It's been rumoured that Bryan Larsen said:
>
> This all works pretty sweet. One thing I'm looking forward to seeing is a
> DAILY graph of the budget balance that doesn't swing wildly as large expected
> expenses hit.
Well, at least part of the debate of 'velocity' vs. 'discrete events'
seems to be about getting that smooth graph.
Technically, I think the 'discrete events' aproach is the correct,
standard, accredited way of doing things. But that does not mean
that there's no way of smoothing things out, espcially when the large
bumps are due to expected expenses.
What comes to mind is the black & sholes equation, although that's
a bit of an overkill. As originally applied, it predicts option
prices based on stock price, due date & volatility.
In some way, we can do the same: if we know that we've budgetd
$600 every month for e.g. rent, then, if you want to have a smooth
graph, it makes sense to 'depreciate' it daily, so that your
expenditures graph doesn't have a stairstep in it ever month, and so
that your budget graph doesn't have a $600 up spike on rent due date,
and an equal down-spike a few days later when youn actually pay the
rent. On average, the budget graph should really look pretty flat,
if you've budgeted correctly. Don't let the big noisy spikes fool you.
--linas
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