Income Allocation Question (Redux)
Jay
A while ago, I asked:
> I think I'm still missing something, though. When allocating income,
> how is the Allocated column calculated? It doesn't seem to be simply
> the current amount in the bucket. Is it affected when I move money
> between buckets?
>
> For example (not using exact figures), I have my mortgage set to All
> Month timing. Say it's $1000. I contributed $500 on the 7th and
> another $500 on the 22nd, so today I have $1000 in the bucket. But if
> I go to the Allocate Income dialog, the Allocated column shows $950.
> How could that be?
I have a clearer example... I have a bucket for monthly parking
expenses. Generally, I allocate $175 a month and write a check that
drains that bucket.
One month, I had an extra parking-related expense for $100. I
assigned that transaction to the Parking bucket (which left the
balance at -$100). It was a work-related expense, so I got reimbursed
as part of my pay during the next month. I manually moved $100 from
my Salary bucket to the Parking bucket to zero out that expense.
Then, when I went to allocate my income, MoneyWell calculated that it
only needed to put $75 into the Parking bucket.
My question is: Did I use this software incorrectly? I expected MW to
allocate $175 for Parking since the bucket was at $0 and not include
that other transfer.
Thanks for clearing this up.
Jay
Kevin Hoctor
> I have a clearer example... I have a bucket for monthly parking
> expenses. Generally, I allocate $175 a month and write a check that
> drains that bucket.
>
> One month, I had an extra parking-related expense for $100. I
> assigned that transaction to the Parking bucket (which left the
> balance at -$100). It was a work-related expense, so I got reimbursed
> as part of my pay during the next month. I manually moved $100 from
> my Salary bucket to the Parking bucket to zero out that expense.
> Then, when I went to allocate my income, MoneyWell calculated that it
> only needed to put $75 into the Parking bucket.
>
> My question is: Did I use this software incorrectly? I expected MW to
> allocate $175 for Parking since the bucket was at $0 and not include
> that other transfer.
>
> Thanks for clearing this up.
Hi Jay,
You did it all correctly but MoneyWell doesn't see the difference
between a manual money flow and a money flow created via the Allocate
Income panel right now so it only added $75. A future version will be
more intelligent about this process. Thanks.
Peace,
Kevin Hoctor
ke...@nothirst.com
No Thirst Software LLC
http://nothirst.com
http://kevinhoctor.blogspot.com
The Watkinson Family
Is there a way then to do manual money flows without throwing out the
allocate income feature? Has the behavior always been like this? I
hadn't noticed it before, but since I'm taking a more proactive
approach to our money (budget changes each month based on
circumstances, etc), I think that it will be much more common for
things to be changing. If a manual money flow overrides or
contributes to the Allocate Income amount, I think that doing manual
money flows is probably all I be doing.
When the allocate income panel pops up, it shows a bunch of values
that will be added to the buckets... are these the real values that
will be added to the buckets, or are the going to be adjusted by other
money flows that have been added during the month? How do I know what
is "really" going to be added when I allocate income?
Thanks for your time!
Blair
Kevin Hoctor
> Is there a way then to do manual money flows without throwing out the
> allocate income feature? Has the behavior always been like this? I
> hadn't noticed it before, but since I'm taking a more proactive
> approach to our money (budget changes each month based on
> circumstances, etc), I think that it will be much more common for
> things to be changing. If a manual money flow overrides or
> contributes to the Allocate Income amount, I think that doing manual
> money flows is probably all I be doing.
>
Hi Blair,
This behavior hasn't changed in MoneyWell and manual money flows won't
affect the Allocate Income process unless you do one prior to the
allocation. The reason most people haven't noticed this is that the
two actions are supposed to work together. You can either create money
flows the automated way (Allocate Income) or the manual way (drag and
drop buckets).
> When the allocate income panel pops up, it shows a bunch of values
> that will be added to the buckets... are these the real values that
> will be added to the buckets, or are the going to be adjusted by other
> money flows that have been added during the month? How do I know what
> is "really" going to be added when I allocate income?
>
> Thanks for your time!
When you allocate income, it's just filling the bucket with money. If
you want to add more to a bucket, you can even do it on that panel by
changing the New Flow column value. All the money flows are real
values and you can always see if you filled to the planned amount or
over for the month by reviewing the graph. The Allocate Income panel
shows money flows that exist in the bucket and the new flows next to
that so you can also see what you are putting into the bucket at that
time and adjust it.
Patricia Cross
On Apr 2, 2009, at 10:34 PM, Kevin Hoctor wrote:
> This behavior hasn't changed in MoneyWell and manual money flows won't
> affect the Allocate Income process unless you do one prior to the
> allocation. The reason most people haven't noticed this is that the
> two actions are supposed to work together. You can either create money
> flows the automated way (Allocate Income) or the manual way (drag and
> drop buckets).
I guess I'm not normal because I noticed it nearly immediately. I
always have to adjust nearly every figure in the Allocate Income
window because it counts all the manual money flows. The fact that I
overspent my dining bucket in the first half of the month and had to
steal from the entertainment bucket to cover it does not mean that I
want to get even less money put in my dining bucket for the second
half of the month. Nor do I want excess money placed in the
entertainment bucket to make up for the money I moved over to the
dining bucket. Am I just weird, or not understanding envelope
budgeting properly?
-Trish
Terry Norton
I guess I'm not normal because I noticed it nearly immediately. I
always have to adjust nearly every figure in the Allocate Income
window because it counts all the manual money flows. The fact that I
overspent my dining bucket in the first half of the month and had to
steal from the entertainment bucket to cover it does not mean that I
want to get even less money put in my dining bucket for the second
half of the month. Nor do I want excess money placed in the
entertainment bucket to make up for the money I moved over to the
dining bucket. Am I just weird, or not understanding envelope
budgeting properly?
goo...@lancegeiger.com
worked quite how I would expect or how I would want so I end up doing
all my distributions manually.
The problem here, in my opinion, is that there is no automated
changing of the "Spending Plan" amounts. Using Trish's example, if I
dine out more often this month and move funds from the Entertainment
bucket, I would have to manually reduce the Spending Plan amount for
Entertainment (and increase it for Dining Out), otherwise when I get
my next paycheck and use Allocate Income, it's going to try to replace
all that money that I "transfered" to the Dining out bucket.
For this to work, you really need to tediously manage the Spending
Plan amounts for every bucket which becomes a chore. It seems like
MoneyWell could do something here to better automate this, but perhaps
other people use Spending Plan amounts in a different way and like the
way it works.
-Lance
Daniel Shanahan
Daniel Shanahan
Oakland, CA 94610
Druzyne
> changing of the "Spending Plan" amounts.
>
> Plan amounts for every bucket which becomes a chore. It seems like
> MoneyWell could do something here to better automate this, but perhaps
> other people use Spending Plan amounts in a different way and like the
> way it works.
should be a deliberate choice on your part, and not an automatic
process you might not notice or forget about, because you are defining
your goals. This tool is about trying to change your spending habits,
and spending how you decide you want to, rather than accommodating
your current practices. It's a plan that you should try to stick to
each month, but there are manual flows you can fall back on for
fluctuations.
I find this much more convenient for flowing money than manually
flowing everything, but I can see how this would present difficulties
for unpredictable income. I believe such a situation might have been
the thinking behind priority levels on the buckets, so that if you
don't have enough to fill all the buckets, at least important ones
like food, shelter and transportation will be filled.
Lance
> should be a deliberate choice on your part, and not an automatic
> process you might not notice or forget about, because you are defining
> your goals.
we will need in every bucket, thus we would be forced to continually
tweak our spending plan amounts if we want the Allocate Income feature
to be of any use for allocating income to where we actually need it
now (and not where we thought it would need it a few weeks ago).
Maybe the solution is to create another window similar to Allocate
Income but for "Bucket Transfers" that would allow you to easily see
which buckets have a shortfall and identify buckets with a surplus
that you could transfer from and it could also adjust the spending
plan amounts for you. This would make it obvious what was happening
and it wouldn't confuse anyone who currently does bucket transfers
manually and expects the spending plan amounts to remain static.
-Lance
Kevin Hoctor
Trish,
You're as normal as the rest of us. The Allocate Income panel is just
meant to be a shortcut and speed up the process of creating money
flows. If you've had to make several manual adjustments, then the
allocation process will not work as well. The goal is to find planned
levels for as many buckets as you can that don't need extreme
adjustments and then manage the rest manually.
MoneyWell is also being improved to handle this with more intelligence
and you should see some of these improvements starting with 1.5.
Kevin Hoctor
> I agree with Trish in that the Allocate Income feature has never
> worked quite how I would expect or how I would want so I end up doing
> all my distributions manually.
>
> The problem here, in my opinion, is that there is no automated
> changing of the "Spending Plan" amounts. Using Trish's example, if I
> dine out more often this month and move funds from the Entertainment
> bucket, I would have to manually reduce the Spending Plan amount for
> Entertainment (and increase it for Dining Out), otherwise when I get
> my next paycheck and use Allocate Income, it's going to try to replace
> all that money that I "transfered" to the Dining out bucket.
>
Lance,
The goal is to avoid shifting from your planned amounts and to try to
spend less than you have in a bucket but if you do need to take from
another, then you'll have to handle this manually.
> For this to work, you really need to tediously manage the Spending
> Plan amounts for every bucket which becomes a chore. It seems like
> MoneyWell could do something here to better automate this, but perhaps
> other people use Spending Plan amounts in a different way and like the
> way it works.
I think the answer is to add more intelligence and that's coming but
it will be more about who allocated the money instead of changing your
spending plan. You don't want MoneyWell automatically adjusting your
plan or why even have one. It would just be a free-for-all.
Instead, MoneyWell will note when a money flow is created via Allocate
Income and give you the option to flag manually created money flows as
"allocations" or just taking money from another bucket. This should
cover most problems people are having right now.
Kevin Hoctor
I've had difficulty with the allocation process too, mostly because my monthly income is unpredictable. I ended up allocating manual, as have others.
Kevin Hoctor
> You have a point, but most of us cannot predict exactly how much money
> we will need in every bucket, thus we would be forced to continually
> tweak our spending plan amounts if we want the Allocate Income feature
> to be of any use for allocating income to where we actually need it
> now (and not where we thought it would need it a few weeks ago).
Lance,
It's not about predicting exact amounts but limiting your spending and
improving habits. Spending plans do change though and you'll have ways
to manage those fluctuations better soon.
Patricia Cross
On Apr 3, 2009, at 1:42 PM, Terry Norton wrote:
> Now, as bill come due, take the money from that envelope and pay the
> bill. This system is supposed to stop you from over spending for
> each expense you have. Once the money is gone from the Dining
> envelope, you can't spend anymore on dining, for the simple reason
> there's no money in the envelope to spend.
>
> You also happen to have an Entertainment envelope. What you are
> doing is making a decision that you would rather eat out more than
> entertain yourself. So you take money from the Entertainment
> envelope and put it in the Dining envelope. Obviously, you are now
> going to spend less on entertainment for the month.
>
> If you do this every month, then you might as well allocate more to
> dining than entertainment each month instead of having to steal from
> the Entertainment envelope. Now if you truly don't want to
> overspend on dining, then when the envelope is empty, don't go
> dining until it gets filled again.
I think we're looking at this scenario from opposite directions. Say
it's March 31st. I have $50 left in my Entertainment bucket and $0
left in my dining bucket. I decide "hey, let's go out to dinner
tonight!" and we do. So when I sit down and do the receipts on April
2nd, I assign the credit charge to the Dining bucket, because it's a
dining expense. I pay for it by transferring the $50 I didn't spend
in March on entertainment into the dining bucket instead.
That transfer shouldn't affect my allocations for the month of April.
The fact that I decided to spend leftover entertainment money on
dining shouldn't mean that now I don't need to allocate the full
amount for dining for April, nor that I "screwed up" by overspending
in the dining area. If anything, it means that I actually looked at
my money *before* I spent it, which admittedly is new to me.
Kevin said that Moneywell simply can't tell the difference between a
money flow generated by Allocate Income and a manual one, so I'm
assuming that's why I get all screwed up at the end of every month
when I look at my leftovers and decide to spend them in different
areas then originally budgeted. It's not a crisis or anything I can't
live with, but I'm looking forward to having Moneywell not mess up my
planned allocation just because I did a little rearranging at the end
of the month.
-Trish
Terry Norton
I think we're looking at this scenario from opposite directions. Say
it's March 31st. I have $50 left in my Entertainment bucket and $0
left in my dining bucket. I decide "hey, let's go out to dinner
tonight!" and we do. So when I sit down and do the receipts on April
2nd, I assign the credit charge to the Dining bucket, because it's a
dining expense. I pay for it by transferring the $50 I didn't spend
in March on entertainment into the dining bucket instead.
Patricia Cross
On Apr 4, 2009, at 12:25 AM, Terry Norton wrote:
> In this example you're simply not using the correct MoneyFlow date.
> Go to dinner on 3-31, that's fine. Then on 4-2 enter the
> transaction date as 3-31 because that's when you went to dinner.
> Seems the fly in your soup is when you also do the MoneyFlow, it
> will have a 4-2 date, but that's not really correct because you
> really used the money on 3-31, not 4-2.
>
> Here's what should be done: when you enter the info on Apr 2, enter
> the actual date you dined out, 3-31, and when you do the manual
> MoneyFlow to the Dining bucket, change the MoneyFlow date to 3-31 as
> well. Now when you do your April allocations, the Dining bucket
> gets it full amount.
>
Aha! I knew there had to be something I was missing.
-Trish