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GnuCash: Free Software for Balancing Your Checkbook (and More)

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Nicholas emailed me with this question.

I’m trying to find some kind of free accounting software for balancing my checkbook, and that sort of thing. I already use Mint.com, but it isn’t much good if I plan on writing a check, or if I want to create a recurring transaction.

I don’t need something to actually connect to my bank account, although it would be convenient to be able to import transactions. I just need to be able to keep track of everything. Right now I’m using Excel, but Excel really isn’t meant to be this kind of tool. I’d appreciate any recommendations you might have. Thanks!

Nicholas is right about Mint, Yodlee MoneyCenter, and other online services. These websites rely on downloading information from banks, and banks don’t know when you write a check unless you have sophisticated business services. For Nicholas’s purposes, these services fall short.

If Intuit Quicken and Microsoft Money Plus are out of the question — and Nicholas’s requirement according to his email is free — then there aren’t many solutions available.

I would suggest GnuCash. GnuCash is free accounting software available for Linux and other flavors of Unix, Mac OS X, and Microsoft Windows. Like Quicken and Money, GnuCash allows you to track your financial accounts, including cash, credit, and investments.

Unlike Quicken and Money, the designers of GnuCash take an approach more true to professional accounting principles like double-entry accounting. While the more popular (and more expensive) software programs use “accounts” to represent assets and liabilities and use “categories” to record expenses and income, GnuCash considers assets, liabilities, income, and expenses to all be accounts. That means that every transaction is recorded as a transfer between two accounts.

It’s a little weird at first, but it begins to make more sense as you have more practice.

GnuCash will let you easily track your checkbook. When you create a new book of accounts (which GnuCash calls a file because the database is stored in a computer file), the default options include a checking account. You can use the default checking account, or add more if you have more than one to track, to keep your checkbook up to date.

When you write a check, you could record a decrease (GnuCash calls this a “withdrawal”) to your checking account and an increase (GnuCash calls this an “expense”) to the appropriate expense account, such as your telephone expense account. In this manner, your checking account in GnuCash will always match your checkbook. You will be able to see at a glance how much money you have truly available in the account, to help prevent overdrafts.

The problem with tracking a checking account is the reconciliation between your book of accounts (ledger) and the bank statement. If you have outstanding checks — checks you have sent out but haven’t been cashed by the recipients — then the balance in GnuCash won’t match the balance at the bank.

While the above method will be fine for most people and has the benefit of tracking the usable balance in your checking account, if you want to keep a true reconciliation, then you need an additional account. The other option is to create a liability account called “Outstanding Checks.”

When you write a check, record an increase to Outstanding Checks and an increase to the appropriate expense account, perhaps the telephone expense account like above. Then, once the phone company deposits your check and your bank has decreased your balance, you can record a decrease to Outstanding Checks and a decrease to your checking account.

Both options are accurate, so it’s up to you which method to use. If you download GnuCash, both options are free as well. GnuCash does more than just balance your checkbook, as well. It does more than you might expect from free software. Here are some of the features you might find useful:

  • QIF and OFX support, so you can download files from your bank and reconcile your accounts
  • Schedule recurring transactions
  • Track your investment accounts and download stock prices
  • Use multiple currencies
  • Generate reports and graphs to illustrate your finances

There’s one drawback. If you want to run GnuCash on an operating system other than Windows, you’ll have to “compile” the software yourself. There are instructions for installing and using GnuCash here.

Updated March 21, 2011 and originally published July 18, 2008. If you enjoyed this article, subscribe to the RSS feed or receive daily emails. Follow @ConsumerismComm on Twitter and visit our Facebook page for more updates.

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About the author

Luke Landes, also known as Flexo, is the founder of Consumerism Commentary. He has been blogging and writing for the internet since 1995 and has been building online communities since 1991. Find out more about him and follow Luke Landes on Twitter. View all articles by .

{ 12 comments… read them below or add one }

avatar Transcendental Success

User of OS’s other than windows probably know how to compile things for themsevles :) I don’t think it’s that bad, they would have ways of installing.

GnuCash is terrible for a home user. I used it for a long time. It doesn’t give you much intelligence at all. There are (or were about 3 years ago) rudimentary reports but there is no easy way to understand much about your finances. Consider it a database and that’s about it.

Double entry book-keeping is awesome and I don’t know why the Quickens of the world don’t have it under the hood, but GnuCash forces you to know how to do double-entry accounting. It matters a lot when you set up your accounts. And if you set them up wrong at first and want to change later then it’s a huge hassle.

If all you need to do is balance your checkbook then use a spreadsheet to record your transactions.

In my opinion there are NO good personal finance packages out there.

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avatar David

As a user of GnuCash for the past 3 years, I would really recommend it. It does take some getting use to because it doesn’t hold your hand through everything you do. I believe it does have an initial setup wizard now to help you get started. Tracking your finances using double-entry is really the best way to go.

I’m not sure I understand your concern with balancing a checkbook. When you write a check, you record it in the checking account. If you choose to watch closely, you can mark them as cleared when they clear the bank or you can wait until your statement comes and do a full reconciliation. The status bar at the bottom of the window always shows your current balance and future balance (once everything outstanding clears).

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avatar asdf

Check out http://www.moneydance.com. Money Dance is probably the best one out there imho and worth the $20

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avatar Ken

Moneydance is $49.99 now.

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avatar Fred

Here’s a listing of open-source alternatives to Quicken and Money:

http://www.osalt.com/quicken

Of the four programs listed, GnuCash appears to be the most widely-downloaded, but since they’re all free, it doesn’t hurt to try them all to see which one fits your needs best.

Another thought: if you want to take your finances with you, there’s a portable version of GnuCash that’ll run off a USB stick:

http://portableapps.com/apps/office/gnucash_portable

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avatar Peter Jeziorek

I used GnuCash for a few months. It’s a nice program, though bit of a hassle to set up if you don’t have Windows, which has an automated installer. I stopped using GnuCash in the end because I ended up with more than ten prosper loans back then that were just too unwieldy — each loan requires a principle, fee, and interest to be accounted for. Hopefully, mint will start to track these automatically.

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avatar TyCarrerra

I’ve been running Gnucash for 5 months now (and for 3 years awhile back), and I love it. It was a pain to install on my Macbook Pro, but I think it was well worth it. Then again, I studied accounting in college, so I’m a double-entry geek.

For me, the best feature it has is support for multiple currencies. Comes in handy when traveling outside the US.

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avatar Bustedwheel

I took a quick run through of GnuCash, and think it is fine. I work in enterprise finance software, so I am familiar with double entry accounting. However, I don’t think that this is truly the best alternative for home users. I have tried them all (Mint, Yodlee, Money…) and the best one that I fond, both for features, and ease of use is Ace Money Lite. It’s also free. It gives everything that a normal person would possibly need, but doesn’t over-feature itself with useless stuff. The free version only lets you track one account at a time, but you can create as many as you want, and open them separately. The downside is you can;t report on multiple.
Check it out here. http://www.mechcad.net/products/acemoney/index_lite.shtml

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avatar Marv

Abassis Finance Manager works for me. It’s free and much easier to use than GnuCash.
Check it out at: http://www.abassis.com/

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avatar Evan

I haven’t used a lot of different accounting applications, and I’m not into self-promotion like a few people here. What I do know is, I took Principles of Accounting in college and I really wish I would have had this application in class. It would’ve saved me a ton of time and frustration.

Switching from using Excel to do accounting to this was like stepping out of the dark ages. I can easily apply everything I learned from class. This is a true double-entry book keeping system through and through. For the people who don’t understand the principles, I suggest you come up to speed because it is a great system to track accounts.

The only problem I had when I started was, expense accounts showed a credit instead of a debit when I entered a positive value for expense. After a quick once-over of the user manual I found a setting to change this to what I’m used to. This is probably defaulted to make it easier for people who didn’t learn double-entry in a formal setting.

The reason why Quicken still uses T account tracking (Yes they are using a formal accounting paradigm albeit, and antiquated one) because T accounts are the traditional way of doing things. There are still a lot of older accountants who learned the T-account system before they changed the standard.

I say, try it out and be sure to read this http://svn.gnucash.org/docs/guide/ while you’re getting started.

BTW, I’m running it off a SD card under Portable Apps and it works great.

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avatar Karen

I saw your post and have a question about using GnuCash. You said: T”he only problem I had when I started was, expense accounts showed a credit instead of a debit when I entered a positive value for expense. After a quick once-over of the user manual I found a setting to change this to what I’m used to. This is probably defaulted to make it easier for people who didn’t learn double-entry in a formal setting.”

When you enter a check amount, do you have to enter as -10.00 – that’s what I’m understanding from your post? Or, did you change it to read check amounts as a negative with the change in setting?
And, if I want to set up expense accts. for say gas, groceries, is this easy to do and can it be printed out by account??

Any help is appreciated. Thanks,
Karen

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avatar Marta

I wonder if anyone can help me. I hired an acct who has been using gnucash for my business. He has a PC and I have a Mac Book Pro. I cannot transfer files of his work onto my computer. Can someone please help me explain how to do this? Thank you. Best, Marta

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