Comme elle le dit si bien:

On a été super rassuré en janvier, le gaz n'allait augmenter « que » de 4%, tandis que GDF, super lésé dans l'affaire, réclamait 6,1%. Qu'à cela ne tienne, on n'a qu'à proposer une nouvelle augmentation en avril ! Bingo, accordé ! 5,5%. Deux augmentations, c'est mieux qu'une. Et en quatre mois, les factures ont donc pris 9,72%.

Ivy nous raconte ses déboires avec GDF, en particulier comment bénéficier des aides qu'on lui a accordées, mais que GDF refuse de lui verser.

Mais sûrement que GDF n'est pas une entreprise de service public.

There was recently a rich exchange of long emails on the MoneyWell mailing list on about how to deal with savings in MoneyWell. Thanks a lot to Blair Watkinson and Kevin Hoctor for participating in this enlightening discussion.

As three solutions seem to have emerged, all with their pros and cons, I'm going to detail them here. If you don't know what is MoneyWell, now may be a good time to skim the previous post I've written about it, or go watch some tutorial videos.

What are Savings?

In the following, I'll use the word "savings" for money that is put away for future unplanned expenses. The keyword here is "unplanned": if I'm putting away money to buy a new computer in 6 months, this is not savings. The reason planned expenses should be kept separate from savings and from each other is to make sure each one of them is accounted for.

I don't make any assumption about where savings are kept: they can (and often are) in a special savings account, they can be kept in a checking account, or they can be hidden in a fat envelope under the mattress!

What I mean by "tracking savings" is the capacity to tell at a glance how much is saved, and have a history of money saved or removed from savings.

Savings as Expenses to a Savings Account

The first approach to savings has a very big advantage: it's the one recommended by Kevin Hoctor, the author of MoneyWell! It's also very simple. It requires a savings account and a bucket for savings. It is also good to allocate some money to this bucket in the Spending Plan, to remember to save it away.

Let's assume you have allocated 200 € for your monthly savings. At the beginning of the month, when allocating your salary, you have 200 € available in the savings bucket. You then transfer this money to your savings account, assigning the transfer to the savings bucket. This result in "spending" the 200 € for savings, bringing back the bucket to 0 (there is no more money planned to save away).

If you have some money left in a bucket you want to save, the process is very similar. First you flow the money from the bucket to the savings buckets (the simplest way to do so is drag the bucket onto the savings bucket, then specify the amount to flow), and you then have more money to "spend" on savings, which you can transfer away as before.

If at some point you need to spend some saved money, for instance if your car breaks down unexpectedly, you should do the following. First, create a money flow from the savings bucket to the car bucket. This will result in more money available from you car, but with overspent money in savings. Then transfer the same amount from savings to your main account you will use to pay the expenses for the car, assigning the transfer to the savings bucket. This will bring it back to 0.

Figuring out how much money is currently saved in the weak aspect of this method. If the savings account is only used for saved money, then looking at its balance will tell you. However, if you have several savings account or keep money in them that is not saved, then it's trickier. I have found the following works (I'm using MoneyWell 1.3.1):

• select all your accounts (to make sure you capture every transaction involving savings);
• select the savings bucket;
• then select every transaction.

The status bar in the bottom of the window will tell you how much you "spent" on savings, thus how much you saved. However it will only track transactions that are in MoneyWell, so I don't know right now how to include the money saved away when one starts using MoneyWell.

Note that the graph displayed shows how much you saved each month and does not show the accumulation of saved money.

Pros Simple to use, recommended by the author of MoneyWell, works well with a single savings account holding only saved money.

Cons No gratifying graph showing money accumulating (to be honest, no approach has it...). When saved money is mixed with money assigned to other uses, it may be difficult to know how much was saved away. I don't know how to integrate the initial balance of savings accounts in this approach.

Savings as Money Flows

The second approach tries to follow very closely the inspiration of MoneyWell: the envelope system. The idea here is that saved money is sitting in a big fat envelope, hidden under the mattress, and each month we add a little more to the savings envelope, just as we put money in the rent envelope or in the groceries envelope.

With this approach, envelopes are of course buckets, and one accumulates savings in the savings bucket. The way it works is as follows.

As in the previous approach, one has a savings bucket and probably some allocation to it in the Spending Plan. When income arrives, it is allocated, and some of it ends up in the savings bucket. The main difference with before is that it now stays there. If we transfer the money to a savings account, we do so without assigning any bucket to the transfer: we don't care where this money is, we have completely decoupled savings from any account.

If we have some extra money in a bucket, be it the income bucket or the dining out bucket, which we don't want to spend, we can save it easily by doing a money flow. Independently, we can optimize where the money is, transferring extra money sitting in a checking account into a savings account that generates interests. This money may be saved, or it may be accumulated for a future planned transaction. The point here is that where the money is and what it will be used for are considered two different things.

When saved money needs to be spent, flow it from the savings bucket to the appropriate one. As before, you may do an actual (unassigned) transfer, but it may not be necessary.

To know how much money is saved, just look at the bucket. And to see the history of saving money, select the savings bucket and look at the money flows.

As concerns initial balances of saving accounts, one assigns them to an income bucket, and flows the amount corresponding to actual savings to the savings buckets. The rest may remain in the income bucket for future flows and allocations.

There is one big drawback to this approach, however, is that currently money flows are not included in the graphs (only transactions are). Thus there is no graphical view of how much was saved each month.

Pros One glance view of how much is saved. Complete decoupling of saved money from where it actually is. Easy to set up.

Cons No graphs.

Combining the approaches: Savings as Transactions

The final approach tries to address the absence of graphs. It is a hack in a sense, but it may be a solution to those who want to see some graphical display of what money was put away.

The main idea here is that only transactions are graphed, but that the previous approach only uses money flow. Thus one should create a transaction for each savings money flow.

To do so, the simplest I found was to create a new bucket called "To Save". One allocates income to this bucket, and when there is some money in it, she transfers it to another account, assigning the outgoing part of the transfer to the To Save bucket, and the incoming part to the savings buckets. This actually results in a transaction that increases what is available in savings. (A side effect of this approach is that it entices the user to move the saved money out of the checking account, where it's not generating interests.)

The main drawback of this approach is that one has to have a transfer for every money flow, even if no money is actually moved. As MoneyWell allows transfers within the same account, this can actually be done, polluting a little one's account with extra transactions.

Setting up the initial balances is very simple if everything in the account is actually savings: assign the initial balance to the savings account. Otherwise you may split the initial balance into as many buckets you need, assigning them directly. (Hint: using split transactions for this is actually very useful...)

Pros One glance view of how much is saved. Complete decoupling of saved money from where it actually is. Some graphs.

Cons More complex to set up. Extra bucket. Some extra transactions.

One should not that in both latter approaches, the savings bucket is a bit special in the sense it should never go in the negative.

To conclude, I should say I'm actually using the second approach for my savings, as it fits really well the envelope perspective, and the first approach for investments (my PEA, for French readers), as I do not track them inside MoneyWell.

What would make the second approach much nicer would be an addition to the graphs, displaying how much money is available in the selected bucket at the beginning of each month, for instance using a thin red line. Thus one could see the accumulation of available savings. An even better addition would be some special "accumulation" buckets, with different graphs than usual buckets, and some constraints that they cannot be overspent. Well, this should fill up my Christmas Wish List for future versions of MoneyWell

Tonight is TED talks night. I first watched the new Gore talk, which was pretty good. My next talk is going to be Nicholas Negroponte's 1984 talk (well, the part of it that still available).

But in between I just watched Jill Bolte Taylor's talk. And this just floored me. It's ... well, it's just something you have to watch. The whole thing.

I was going through my old MarsEdit drafts, when I saw this one. I realized it was almost a post, so here it comes!

If you like computer archeology, you'll love this video from the early 90s of Steve Jobs demonstrating NextStep. What I find amazing is how much of OS X is already there, and it is also somehow sad that so little has changed. Where are virtual reality, visual programming by example, voice driven interfaces, jet packs, and flying cars! Is it the year 2000 yet?

Seriously, it seems that the only recent real improvement in the interface of computers is the iPhone. Multi-touch screen and position sensor are a great way forward. But it still feels like a very small step, after all this time.

I've recently switched finance manager software, and as it seems to be a hot topics these days I've decided to talk a little bit about it here.

I used to use Cha-Ching. I had been using it for a year when I realized it was not satisfying my needs. It was also then that I realized I was locking my data in it, as the only export solution it provides is through a very limited Comma Separated Values file containing only the transactions date, amount, and title. As there is much more data in Cha-Ching, mostly tags and notes, this was clearly not satisfactory.

When thinking about what I would expect from a good finance manager, I realized that there are actually three temporalities for finance management:

• looking at the past: archiving previous transactions, for instance for record purposes;
• looking at the present: reconciling current transactions with the bank, and making sure the balances does not go in the red;
• looking at the future: planning ahead, both from month to month as well as planning big purchases.

I don't care much about the past: my bank provides me with PDFs of my statements that I can archive away, and that are text searchable. The only use of the past I find really interesting is in planning for the future, by showing me how I used to spend money. Knowing about the present state of my accounts is useful, and was the main reason I used a finance manager. But what I actually really want is to plan ahead, to know how much money is left after the rent, utilities, and groceries are paid. So that I can go on boardgame or book buying spree knowing it won't kill my finances for several months.

But I guess that Bret Victor, in this wonderful article I've mentioned previously, says it much better than I do:

Consider personal finance software. Entering and classifying my expenses is, again, tedious and unnecessary manipulation--my credit card already tracks these details. I use the software to understand my financial situation and my spending habits. How much of my paycheck goes to rent? How much to Burrito Shack? If I give up extra guacamole on my daily burrito, will I be able to buy a new laptop? What is my pattern of Christmas spending, and will I have to cut back if I don't take any jobs for a month? If I buy a hybrid car, how much will I save on gas? I want to ask and answer questions, compare my options, and let it guide my spending decisions.

This is why I've started using MoneyWell. This article is not a review of MoneyWell, it has no screenshot, nor it is a tutorial. There is already a lot of information on MoneyWell's site, including several nicely done tutorial screencasts. What I want to highlight here is where MoneyWell shines and works well with me.

The first thing you should do when you start using it is sit away from the computer, and think. So you can also do this at home, even if don't own a Mac! Just take a sheet of paper, and start listing all the different categories where you spend money. There are many of them, such as rent, utilities, health, music, groceries, transportation... I found useful then to get back to my computer and look at some bank statements, to see if I was not forgetting anything.

Then, inside MoneyWell, I created corresponding Buckets. Each bucket corresponds to a spending category, and each time you spend money you associate the transaction to the bucket, but we'll come back to this later. (It's all right if your list of buckets is not perfect, one can always add or remove buckets at any point.) I also created an income bucket, Salaries, for the money coming in.

I then moved to the second step: the Spending Plan. The idea there is that you enter how much money comes in each month, and how much you want to allocate for every bucket. This is where having previous data is very useful, to estimate how much one spends on groceries or utilities every month, for instance. But even a first rough estimation would be useful, to be refined in later months (MoneyWell can actually tell you what you spent on average, looking at the previous months). The goal here is to have a balanced plan, where you don't plan to spend more than you earn.

Then the last step happens when the money comes in, for instance when your salary is paid. You enter this incoming transaction, allocate it to an income bucket, and then you hit the Allocate Income button. This takes the money from the income buckets and distribute it in the expense buckets according to the spending plan. If there is too much money, the leftover is left in the income buckets for future allocations. If there is not enough, then some spending buckets do not get their full allocation. (You can specify some priority there, saying for instance you should first allocate money for rent, then only later for games...)

So you now have money to spend. Every expense is then assigned to a bucket, and you can always follow how much remains in a bucket for this month. If you did not spend the full allocation at the end of the month, then it is carried over to the next month, and if you spent too much, you'll have less to spend next month. And you can easily manually allocate money, moving it from one bucket to another, which is very useful since spending plans are never perfect plans.

So this was a very quick overview of what I find to be the most interesting feature of MoneyWell. What I really like about this approach is that MoneyWell isn't just a simple way to balance your accounts, which of course it can do, but that it also provides this alternate view of how you spend your money. It empowers you by letting first you plan then follow what you want to do with your hard-earned cash. And I find this invaluable.

Oh, and one final great thing: MoneyWell's support. Kevin Hoctor is amazingly responsive on MoneyWell's Google Group, or through private email. Nothing better than having the author of the software answer your questions in less than 24 hours!

Update (2008.05.10) There is now a video of a KeyNote presentation explaining the envelope-based concepts behind MoneyWell. I highly recommend watching it.

Following a link from I forgot where, I read this amazing article on MagicInk by Bret Victor. I really recommend that you read it too, maybe just to look at the pretty interface pictures. This article made me realize how important interface design may be, both for the pleasure of using the interface as for the clarity and amount of information it may convey. This also reminded me why I've loved using Macs for the last few years: for most software on this platform, it seems that a lot of thought and polish is given to the interface. It's usually very small things, but the whole point is that it's small things, and that the interface quickly goes away by becoming intuitive. (And I mean becoming intuitive even if it sounds contradictory.) As a related aside, I heartily recommend watching this amazing video by Edward Tufte on the iPhone interface.

As I wanted to see what other things Bret Victor might have written, I decided to visit his web site. And there ... waouh. I was floored. I just love his design. Because it's fresh, because it's fluid. Because it's dynamic and it pulls you in. And because I lost too much time diving into it.

And going back to the initial article, to check a couple things, I noticed this quote in the About the author Section:

I currently work at Apple, creating things I can't talk about.

Nice. Very nice. Can't wait to see what they are.

En France, on a la chance d'avoir un chef de l'état en couple mixte: il est français et marié à une étrangère.

On pourrait penser que cette situation aiderait gouvernement et législateur à prendre en compte les subtilités associées à ces cas, comme par exemple quand le conjoint français décède.

Malheureusement, ce n'est clairement pas le cas. Maître Eolas le raconte très bien. En attendant, j'ai juste honte de mon pays.

I thought it was working, but I realized it was not until I tested with my OpenID. So if you have one, don't hesitate to use it to comment. And if you want to simply associate it to your domain name, there are some simple instructions available.

I just did the upgrade of this blog to Movable Type 4.1. If you notice anything untidy, let me know.