As promised from last week, I want to show how I calculate the savings from a membership program. For example, the following transaction shows a savings of M6.36, but how did I come up with the M6.36 as the savings amount?
2025-04-03 ABC assets:ABC benefits -M6.36 assets:ABC savings M6.36
Here are the figures I used to calculate the savings:
membership cost = $5.00
cost of goods at membership store = $10.29
membership benefit at membership store = -$10.00
Total of above = $5.29
cost of same goods at competitor store = $6.65
$6.65 (cost from competitor store) – $5.29 (cost at membership store) = $1.36 (savings)
If the savings are $1.36, why is there the M6.36 in the transaction?
I need to explain this the best that I can in non-accountant speak, as sadly that is a language that is all Greek to me.
Here goes: I calculate the benefits as $5.00, since I paid $5.00 this month for the membership and received a $10.00 benefit, which I used. $10 benefit minus $5 cost equals $5 of benefit after subtracting the actual cost.
Finally, I add in the $1.36 of calculated savings to the $5.00, and I get $6.36, which I record as M6.36. I don’t record it in dollars because for my purposes I don’t want to have savings recorded as actual dollar income. Instead, I use the “M” currency, which measures membership costs and savings. One “M” corresponds to one dollar, so it’s easy to translate an amount of savings into dollars.
The above is a lot of calculation, and it’s a good reminder that I am not recommending that anyone do all this themselves. For me, the benefit is to learn more about hledger and to share some ideas and conclusions that may be useful others.
Next week, I will see if there is a way to let hledger do some or all the necessary calculations.