Account balances explained

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Account Balances Explained

My Money keeps track of a number of balances on any given account, on non-investment accounts these typically include:

  • Initial Account Balance- initial deposit or a transfer of funds to this account at the time of opening
  • Running balance- My Money calculates this to reflect all the transactions as they were applied against the account
  • Reconciled balance- value of all transactions manually reconciled against a electronic or paper statement
  • Bank reported balance- This value is normally reported to My Money by a bank during account synchronization
  • Bank reported available balance- Most banks will also report available funds at synchronization time.

This is how a typical balance panel looks like after synchronization with a bank:


This sample account was last reconciled on 06/18, the reconciled balance was brought up to $4,351.72, on July 10th this account was syncronized with a bank at which point bank reported $542.03 available funds. Currently running balance is standing at $1,813.62

Calculation of running balances

My Money has 2 modes of calculation of running balances, by date and by sort algorithms.

By default, My Money uses By Date calculation which is closely matching the bank balance calculation.

To illustrate this algorithm imagine that you made 5 transactions on a course of a week, you put in $1 into your account every single day and on Saturday you withdrew $3.


On 07/07(Monday) the account balance was $1, on 07/09 - Wednesday the balance was $3, on 07/12 - Saturday the balance is $6 and then after withdrawal it goes down to $3.

This calculation is fact based and reflects the net of all debits and credits for an account at the end of the week.

Why does my running balance appear to be incorrect?

Imagine you decided to resort your register and instead of sorting by an entry order or date, you chose to sort your transactions first by payee name in decreasing order, then withdrawals listen first for the same payee, then most recent transactions first, after all these sorting your register will look like the following:


Your running balance appears to be incorrect. However, if you look closely you will see that even though the transactions are resorted, the balances still reflect the same fact that on July 7th the account balance was $1, on July 10th the balance was $3 and after withdrawal on July 12th the balance goes down to $3 again.

This is how balances are recorded at a bank and by default My Money uses this method, even though it may introduce confusion at a running balances column

Recalculating balances based on the register sorting

If so desired, My Money can recalculate the balances based on the register sorting. To do so please select "Calculate running balance" - "Follow Register Sorting" option in the general preferences dialog


After saving the options and reloading of the account your register will look like following:


As you can see the balances do follow the sorting in this case, because the register is sorted by payee name in an ascending order the balances start with $1 on Jul 7th, then go down to negative $2 because there was withdrawal then on July 9th the balances are back to 0, etc.

As you can see these balances have nothing to do with reality, this is merely a convenience function My Money provides to help with "what-if" recalculation scenarios. To accurately reflect running balances as reported by the bank please either use By Date balance calculation option or always keep entries sorted by the date.

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