New Category Type: Savings

[Obelix]

#3350

OK, here’s another thought I had responding to a different post.  We have category types for income and expenses.  Why not have one more type that is essentially savings/long term allocation.  My income is salary based with bonuses.  We keep a running tally of things we want to spend on that we can’t afford on just my salary.  When the bonuses come in, we allocate them to certain areas.  Piano lessons for the kids, allowances, paying off the car insurance for a year, and so on for all the usual expenses of life.  I keep track of all this in excel.  I can do it this way, but it seems like CB would be a perfect place to keep these tallys since I’m already here handling cash flow.  This stuff is really slush-fund money that just sits in the checking/moneymarket account waiting to get spent when the time is right.  That means its already in CB anyways.  What I want is a way to track it.  If I’m saving for a new TV, I add a savings category for the TV and the amount I want to save.  Then as I decide I have the money to put towards it, I allocate some money into that savings category.  once I’v saved enough to “fill” the category, I can go buy the TV I wanted.  You could do the same thing with any purchase.  Prefunding for a purchase is always a wiser and cheaper way to buy something than paying all the interest tied to a creditcard/loan purchase.  Once a savings category was used/finished, just delete it.  I’v got ideas on how to make all this work together with the current category types.  It would have to be a whole long term budget structure, but it would be totally optional.  Plus it would fit so well with what CB is designed to do:  Help people track their cashflow and savings.  It might be some work, but encouraging people to save for things instead of buying on credit/loan would be a great extra for CB.

[Eric Poulin]

#3656

We hope to get to that point in the not too distant future.  Part of what we’ve been discussing is setting savings goals on categories – which makes more sense in an account designated as a “savings” account.

I’m interested in hearing your ideas on this topic.  We’ve only had early discussion on this topic over the past half-year so we’re still very much in the early planning stages of this particular topic.

[Obelix]

#3657

OK this is a work in progress and may span several posts as I iron out my thoughts.  This will also be planned under the assumption that you can code anything I ask for.  You can, right?

Terminology first:
*Category is fairly loose and I get it confused with category types.  From now on, I will refer to a category as a user defined subaccount.  Examples would be Income, Insurance, Mortgage, Car payment,etc.  These are the daily “units” users work with when defining what’s happening with their money. 
*Category Type is more of a structure applied to categories that defines the way they operate.  Currently there you have Income and Expenses.  CB uses those designations to just place them under the proper Category Heading as far as I can tell.  They work identically behind the scenes.  They count up or count down for the current month.  I would change that slightly to have Monthly and Continuous category types.  Monthly types work just as they do now.  Continuous types would work just like the daily value does.  It moves from month to month, holding it’s value.
*Category Group is simply a heading under which the different categories would fall.  Currently you have Income and Expenses.  I would like to see those become user definable and expandable/contractible in the sidebar.

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EDIT: removed a bit of stuff here about savings that is not as good as the current “Goals” based discussion below
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[Eric Poulin]

#3658

For now, assume I am a coding genius and can do anything.  The only limitations should be user experience and doing the right thing.

[Robin]

#3659

In response to deleting the category when you’ve completed saving for the “new TV” and purchased it.
I feel that it shouldn’t be deleted because later on it would throw your category calculations off for past entries as you look back to see any spending trends you’ve had.  I believe the best way would be to have the category hidden after a certain date, possibly even between dates if you want to reuse a category instead of recreating it.

[Eric Poulin]

#3660

I agree that categories should be more permanent-type structures.
We may want to create a new structure called “goals” or something similar to represent a temporary container to hold “saving for a new TV”.  Once the “goal” is reached, it will disappear in the future, but still be part of your budget as you review the past.

[Obelix]

#3661

Hmm I like the “Goal” designation instead of savings.  Also, that makes it a free form entry that doesn’t have to be tied to the actual accounts.  I would like to see the goals have a decrementing option that lets you enter an amount you spent out of the goal amount.  The amount then gets adjusted for that decrement.  I guess if you wanted to take it a little farther you could keep up with the expenses charged against a goal and allow the user to print that out for a certain time frame.  That would work great for any goal that is a running goal.  I keep an “Auto Expenses” goal of $1000.  Now I have never reached that goal, but we allocate money to it as we get extra cash.  We also dip into it for oil changes and tires and such.  Being able to go back for a year and see the auto expenses laid out would be great.  Maybe as a thought a standard expense entry could have a drop list to apply it against a specific goal. 

Would you want to have a total tally for all the goals?  Perhaps in the same manner as income and expenses?

Dang, I’m going to have to go back to my “Savings” thread and rewrite it targeted at goals…

[Obelix]

#3662

Oh.  This is my savings thread.  Duh.

Ok, I stand by everything I said in the last post and disavow all knowledge of of the secondary portion of the original post.  I think having “Goals”  that are free form are much better than trying to tie every penny into some type of “Savings” structure.

Goals should have an easy way to add money to them.  This probably would work best as an entry type tied to the specific goal.  I don’t think that trying to deal with the original goal item entry would be very efficient unless you made it acessible from the category layout area.  Even that would force a change in the current method of operation.  Plus tying goals to specific events would probably fit in just fine with your current data structure.  it would just act as a positive income event does now, only it would relate to the goal only and not the daily amount.

Goals should have an easy way to decrement against them.  This would probably play into the current entry structure.  Just add a drop down list of Goals that the entry can be applied against defaulting to “none”.  Entries apply against the daily balance and against the Goal they have set(if any).

Some issue in my mind as to the best way to decrement a goal if the decrement isn’t a real expense.  Like if I wanted to move money from my “New TV” goal to my “New Clothing” goal because I decided I needed new boots soon for work.  The money didn’t go anywhere yet, but it moved.  Would that transaction require 1 entry?  Two?  Should it be easier than that by letting the user have free reign over the amount a goal contained through a straight text value field they could adjust like the current entry setup has?  A true free form goal would work that way.  Depends on how much structure you want to force the user into to gain the advantage of a money trail to come back to in the future.

You could have a second entry type that only played with goals.  This could be used to move money between two goals, or could be created instead of applying an expense entry to a goal.  This would happen where you had one expense entry but covering two or more goals.  like if I wrote a single check for both my new TV and my new shoes when I go to Sears.  Being able to split the expense will be a necessary function I think.  So having a second entry type that was specific to goals will be necessary.  I wouldn’t force a goal change entry on creating a regular, single goal expense tho.  That way going back and changing the value (or changing a future value that you now know the true value of) also changes the effect on the goal.  Splitting into multiple goal entries still would pose a challenge if there was a change that was applied to the true expense entry.  The user would have to deal with the double goal entries anyways by hand.  I think for now you will have to leave them hanging and make them change the goal entry values by hand to match the expense entry.  Maybe later you could add some type of link from the expense entry to the related goal entries, but that would force you do handle the multiple goal entries from the expense entry setup screen.

Man getting long again.  What do you think so far?

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