Part 4 of membership programs

General
1

Part 4 looks at how to calculate membership program savings in hledger or similar tool. Read about it at: https://hledgerfan.com/does-a-membership-program-pay-for-itself-part-4/

2

I find the experiment interesting. I recommend that you put the calculation you explained in your post directly into your records, so that you don't have to remember how you did it.

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.

2025-04-03 ABC
  assets:ABC benefits   -M5.00    ; realized benefit by using the membership to make a purchase in April 2025, abc_benefit_realized: "2025-04"
  assets:ABC benefits   -M6.65    ; cost avoided by not buying goods elsewhere
  assets:ABC benefits   M5.29    ; actual cost of goods at membership store
  assets:ABC savings

I added a tag called "abc_benefit_realized", so that you can easily extract the list of months in which you actually took advantage of using the ABC Benefit. Alternatively, you could use subaccounts for "Realized Benefit" and "Purchase Savings".

2025-04-03 ABC
  assets:ABC benefits:Realized Benefit   -M5.00    ; realized benefit by using the membership to make a purchase in April 2025
  assets:ABC benefits:Purchase Savings   -M6.65    ; cost avoided by not buying goods elsewhere
  assets:ABC benefits:Purchase Savings   M5.29    ; actual cost of goods at membership store
  assets:ABC savings

What do you think?

Why calculate when hledger can calculate for you? :wink:

1 Like
3

Yes, I definitely like the idea of hledger doing the calculations. One advantage of the approach you showed is that it shows more of how the savings were calculated. Recording this kind of information fits very well with the larger idea of good accounting. That is, it works towards clarity.

Thanks for your input!

1 Like