Sunday, January 25, 2009

Moneywell impressions, part 2 - square pegs and round holes

Continuing with my posts on Moneywell...

One of the complications I have with my envelope system is based on the fact that I get bi-weekly paychecks.  (There was an effort a few years ago to move to paychecks on the 1st and 15th of every month, but the union membership shot it down. It seems obvious to me that nobody in the union budgeted their money -- twice-monthly paychecks work sooooo much better).

This bi-weekly paycheck thing complicates my budgeting. Moneywell has a very nifty little spending plan setup to help automate the allocation of salary into buckets, but it doesn't work well for us bi-weekly check folks working in a monthly billing universe.  A small example will demonstrate this:

Let's say you've got a bill that runs $100/month.  Over a year, you're spending $1200.  Us bi-weekly payday folks get 26 paychecks a year.  In theory, I should be setting aside $1200/26 = $46.15 per paycheck to pay this bill. (That is, in fact, what Moneywell will say).

But here's where theory comes crashing into reality.  Let's say I get paid on January 6th and 20th, and the bill's due on January 27th. If I put away my $46.15 after Jan 6 and 20, I only have $92.30 set aside for my $100 bill -- I'm $7.70 short when the bill comes due.  Sure, it'll all work out eventually, but here in the short term I'm hosed.

Moneywell impressions, part 1 - buckets are not categories

As I mentioned a few weeks ago, I gave Moneywell a whirl.  Overall, I don't think Moneywell is going to work well for me, but your mileage may vary.

Moneywell supports the envelope theory of budget management. In Moneywell, every time you get some cash in, it turns into an inflow, which you can then allocate to different areas. Traditional envelope theory has you cashing your paycheck and getting paper envelopes; Moneywell uses the idea of buckets.

I guess my big problem with Moneywell's bucket implementation is the difference between buckets and categories.  Take, for example, my insurance bill. I've got life, auto, and home insurance with the same company.  The bill is monthly and fairly regular (maybe adjusting once every six months as a new auto premium is calculated), and there's just one bill that combines all three. From a bucket-budget planning standpoint, I just want to have one bucket -- "insurance" -- that money moves into and comes out from.

But, every once in a while, I want to be able to look back and get more granularity.  If I was shopping around for a different auto insurer, I might want to look back and see how much I had been spending on auto insurance. 

There's the rub with Moneywell -- if you want granularity, you need more buckets -- one per grain, so to speak.  But...the more buckets you've got, the more complicated every payday gets, and most of the time, you don't need that much detail.

Monday, January 12, 2009


Any real alternative to Quicken has to support individual budgets for individual months. For example, my power bill ebbs and flows with the season. Likewise the water bill - no need to water during winter in the Pacific Northwest. Property taxes are due once a year - sure, I save up all year long, but I only pay it out in November. In the words of Dave Ramsey, we're not working with "the perfect budget from heaven," but rather where is this month's money really going?

So far, the programs that I've looked at both start with 'i' - iBank (downloaded) and iCash (just looked at manual). And, both of them assume monthly budget amounts - i.e., the same for all months of the year. That makes them both non-starters. Boo!

And I found a blog post that says the iBank has very limited online data downloading. Again, boo.

Friday, January 2, 2009

iBank has a cool domain name

Google just served up an ad for iBank using this domain name - Cool.

I too am looking to evaluate an alternative to Quicken. Totally unrelated to this domain name, however, I think while Tom's checking out MoneyWell, I'll check out iBank. More news when it happens...