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Counter-question: Does your operating system have all its files directly placed in "/"? Why not? Human nature of thinking needs a context, therefore it makes s

Counter-question: Does your operating system have all its files directly placed in "/"? Why not? Human nature of thinking needs a context, therefore it makes sense to provide folders or categories to get an architectural structure into a huge amount of data that needs to be processed. Additionally, if you need to manage a business account; having multiple accounts to balance the differences and to trace money expenses is common practice. The IRS or German Finanzamt (for example) won't even accept a simple budget sheet that lists all expenses.

fauigerzigerk 6y ago
>Counter-question: Does your operating system have all its files directly placed in "/"? Why not? Because my files are not fungible. I understand keeping business transactions separate from personal transactions. But creating lots of little pots of money for different personal expenditures makes no sense to me at all.
- zhte415 6y ago
  It makes sense to me. I channel 100 per month for the winter heating bill, no need to think about that, it's automatically there. I channel 500 per month for petty cash, don't dive into the rest, it's automatically there. I channel 200 per month for annual insurances, no need to think about that, it's automatically there. Etc. It's a personal direct-debit, like using rules on one's email.
  - fauigerzigerk 6y ago
    I know a lot of people like to do it that way, otherwise these features wouldn't support an entire new category of fintech startups. For me, this is a mental burden and too much busy work. What's more useful to me is forecasting. If the app knows how much money I'm going to need (e.g for rent, bills, groceries, insurance, etc) and it knows how much I will probably receive by then, it can show me whether I'm on the right trajectory and how much headroom I have for discretionary spending. My Monzo app does that (somewhat imperfectly). But if I decide to buy a new computer, I don't want to manually "borrow" money from three different pots and later replenish them manually. I just want to spend the money and have the app tell me the total amount I have to raise in order to stay solvent.
    - 1123581321 6y ago
      In the computer example, someone using the envelope system would decide not to buy the computer if the balance in the appropriate account was short. It’s just a different approach to timing and limiting purchases.
      - saiya-jin 6y ago
        It still sounds a bit weird to me. If I need something, I will buy it unless I don't have cash for it. The concept of buying stuff just because I still have some spare cash in some bucket but I stop once bucket is empty feels so strange to me, some sort of forced self-check on compulsive buyers. If that's the case, I would rather look for solution in the root cause of such behavior rather than symptoms. Maybe the motivation for some ordinary folks (that don't really need structured accounting, then it might be great) is different than mine. Or if I would be on a really tight budget combined with having to juggle tons of various mandatory expenses (household, kids, whatnot).
        pythonaut_16 6y ago
        You don't have to buy something once the bucket is full. The idea is just to have the money allocated so it's ready when you need it. For some things those will be fixed monthly expenses (rent, insurance, mortgage. Others will be variable, like grocery shopping, maybe clothing. And others will be bigger purchases like a computer. It's just another framework or set of tools for budgeting your money out into the future. YNAB (You Need a Budget) has some decent articles on their blog about the concept. Dave Ramsey might be helpful too if you really want to understand the motivation behind this kind of system.
        1123581321 6y ago
        Yes, exactly—-you don’t have the spending problem that some people have, or don’t have the desire to save money to the same extent that some have. Root cause analysis is of course best if successful and can be completed quickly enough.
        lazylizard 6y ago
- fennecfoxen 6y ago
  They are tools for accounting: both as in actually making a count of the matter, and as in actually holding yourself “accountable” for meeting them. It’s easier for some people to not waste money by setting up boundaries. You need detailed enough boundaries that it’s not all a fungible blob. Tada, envelope budgeting.
arethuza 6y ago
Having a separate bank account for each logical account sounds like having a separate drive for each folder. Accounting already provides very high levels of organisation (e.g. Chart of Accounts) that don't map directly to bank accounts and a, greatly simplified, version of this would seem to be adequate for personal finances? Edit: This almost makes me want to write a personal Hyperion Financial Management application...
hrktb 6y ago
That's a good point. We used to partition our disks and assign space budgets to specific partition/mounted directories. It was to me a PITA, and juggling with partitions, redimensionning them because circumstances changed, moving files from one partition to another because it was getting saturated etc. were horrible. Instead of having a tool handling that horror, thinking of disk space as a continuous resource and checking from time to time where that space go and if it needs cleaning is more manageable IMO. I have the same mental model for money, and outside of very specific cases (mortgage accounts, kids account, professional expenses etc.) I don't think it's worth it partitioning at the account levels just for the sake of it.
sorbits 6y ago
> Does your operating system have all its files directly placed in "/"? The various directories all share the same disk storage. I would argue that creating multiple accounts in your bank is akin to creating multiple disk volumes. If one volume runs out of storage, you have to resize it, and requires decreasing the size of another volume. Just like if one bank account runs out of money, you have to move money from another account. Though I am unfamiliar with the products mentioned, so perhaps these are virtual accounts that all draw on the same underlying “physical” account, and thus can have a negative balance without incurring overdraft fees. In which case this would basically be a (simple) accounting app provided by your bank. I could certainly see some value in simplified accounting added to a banking app, if however you are after “proper” view of your finances, a real double entry accounting system should be used, where you would be able to also track assets outside of the bank (like cash on hand), liabilities (debt), etc. Personally though I do see value in having a secondary (bank) account for fixed expenses, but that is only because I am too lazy to do “real” accounting, so having this separate account makes it easy to view a history of all fixed expenses (for next year’s budget).
brmgb 6y ago
> Counter-question: Does your operating system have all its files directly placed in "/"? Why not? That's not a counter question. A file system is an abstraction over the physical layout of your hard drives. An accounting system is an abstraction above your accounts. In the same way, you don't need one hard drive per folder, you don't need a separate bank account per bookkeeping account. My take away from the closure of Simple and some commenters laments is that personnal accounting still suck.

fauigerzigerk 6y ago

>Counter-question: Does your operating system have all its files directly placed in "/"? Why not? Because my files are not fungible. I understand keeping business transactions separate from personal transactions. But creating lots of little pots of money for different personal expenditures makes no sense to me at all.

zhte415 6y ago
It makes sense to me. I channel 100 per month for the winter heating bill, no need to think about that, it's automatically there. I channel 500 per month for petty cash, don't dive into the rest, it's automatically there. I channel 200 per month for annual insurances, no need to think about that, it's automatically there. Etc. It's a personal direct-debit, like using rules on one's email.
- fauigerzigerk 6y ago
  I know a lot of people like to do it that way, otherwise these features wouldn't support an entire new category of fintech startups. For me, this is a mental burden and too much busy work. What's more useful to me is forecasting. If the app knows how much money I'm going to need (e.g for rent, bills, groceries, insurance, etc) and it knows how much I will probably receive by then, it can show me whether I'm on the right trajectory and how much headroom I have for discretionary spending. My Monzo app does that (somewhat imperfectly). But if I decide to buy a new computer, I don't want to manually "borrow" money from three different pots and later replenish them manually. I just want to spend the money and have the app tell me the total amount I have to raise in order to stay solvent.
  - 1123581321 6y ago
    In the computer example, someone using the envelope system would decide not to buy the computer if the balance in the appropriate account was short. It’s just a different approach to timing and limiting purchases.
    - saiya-jin 6y ago
      It still sounds a bit weird to me. If I need something, I will buy it unless I don't have cash for it. The concept of buying stuff just because I still have some spare cash in some bucket but I stop once bucket is empty feels so strange to me, some sort of forced self-check on compulsive buyers. If that's the case, I would rather look for solution in the root cause of such behavior rather than symptoms. Maybe the motivation for some ordinary folks (that don't really need structured accounting, then it might be great) is different than mine. Or if I would be on a really tight budget combined with having to juggle tons of various mandatory expenses (household, kids, whatnot).
      - pythonaut_16 6y ago
        You don't have to buy something once the bucket is full. The idea is just to have the money allocated so it's ready when you need it. For some things those will be fixed monthly expenses (rent, insurance, mortgage. Others will be variable, like grocery shopping, maybe clothing. And others will be bigger purchases like a computer. It's just another framework or set of tools for budgeting your money out into the future. YNAB (You Need a Budget) has some decent articles on their blog about the concept. Dave Ramsey might be helpful too if you really want to understand the motivation behind this kind of system.
      - 1123581321 6y ago
        Yes, exactly—-you don’t have the spending problem that some people have, or don’t have the desire to save money to the same extent that some have. Root cause analysis is of course best if successful and can be completed quickly enough.
      - lazylizard 6y ago
fennecfoxen 6y ago
They are tools for accounting: both as in actually making a count of the matter, and as in actually holding yourself “accountable” for meeting them. It’s easier for some people to not waste money by setting up boundaries. You need detailed enough boundaries that it’s not all a fungible blob. Tada, envelope budgeting.

arethuza 6y ago

Having a separate bank account for each logical account sounds like having a separate drive for each folder. Accounting already provides very high levels of organisation (e.g. Chart of Accounts) that don't map directly to bank accounts and a, greatly simplified, version of this would seem to be adequate for personal finances? Edit: This almost makes me want to write a personal Hyperion Financial Management application...

hrktb 6y ago

That's a good point. We used to partition our disks and assign space budgets to specific partition/mounted directories. It was to me a PITA, and juggling with partitions, redimensionning them because circumstances changed, moving files from one partition to another because it was getting saturated etc. were horrible. Instead of having a tool handling that horror, thinking of disk space as a continuous resource and checking from time to time where that space go and if it needs cleaning is more manageable IMO. I have the same mental model for money, and outside of very specific cases (mortgage accounts, kids account, professional expenses etc.) I don't think it's worth it partitioning at the account levels just for the sake of it.

sorbits 6y ago

> Does your operating system have all its files directly placed in "/"? The various directories all share the same disk storage. I would argue that creating multiple accounts in your bank is akin to creating multiple disk volumes. If one volume runs out of storage, you have to resize it, and requires decreasing the size of another volume. Just like if one bank account runs out of money, you have to move money from another account. Though I am unfamiliar with the products mentioned, so perhaps these are virtual accounts that all draw on the same underlying “physical” account, and thus can have a negative balance without incurring overdraft fees. In which case this would basically be a (simple) accounting app provided by your bank. I could certainly see some value in simplified accounting added to a banking app, if however you are after “proper” view of your finances, a real double entry accounting system should be used, where you would be able to also track assets outside of the bank (like cash on hand), liabilities (debt), etc. Personally though I do see value in having a secondary (bank) account for fixed expenses, but that is only because I am too lazy to do “real” accounting, so having this separate account makes it easy to view a history of all fixed expenses (for next year’s budget).

brmgb 6y ago

> Counter-question: Does your operating system have all its files directly placed in "/"? Why not? That's not a counter question. A file system is an abstraction over the physical layout of your hard drives. An accounting system is an abstraction above your accounts. In the same way, you don't need one hard drive per folder, you don't need a separate bank account per bookkeeping account. My take away from the closure of Simple and some commenters laments is that personnal accounting still suck.