Budgeting suggestion - a different method

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Torakikiii
Posts: 77
Joined: 05 February 2011, 10:14

Budgeting suggestion - a different method

Post by Torakikiii » 11 July 2017, 20:49

Hello guys and hello Cyril.
I have a suggestion for enhancing a feature that could make iCompta the best budgeting software around for Mac.

First of all I’m a long time user, my data faile goes back to 2010 and I’ve been loving and buying this program for years. I want it to least, to grow and to keep morphing and incorporating new ideas.

So, in the last ten years I’ve been using my personal budgeting method to drive all my finances. I’m not saying I’ve invented something new, I’m saying that I’ve engineered and polished a method that helped me (and a few of friends of mine) getting through expenses. At the moment it’s inside an excel file.

I had the idea well before I discovered another great app, Ynab, that heavily sits on the idea of living a month in advance (with expenses) and it has great features for budgeting. It totally lacks in all the other departments in my opinion, user interface being the most annoying part. That's when I moved to iCompta. I love it, I can't do without but I feel it's perfect for tracking what I've spend but not what I'll have to spend.

hence, the excel file. (I'm not a coder, had to use what I could). So what is it all about?

My idea was not to live one month in advance as suggested by Ynab (it means you should save enough to have at least one month of expenses in your pocket before the month begins, so to be able to cope with any unexpected problem), but to plan the whole year. How do you plan one year in advance? Well you budget the desired and leave place for the unexpected.

I’m not gonna delve too deep into it but I decided that the minimum floor I need to have January first on my bank account is, in my case, 1200€. I then calculated (thanks to icompta for this!) my monthly median expenses, added a saving percentage, a monthly budget refill and voilà the receipt:

Salary - (monthly expenditures + savings quota + refill quota) + any unspent money = overflow (“free money”)

Salary = self explanatory, any kind of income

Monthly expenditures = how much I spend every month for mortgage, living, eating, bills, car and whatnot. This is a median I extracted from years of data but it can be greatly approximated easily.

Refill quota = 1/12 of the floor (remember? the starting amount January 1st of each year) to replenish the amount IF it gets spent during the year. Otherwise it will add to the “free money”.

Unspent money = Should you spend less this month in respect of the planned monthly budget for any reason, it will add to the “free money”.

That’s it. In my excel file I then fill up all the data, while most of it gets automatically calculated. The result is that you know that you’re covering all of your (expected) expenses, you’re saving a quota for the future, you’re preparing for the year to come and well you’re spending!
Do you want to go on a trip to Paris? Plan XXX Euros in that month. The total available will lower accordingly. New tires for car? plan it. New mac? plan it but know in advance when you should have enough cash. Car insurance, plan it. Whatever, plan it.

Schermata 2017-07-11 alle 20.20.50.png
Schermata 2017-07-11 alle 20.20.50.png (105.17 KiB) Viewed 220 times
Have a look. There are really only 4 parameters to enter:

1195 (green) that’s my monthly total expenses at the moment.
1200 (light blu) that’s my floor
300 (white) that’s how much I can/want to save monthly
Stipendi (blue) those cells hold your monthly salary amount. Everyone will have a different story here.

All the red cells/text are expenses, planned or not. I usually plan it then make it red when the expense occurred. Yes my total at the moment tells me I’m under of 207€ but I’ll save a little during the months to come. I had some big expenses this year :) I haven't explained every singe cell because it's not the the point of this message, but the important things are the 4 I listed above.

I understand that this is a very personal method but with my surprise I’ve seen other people (friends of mine) using it and I had the idea that it might be useful to others too.

Of course I’d love to see it implemented inside iCompta, even if in a different way. I strongly believe that planning and budgeting is very important nowadays that every Euro counts.

I actually go even deeper using another excel file to track/plan monthly expenses, but I'm a planning freak :). iCompta helps me with the expenses I’ve already done, not with those still to come and I don't like surprises!
This method is intended for balancing my life, not to plan for a new car or buying an house. That's a different story (that I track elsewhere) :) :)

Anyway I’d love to hear from others about it and I’d also love to know how other people budgets their expenses and plan their financial life.

Thanks for reading it all :)

Ivan

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Angeman
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Re: Budgeting suggestion - a different method

Post by Angeman » 11 July 2017, 22:07

Thanks for you greatly detailed suggestion. I read it carefully and it will surely influence me when I write next versions of iCompta.

Torakikiii
Posts: 77
Joined: 05 February 2011, 10:14

Re: Budgeting suggestion - a different method

Post by Torakikiii » 12 July 2017, 17:31

Cyril,
thanks and I hope in the future to see some kind of deeper planning added to iCompta.

I have another hopefully useful suggestion. You could consider adding modularity to iCompta, so you could keep the core as it is and let people add modules they are interested in separately, at a cost like an in-app purchase.

Things like budgeting... or a template maker for custom invoices, a dedicated securities management, mortgage extinction planner, a whole save button and calculator (kididng on this, thanks for adding it back :D )

Keep it going, it's already a great app.
Ivan

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