balance on a loan or record interest transactions, I recommend an account.
    In Money Manager EX, I'm not aware of any functional differences between bank, loan, and term accounts. So I think you could use whichever type makes the most sense to you. That said, Money Manager EX does group the accounts by type on the homepage and the left navigation pane.
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