Eric Murano

So it’s been over 7 months since I posted on my blog.  I suppose there’s nothing wrong with that but I had intended to post regularly.  I definitely haven’t been “feeding the monster”, which is a blogging term that means you have to blog often to get a following.  I’m not really after a following; this is just a publicly available brain dump, really.

PayDay is on hold due to paid freelance work taking precedence over the unpaid passion project.  That’s ok, though.  The good thing about a passion project is you’re doing it for yourself and you’re not going to let down anyone if you need to shelve it for a while.

I was going to post about currencies in PayDay and I started writing the article but I think I’ve overcooked the idea of currencies.  Now I don’t think I even need currencies in PayDay.  It’s meant to be a personal budgeting tool that gives you a heads up about recurring bills.  Not many people have recurring bills that are from another country.

Another thing I was missing was the idea that the act of converting currency and how it is done is tied very much to the situation.  Why are you converting the currency?  If it’s to see how much that Think Geek t-shirt will cost in AUD then you’re going to have to take that conversion with a grain of salt.  That AUD figure is just not going to be what you are going to pay for that t-shirt once the transaction is done.  The obvious reason is that the exchange rate changes all the time.  That’s obvious.  Another reason is that the financial institution that make the purchase through will charge you their own rate for the conversion.  If you get your conversion rates from xe.com I guarantee that the rate will be different to the one that your bank will use when they send the money to Think Geek.  Let’s not forget that some banks will also charge a conversion fee.

Sometimes you just need an approximate representation of that foreign currency in your local currency.  You know it’s not accurate but that’s ok, you just need to know a ball park  figure.  Then currency conversion is more about statistics; “on average how much AUD will x USD cost?”

For currencies to make sense in PayDay I would have had to add the concept of ‘approximate value’ into the model.  I think that’s a valid concept to have but I wouldn’t bake it in until a few version later.  I think, also, I’d have to have the approximate value feature done before I could think about having multiple currencies in PayDay.  I’d make it so that approximate values were applicable not only to currency conversion but to bills that you know might change in value over time, like Brisbane City public transport costs (grr!).

Anyway once I finish my current freelance work I’ll get back into PayDay.  I bought a MacBook Pro a few months ago so I’ll have to get PayDay up and running on that.  I want to keep it as a .Net project so I might have to install Windows 7 on the Mac or wait for MonoMac.  Mac Zealots please don’t write in abusing me  If it’s all too hard to get a working .Net environment running on my Mac I might change the the project’s technology stack but I’d really like to have a mixture of technologies i.e. a .Net backend and website with an iOs app that talks to the backend.  We’ll see.

Note: I originally called the project ‘PayCycle’ but since this is the name of an existing commercial product from Australia.

In my last post I wrote about how I’m managing my finances by using some simple maths in Microsoft Excel.  As a way to learn C# and .Net I’ve started writing the logic of the spreadsheets into a simple desktop application.  I’ll also be extending the features of the application to help with forecasting how much non-fixed cost bills will cost in the future.  Things like car repairs and how much you spend on lunch at work.

I’m calling the software PayCycle since the central idea is your pay cycle and how your budgeting revolves around how much and how often you’re paid. Since finding out there is already a product out there called PayCycle I’ve decided to name the software ‘PayDay’.

I could keep using my Excel files to organise my budget if I didn’t have the urge to have a software project to tinker with in my spare time.  The project deals with money (which I’ve found is more involved than just using numeric data types), with time periods and frequencies (yearly, monthly etc) in what appears to be straight forward from the 10,000 foot view but ongoing work will reveal the devils in the detail.

The project will initially deliver a desktop application that uses WPF for the user interface, WiX for the installation project and NUnit for unit testing. I’ll be using both SharpDevelop and Visual C# Express as IDEs.  SharpDevelop because it has integrated NUnit support along with WiX integration.  Visual C# Express because is has WYSIWYG for WPF.  I would have used Visual Studio as it does everything I need but I can’t afford the license fee right now so.

SharpDevelop will contain the library project which is where the business logic of the software will be.  This is the project with the unit tests.  The windows application project will be in Visual C# Express and it will reference the built DLL file that the library project produces.  Hopefully there will be no surprises with debugging!

Once the desktop application is up and running I’ll look into writing a web based version.  With this intention in mind I’ll be very careful with how I write the core of the software.  I can not have any business logic in the WPF project. One of the lucky benefits of having two different IDEs is that there’s a clear delineation between the ‘display’ and the ‘logic/model’.

I’ll post new articles about my progress.  I’ll write about design decisions and problems I encounter.  I’ve already started programming so there are already things about money, currency and time frequencies that I’d like to share.

My next post will a little boring; it’s a walk through of the spread sheets I use for personal budgeting.  It will give you an understanding about what I’m trying to achieve with the software.

Work pays me monthly and as a result being careful with how much I spend is challenging. It’s actually not that bad. Most of my bills are monthly so I get a sense of how much I can spend each month by subtracting those monthly bills from my monthly wage. I enter that figure into an iPhone app called Balance then throughout the month I enter everything I spend into it. The app shows me how much of that allowance I have left each time I enter an expense.

Recording your expenses is a good thing to do. In fact recording anything you need to do in moderation is a good thing. I’ve lost weight in the past merely because I was recording everything I ate and was trying to keep a daily calorie budget of 2000 calories. When I record expenses the remaining allowance serves as a mental check to make sure I don’t end up spending more money than I was paid. As that number gets smaller the less likely I am to spend money when I don’t have to.

As empowering as that is I was still ending up spending more than my monthly allowance. Towards the beginning of the month my allowance would be relatively large so I wouldn’t feel any remorse about spending money. As the month progressed I’d have less and less of the allowance left. When the remaining allowance was low I’d start to tighten my belt but there’s a point where the remaining allowance is so low that I know I will need to spend more money than I have left until next pay day. This acknowledgement effectively opened the flood gates and made me spend money as haphazardly as I had done at the beginning of the month! On my credit card, of course.

How weird! I guess it’s like trying to diet then succumbing to a doughnut for morning tea then saying to yourself “I’ve already eaten a doughnut today, I may as well have a cheat day”.

When there’s a positive number as my remaining allowance there’s still a chance that I could make it to the end of the month with some money left over for savings. The challenge to save money at the end of the month is still there. If I’m in the red then I’ve already blown it so there doesn’t feel like there’s any challenge left.

It’s like when you see a football game and one side is so far ahead of the other team that there’s a point in the game where everyone knows the other team just can not crawl back and win the game. The losing team knows it and it effects their drive to perform. The difference between the football analogy and my allowance is that when I’m in the red it’s is even more important to spend less!

I didn’t want to fight this seemingly irrational mental situation. I know what I’m like; at times I have to guide myself into doing the right thing. The thing that makes me stop spending so much money is the urge to have a little bit left over at the end of the month. Tracking my allowance by the month was only giving me 12 of these urges every year. That’s not a lot, especially when the urge has a window that closes once the allowance hits the red.

If I could make it so that the ‘urges’ were more frequent then I’d save more money.

If you’ve never been paid monthly then what’s the one thing that scares you the most about the prospect of being paid monthly? For me it was always the ‘Live like a rock star for a week and a pauper for 3′ phenomenon (thanks to my friend Mat for telling me that one). You know that if you’re paid monthly that it’s going to be easy for you to spend most of your cash in the first week then have to be broke until the next pay day.

Obviously being paid weekly is the ideal situation for most people. If you spend all of your pay it’s not that big of a deal. You will have, at most, 7 days until you’re paid again. If you all your monthly pay on day one you’ll have to wait a whole month before money comes in again!

Being paid weekly isn’t a perfect situation either. If you have monthly bills then there will be some weeks where you’ll have to pay more bills and as a result have less budgeted allowance. No matter how often you’re paid there are always bills that are more or less frequent than your pay cycle.

What I do at the moment is add up all the bills and expenses that I know I’ll have to pay between two pay days then subtract that total from my actual pay.  I then divide that number by the number of days until the next pay day.  The result is the total allowance I can spend that pay cycle.  I take that allowance and I allocate it into weekly allowances.

That figure is the amount, on average, that I can spend per day.  I then allocate that allowance into weeks and enter the weekly allowances into the Balance app each week.

It’s like I’m being paid weekly now.  Even better than that, my bills are accounted for each month so I don’t have to worry about paying bills with my weekly allowances.

I’ve started going even further with this idea.  I now have a separate allowance for fuel.  I set aside a fixed amount for fuel each month and whenever I fill up I record that against my fuel allowance.  Right now I end up not using all of my fuel allowance so obviously I’m allocating too much.  What I’ll end up doing is averaging how much I’ve paid for fuel over the course of a few months and come up with a more lean fuel allowance.  For extra points I might even apply an inflation rate so that my fuel allowance increases as the cost of fuel does.

The fuel allowance is working so well that I’m considering carving off more of my weekly allowance and creating other specific allowances.  I’d love to do this for groceries but the amount I spend on groceries changes every week.

The point is that the more constant a recurring expenditure is the easiest it is to make it into its own allowance.  And the more specific allowances I have, the more disposable my weekly allowance is.  Of course the more allowances I add, the smaller my weekly allowance is, but that’s ok.  I would have to spend the money anyway.  What’s left is money that I can spend on what ever I like.

The reason why I’m talking about this is because I’m going to write an application that manages my finances based on the process in the post.  Right now I use an excel spreadsheet to calculate my daily allowance and ultimately the weekly allowance but I want to do more.  I want to be able to specify all the bills I would have throughout the year and with that information figure out how much I should be putting away every pay cycle so that I have money saved up to pay for bills that do not come that often but are still predictable.

My next post will introduce this new project.  That’s enough from me for now