BUDGET MANAGEMENT SYSTEM
This invention relates to a management system for assisting the budgeting of finances, particularly personal finances.
A number of approaches to the development of good financial budgeting skills have been used in the past. From the simple method of writing a budget, to more complex systems such as the use of computer programs, each method has required a functional discipline that is often a barrier to people sticking to their set budgets. In the case of a written budget, the person needs to keep track of their finances using figures entered into some sort of journal. This process involves written work. In the case of computer programs, they involve the process of switching on the computer, starting up the program and then data entry. Both the abovementioned budgeting processes also distance the relationship of the data - that being the figures, from the actual tangible money that people are seeking to budget more efficiently. This relational distance presents an impediment to people being able to effectively relate to and therefore maintain their budgetary aims.
According to one aspect of the present invention, there is provided a budget management system comprising a plurality of containers for holding token money as a reserve for meeting predetermined payment objectives, and means defining a store for token money whereby a budget can be determined by moving token money between the store and the respective containers, wherein the respective containers may also receive a credit note to indicate a payment owed to that particular container.
The system may also include one or more variable scales for setting financial objectives.
In one form, the system comprises a board carrying the containers and into which token money and credit notes may be inserted, removed, and moved by the user.
In another form, the system may be in electronic form as presented in a computer program.
Therefore, according to another aspect of the invention, there is provided a computer program stored on a computer readable storage medium, for implementing a budget management system, under which is established a plurality of virtual containers for holding virtual token money as a reserve for meeting predetermined payment objectives, and virtual means defining a virtual store for virtual token money whereby a budget can be determined by moving virtual token money between the virtual store and the respective virtual containers, wherein the program also provides virtual credit notes for movement into the respective virtual containers to indicate a payment owed to that particular virtual container.
More particularly, a budget management system in accordance with one preferred embodiment is in the form of a board that can be hung on a wall. The board has fixed to it, a number of containers for holding token money used as a reserve of money to represent a person's finances, and a container for holding credit notes for use when a person needs to borrow from one financial objective or requirement, in order to pay another financial requirement. The board also has fixed to it, a number of containers for holding token money or credit notes, which represent the person's actual money that is held within one or more bank accounts. The board also contains one, two, or more variable scales for one, two, or more financial objectives to be achieved, for example savings objectives. The board also comes with a large supply of token money, a large number of labels for affixing to the containers, and an instructions booklet.
In one preferred form, the containers and variable scales have magnetic backs that attach to a board of a magnetically attachable material. The magnets enable the movement of the containers to allow the person to organise and arrange the containers and scales in any manner they wish, as well as allowing the person to vary the number of containers and/or scales they have on the board. Alternatively the board may carry printed indicia to provide on the board pre-allocated zones for placement of the containers and scales. In this latter case
releasable attachment to the board can be achieved by a two-part coupling of the type sold under the trademark "Nelcro" wherein one part of the coupling is attached to the backs of the containers and the second part of the coupling is attached to the board at the predetermined locations; in this case, although the scales may be similarly attached, they may alternatively be printed on the board.
The containers may be made of any suitable material, such as cardboard, or moulded plastic. The board may be made of any suitable material, such as cardboard, cork, plastic or metal. The token money may be made of any suitable material, such as paper or plastic. The variable scales may be made of any suitable material, such as paper or plastic or, as discussed above, may be printed on the actual board itself. The labels may be made of any suitable material, such as paper with adhesive backing or may be clipped onto the containers using a clip device such as a paper clip, or may be slid into a holder that has been incorporated into each container. There is associated with each scale an indicator such as a pointer or flag movable along the scale to provide a readily visible indication of the scale of achievement of the associated objectives.
In another preferred embodiment of the invention, the whole of the budget management system is replicated in a computer program. The whole of the board would appear complete on the screen and token money that represents a person's actual money, would be moved around the board in the same fashion as is described further in this application.
A preferred embodiment of the invention will now be further described, by way of example only, with reference to the accompanying drawing, in which:
Figure 1 is a view of a board set-up to provide a budget management system in accordance with the preferred embodiment.
Referring to this drawing it can be seen that the budget management system according to the preferred embodiment of this invention, comprises a board 1 which has a number of
containers 2 attached to it. Each container 2 above a line 3 has attached labels 4. Also on the board 1 above the line 3 are one or more variable scales 5. In this example of the budget management system, there are two scales 5. Below the line 3 are a number of containers 6. Two containers 7 at the top of the scales 5 are used for savings goals associated with the scales 5. A container 8 at the base of the scales 5 is used for banking receipts or pending transactions that need to be entered onto the board and/or as a deposit for token money that has been spent on credit cards but has yet to be paid to the bank.
Setting the budget management system up for operation:
Following the instruction book supplied, token money of varied denominations and credit notes (as supplied with the budget management system), are deposited in the containers 6 below the line 3.
A person would then calculate their finances for a period of time into the future that suits their needs. For the sake of example, a period of twelve months shall be used. The person would sum, as an average, their expected weekly earning for the twelve month period. The person would write down their expected bills and the date upon which the bills are expected to fall. The person would estimate their weekly expenditure on such regular weekly expense as food, fuel or entertainment. The person would also establish their chosen savings goals for the period.
The total of bills, weekly expenditures and goals combined for the twelve month period must equal the total of the person's twelve month expected earnings.
By dividing the bill or goal total by the number of weeks until the bill is due or the goal is wished to be met, the person arrives at a weekly figure that they must allocate from their expected earnings in order to meet the bill or goal. The person will also have a list of weekly expenditures. If, at this stage, the total of bills, weekly expenditures and goals for the period exceeds the total expected earnings for the period, the weekly expenditures or goals
must be reduced in their size until the two totals are equal.
Once the person has arrived at the weekly figures, they write on the labels provided, the bill type, weekly expenditure or goal by name and the weekly figure required to meet that objective. The labels 4 are then attached to the containers 2. For important savings goals, the motivation of a variable scale 5 is provided in which case the particular label pertaining to that goal is attached to one of the containers 7. For more than one important savings goal, further scales 5 may be added as can be reasonably fitted onto the board 1. At this stage the budget management system is ready for operation.
Operating the budget management system on a weekly and daily basis:
The budget management system may now be hung on a wall or the rear of a wardrobe door, for the sake of privacy.
Every weekly pay day, the person withdraws from the containers 6, below the line 3, an amount of token money equal to that of their weekly pay. The person then distributes the token money to the containers 2 and 7 as per the weekly amounts listed on each label of each container. Their actual money should be placed in a bank account. Over the following weeks and months, the amounts in each container 2 and 7 will increase, except for containers pertaining to weekly expenses. When a bill arrives and is paid, the person goes to the relevant container and moves from that container the amount of token money equal to the bill just paid, to the containers 6 below the line 3. Thus, at any one moment in time, if a person were to total all the token money in all the containers 2 and 7 above the line 3, that total should be equal to the total real money they have in their bank account.
Whenever money is withdrawn from the bank account, the transaction should be replicated on the budget management system and an equal amount of token money must be removed from above the line 3, and returned to one of the containers 6, below the line 3. Container 8 is provided for the storage of bank statements, in the form issued by night/day automatic tellers or for notes such as transactions that need to be completed on the board 1.
Whenever money is spent on a credit card, the amount in token money is removed from the appropriate container 2 or 7, and placed in the container 8. When the credit card bill is paid, this money is removed and returned to one of the containers 6, below the line 3.
Operation continues in the abovementioned fashion until the person either completes the set period (twelve months in the example used above) or, until the person wishes to reallocate or re-organise their financial management.
Credit notes are provided that are also housed within the containers 6 below the line 3. The credit notes are used in the instance where unexpected expense are incurred. Money may be taken from the containers 2 or 7 to pay for the unexpected bills and the person may write a credit note to the amount taken, and store the credit note in the relevant container; alternatively, a credit note for this purpose may be written on a slip of paper provided by the user and then stored in the relevant container. Should future bills or weekly expenditure be less than expected, the credit notes may be reduced until finally, the saving goal is back on track - at which point the credit note is returned to the containers 6 below the line 3, or alternatively the credit note can be removed and destroyed.
For motivational purposes, the amount of money within a container 7 associated with a scale 5 and hence with defined savings objective is indicated on the scale by applying an indicator at a proportional distance along the scale; for example if the objective is to save $1000, actual savings of $200 will be associated with application of the indicator at one-fifth of the length of the scale. Although the indicator can consist of a movable flag, pointer or other marker, indication could be provided by colouring the scale using an erasable ink. The use of the scale enables ready visual indication of the extent to which the savings objective is being achieved and may motivate the user into fully achieving that objective.
Although the described embodiment employs physical components such as the described board, containers, scales, token money, and credit notes, it is possible to implement the system by way of a computer program which in use implements the system on a
computer. Thus, the program may include code which establishes the various components as virtual components resident in computer readable memory. The code may then establish user controllable routines for effecting the various described method steps. Control may be by conventional means, for example from a computer keyboard or a mouse or other pointing device.
Throughout this specification and claims which follow, unless the context requires otherwise, the word "comprise", and variations such as "comprises" or "comprising", will be understood to imply the inclusion of a stated integer or group of integers or steps but not the exclusion of any other integer or group of integers.
The embodiment has been described by way of example only and modifications are possible within the scope of the invention.