I really appreciate you engaging in this conversation, as it must be
tempting to dismiss comments from people who are arguing about a
workflow you've obviously spent a lot of time thinking about.
Intra-day timing of transactions really should not impact an account
balance that dramatically on a day to day basis. I don't scour my
register by the hour or anything. Additionally, when the transactions
are downloaded, whatever is manually entered in the register and set
to "cleared" should be corrected in terms of the order. This is
exactly where iBank falls apart, because it cannot do this - partly
thanks to only having 2 reconciliation statuses ("Reconciled" and
"Unreconciled", rather than the additional "cleared"). However MS
Money does this correction.
In reality, all I want to see is how a big payment will affect my
balance, and if I need to move money from my savings, as my checking
account pays no interest.
So... lets say my checking balance today is $3,000 and I get paid on
the 14th and my Amex bill is on due on the 12th and a choose to pay
$2,500, I want to see the immediate effect in the register. I can see
that my effective running balance is $500 as at the 12th. If at any
time between now and then, my value balance for the 12th goes below
$0, I can transfer the difference from my savings on that day. However
that may never happen, it may depend on the size of my phone bill, or
Con Ed bill which cannot be predicted month in advance by a bucket.
Without missing interest opportunity on my savings, how would you
manage that situation using buckets.
Best
-Mark
On Feb 6, 2009, at 3:39 PM, Kevin Hoctor wrote:
>
> On Feb 6, 2009, at 1:45 PM, Mark Hall wrote:
>
>> OK, I understand the design there, but cannot agree that a running
>> balance relative to transactions is "not correct".
>>
>> A running balance is useful for posting future dated bills and
>> transactions and seeing immediately when the account balance might
>> need attention, especially if there are transfers between checking
>> accounts and credit cards that are future dated. Sure, you might
>> argue
>> this should be taken care of via the cash allocation and buckets, but
>> that's quite a workflow leap for someone coming from 10 years of MS
>> Money or Quicken.
>>
>> Perhaps I am old fashioned, but I work for an investment bank on the
>> balance sheet and risk side, and cannot imagine using a financial
>> tool
>> that will not tell you at a glance your real and value balance, at
>> any
>> point in time. It'd also make trouble shooting missing items a lot
>> easier, especially just after a import at the start of migrating to
>> Moneywell.
>>
>> Not sure if I am sounding inflexible here, perhaps my professional
>> background is interfering with my home finances, but I have never
>> been
>> overdrawn on my checking, mainly because I use this method.
>
>
> Hi Mark,
>
> The reason a running balance can be misleading is that transactions
> throughout a day at a financial institution can be in a different
> order than those in your personal register. The running balance will
> look very different if the order is not perfectly matched. What truly
> matters is the end of day balance based on the close of business for
> that institution.
>
> Here's another change in perspective: I'm trying to get people to stop
> staring at their bank registers to see if they have cash to spend.
> This is a trap that may not have tripped you up but for those of us
> who are less disciplined and less organized, it's a killer.
>
> With the envelope budgeting method, you are asked to allocate your
> income to buckets based on a spending plan and then only spend what
> you have in each bucket. This allows you to remain more disciplined
> because if your dining out bucket is empty, you can't go out to eat
> unless you decide to sacrifice another expense and have money in that
> bucket to move over to your dining bucket.
>
> This is not necessarily a financial tool that works for everyone. It
> is very much different than what many of us are used to but sometimes
> different is simply better.
>
> Peace,
>
> Kevin Hoctor
> [email protected]
> No Thirst Software LLC
> http://nothirst.com
> http://kevinhoctor.blogspot.com
>
>
> >
Mark Hall
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