Good way to record currency conversion transactions in personal accounting software?
"I found an answer by Peter Selinger, in two articles, Tutorial on multiple currency accounting (June 2005, Jan 2011) and the accompanying Multiple currency accounting in GnuCash (June 2005, Feb 2007). Selinger embraces the currency neutrality I'm after. His method uses ""[a]n account that is denominated as a difference of multiple currencies... known as a currency trading account."" Currency trading accounts show the gain or loss based on exchange rates at any moment.  Apparently GnuCash 2.3.9 added support for multi-currency accounting. I haven't tried this myself. This feature is not enabled by default, and must be turned on explicity. To do so, check ""Use Trading Accounts"" under File -> Properties -> Accounts. This must be done on a per-file basis. Thanks to Mike Alexander, who implemented this feature in 2007, and worked for over 3 years to convince the GnuCash developers to include it. Older versions of GnuCash, such as 1.8.11, apparently had a feature called ""Currency Trading Accounts"", but they behaved differently than Selinger's method." Here's what the GnuCash documentation, 10.5 Tracking Currency Investments (How-To) has to say about bookkeeping for currency exchanges. Essentially, treat all currency conversions in a similar way to investment transactions.  In addition to asset accounts to represent holdings in Currency A and Currency B, have an foreign exchange expenses account and a capital gains/losses account (for each currency, I would imagine).  Represent each foreign exchange purchase as a three-way split: source currency debit, foreign exchange fee debit, and  destination currency credit. Represent each foreign exchange sale as a five-way split: in addition to the receiving currency asset and the exchange fee expense, list the transaction profit in a capital gains account and have two splits against the asset account of the transaction being sold. My problems with this are: I don't know how the profit on a currency sale is calculated (since the amount need not be related to any counterpart currency purchase), and it seems asymmetrical.  I'd welcome an answer that clarifies what the GnuCash documentation is trying to say in section 10.5.
Why not open an USD account or subaccount in Czechia and then transfer the money using an UAE bank that supports transfers in USD. If you don't want to open an USD account in Czechia, it'll get converted when received there into the currency of your account but at their conversion rate which probably isn't good. Alternatively, use Transferwise which might or might not be cheaper. "One option might be to set up a separate bank account and a separate credit card account, which you would use only for your ebay transactions.  I have a friend who does a lot of selling on ebay, and this is exactly what she did.   It's reasonable to want to protect your personal finances from any complications that might arise with PayPal and/or ebay.  But since you definitely have to provide a bank account and c.c. number (there's no way around this), the best solution might be to set up separate ""ebay-only"" accounts.  And be sure not to link them to any of your personal accounts, for added protection. If you're planning to do a lot of selling, this is probably a good idea anyway just for record-keeping purposes. If you do a lot of selling on ebay, you might consider setting up a ""merchant account"". There are some limitations on international transactions (currently you can't sell to residents of UK, Australia, or France), and payment processing is a few days slower. But there seem to be fewer fees/risks/etc associated with a  merchant account. I don't know much more about it, but here's an article from an ebay seller, including pros and cons of PayPal vs. merchant accounts. http://www.ebay.com/gds/Selling-on-eBay-without-PayPal/10000000021351301/g.html" "The simple answer would be - if you want to take Euros from Germany to Spain as cash and deposit them, you're not breaking any laws, there is nothing to declare to customs (you're still in the EU), it is not ""income"" so there is nothing to tax, and your bank should be able to receive it without issue (no currency conversion after all). It does however come with the risk of loss/theft en route. So it really depends on how comfortable you are walking around with that much on your person. If you don't want to carry that much around and your banks are imposing unreasonable fees, here's something you could investigate further (I have not tested it myself): Transferwise offers a service that lets people send money to foreign accounts (in different currencies) for a small fee, at mid-market rates. However, they also offer a ""request money"" feature which allows EUR-EUR transfers (and some other same currency transfers). So perhaps you could use this feature to simply request money from yourself. The requester puts in how much they want to receive. Then they send a generated link to the other party. When clicked, that link sets up a transaction for the requested amount, and sometimes a nominal fee (I created a link for a GBP-GBP transfer and it wanted 1 pound extra, but when I did the same for EUR-EUR it didn't want any extra). I assume you would need two Transferwise accounts, though maybe not? And I'm not sure whether doing this is technically allowed in their terms of service, so you should read those to be sure. The advantage, if this works, is that neither bank sees it as a ""transfer"". Rather, the originating bank makes a payment to Transferwise, and then Transferwise makes a deposit to the receiving account. So I can't imagine either bank would be able to impose their foreign-bank-transfer fees for the transaction. https://transferwise.com/request-money I have used Transferwise for currency conversions, but not the request money feature, maybe other users could chime in if they have used it." Personal finances are not intuitive for everyone, and it can be a challenge to know what to do when you haven't been taught.  Congratulations on recognizing that you need to make a change. The first step that I would recommend is what you've already done: Assemble your bank statements so you can get an accurate picture of what money you currently have.  Keep organized folders so you can find your bank statements when you need them. In addition to the bank statements for your checking and savings accounts, you also need to assess any debt that you have.  Have you taken out any loans that need to be paid back?  Do you have any credit card debt?  Make a list of all your debts, and make sure that you have folders for these statements as well. Hopefully, you don't have any debts.  But if you are like most people, you owe money to someone, and you may even owe more money than you currently have in your bank accounts.  If you have debts, fixing this problem will be one of your goals. No matter what your debt is, you need to make sure that from now on, you don't spend more money than you take in as income.  To do this, you need to make a budget. A budget is a plan for spending your money.  To get started with a budget, make a list of all the income you will receive this month.  Add it up, and write that amount at the top of a page.  Next, you want to make a list of all the expenses you will have this month.  Some of these expenses are more or less fixed: rent, utility bills, etc.  Write those down first.  Some of the expenses you have more control over, such as food and entertainment.  Give yourself some money to spend on each of these.  You may also have some larger expenses that will happen in the future, such as a tuition or insurance payment.  Allocate some money to those, so that by the time that payment comes around, you will have saved enough to pay for those expenses. If you find that you don't have enough income to cover all of your expenses in a month, you need to either reduce your expenses somewhere or increase your income until your budget is at a point where you have money left over at the end of each month. After you've gotten to this point, the next step is figuring out what to do with that extra money left over.  This is where your goals come into play.  If you have debt, I recommend that one of your first goals is to eliminate that debt as fast as possible.  If you have no money saved, you should make one of your goals saving some money as an emergency fund.  See the question Oversimplify it for me: the correct order of investing for some ideas on what order you should place your goals. Doing the budget and tracking all of your spending on paper is possible, but many people find that using the right software to help you do this is much easier.  I have written before on choosing budgeting software.  All of the budgeting software packages I mentioned in that post are from the U.S., but many of them can successfully be used in Europe.  YNAB, the program I use, even has an unofficial German users community that you might find useful. One of the things that budgeting software will help you with is the process of reconciling your bank statements.  This is where you go through the bank statement each month and compare it to your own record of spending transactions in your budget.  If there are any transactions that appear in the statement that you don't have recorded, you need to figure out why.  Either it is an expense that you forgot to record, or it is a charge that you did not make.  Record it if it is legitimate, or dispute the expense if it is fraudulent. For more information, look around at some of the questions tagged budget.  I also recommend the book The Total Money Makeover by Dave Ramsey, which will provide more help in making a budget and getting out of debt. Depends on the exchange, and it's usually not going to be free. I use IB's API, and I've heard good things about IQFeed. You can get some free book data from Bats, but again you probably won't see your own transactions go by. http://batstrading.com/market_data/ "I can say that I got X dollars from an account like ""Income:Benefits""... but where do I credit that money to? ""Expenses:Groceries"" Yes doesn't feel right, since I never actually spent that money on food,  You did, didn't you? You got food. I'm guessing there's an established convention for this already?  Doubt it. Established conventions in accounting are for businesses, and more specifically - public companies. So you can find a GAAP, or IFRS guidelines on how to book benefits (hint: salary expense), but it is not something you may find useful in your own household accounting. Do what is most convenient for you. Since it is a double-booking system - you need to have an account on the other side. Expenses:Groceries doesn't feel right? Add Expenses:Groceries:Benefits or Expenses:Benefits or whatever. When you do your expense and cash-flow reports - you can exclude both the income and the expense benefits accounts if you track them separately, so that they don't affect your tracking of the ""real"" expenses." For double entry bookkeeping, personal or small business, GnuCash is very good. Exists for Mac Os. Sounds like you are reconciling more than once a month.  I like to say I glance at all my statements, but these days I just look at the final balance and call it good.  If a transaction shows up by mistake, I would find it in a couple of days because of how often I update my Quicken and Mint.com