The Infinite Kind Blog

The Infinite Kind Blog

How much does it really cost?

I’m in Brussels today, and I’ve been on the road for 4 weeks.  I’ve visited 7 cities in 3 countries, and it’s been an exciting and wonderful ride. Moneydance support person Jon and I re-connected Wednesday in Rotterdam, and we’re off to Paris on Sunday and Avignon on Monday.  On Monday I arrive in Avignon where I’ll settle down for the month of November.  I’m looking forward to not having to pack every three days!

Being in one place generally means I’ll save money on groceries and eating out, but I’m also more tempted by indulgences like pedicures and gorgeous French clothing.  I don’t want to deny myself all of these indulgences, but seeing prices in currencies which I’m unaccustomed to often makes it more difficult for me to evaluate how expensive something really is.  Luckily for my budget I had a brainstorm last month- what I really want to know is “How long do I have to work to pay for this?”

First, I created a custom currency called “Hour.”  I manually set the exchange rate for this currency as the amount I get paid per hour.  (I don’t actually get paid 18.21 per hour, I’m just using it for demonstration purposes).

{% photo hour-screenshop.jpg %}

Next, I created an asset account called “How Much Does it Cost?” with a base currency of Hour.   When I’m thinking of making a big or especially indulgent purchase I open the account, enter the amount of the purchase with the appropriate currency id (200 Usd, 300 Eur, etc), and hit enter.  Moneydance converts the price of my indulgence into the number of hours I’ll need to work to pay for it.

{% photo how-much-overview.jpg %}

I’ve found this to be a great decision making tool.  I might want that gorgeous pair of boots in Paris, but do I really want to work 10 hours to pay for them?  On the other hand, while the spa day I’m planning in Budapest will cost me about 15 hours of work I consider it a fair trade off.   If it’s a particularly large or long term purchase I might move cash or apply particular hours of my work time to the asset account, gradually “earning” the indulgence.

I’m also a huge fan of the Translate Currencies tool, available under the Tools menu, which lets me see at a glance how much certain amount equals in every currency in my data file.  In this example I see that $100 USD equals 62.90 British Pounds, 11,168 Icelandic Krona, or .1619 shares of Google.  This is particularly useful when I’m moving to a new currency and am trying to adjust my mind-set to the new exchange rate.

{% photo translate-currencies.jpg %}

My past two posts have been about ways I use Moneydance in non-traditional ways to better meet my needs.  If you’ve created a system or structure in Moneydance to track unusual functions like rental property or frequent flyer miles I’d love to hear about it!

The information in this blog posts is only meant to detail my experience and should not be considered financial advice.