Does a membership program pay for itself? – part 3

This is part 3 of “Does a Membership Plan Pay for Itself?” In this part, I look at some specific hledger transactions for tracking membership costs vs. benefits.

First, though, note that I claim only to be an “average Joe” hledger user. I am not an accountant nor a bookkeeper, nor have even trained to be one. Also, while I am a fan of hledger, I am not an expert user. Thus, my posts are about my experience using hledger, which is sometimes by trial and error. So, if you are an average Joe or Josephine hledger user who wants to see what someone else with a similar skill level is doing, you’ve come to the right place.

To start, let’s look at tracking membership in hledger. For my first approach, I decided to track membership rewards in a non-dollar account.

Why not track the savings in dollars? In short, it’s my understanding that I would treat savings as income, if I tracked savings in dollars. However, savings are not income. For example, I didn’t buy a Boeing 737 MAX 7 yesterday (not that I planned to!), so I saved $100,000,000. Sadly, though, this doesn’t mean that I had all those millions as income. Therefore, I think it’s better not to have savings be counted as dollars of income.

But if I don’t use dollars, what should I use? For membership program savings, I decided to create a new currency “M.” If I save $2.62, I record it as -M2.62. This way, the 2.62 doesn’t get mixed in with dollar income.

Note, though, that the membership program expense (not savings!) has an actual dollar cost, so I record that in real dollars, like this:

2025-04-03 ABC Membership
       expenses:membership       $5.00
       liabilities:credit card  -$5.00

Next, how to set up the “M” currency for the above? This is where I really felt pinched in terms of my lack of training in double entry accounting. But, better to forge ahead and if I make a mistake, it will be a) revealed to me in time and b) a learning opportunity.

Here’s what I came up with:

2025-04-03 ABC Membership
   expenses:ABC membership  -M5.00
   assets:ABC benefits       M5.00

I could probably combine the “M” line items with the previous dollar ones all into one transaction, but I am leaving them as two separate transactions for now.

I had previously tried the signs reversed in the “M” transaction, as normally expenses are not a negative number, but it seems to make sense with the above when I run reports, which I will show later.

Now, let’s add a transaction where we have some savings:

2025-04-03 ABC
   assets:ABC benefits  -M6.36
   assets:ABC savings    M6.36

If we run the command

hledger areg “ABC benefits”

we see the following output

Transactions in assets:ABC benefits and subaccounts:
2025-04-03 ABC Membership ex:ABC membership  M5.00   M5.00
2025-04-03 ABC as:ABC savings                M-6.36 M-1.36

The above seems to work, as my savings are a negative number, indicating it’s similar to income for me. However, this “income” doesn’t get mixed in with my dollar income, since it’s in the “M” currency. Because each dollar is equal to one “M,” I can quickly see from the above that I came out ahead this month by $1.36.

Next week, I plan to explain how I calculate a savings amount, as a bit of explanation, which I will leave for my next post.