Interview with Kevin Hoctor the Developer of MoneyWell

As part of a review of No Thirst Software's MoneyWell, I conducted an interview with its developer Kevin Hoctor to get more information about his very useful program.

 AppleMatters: Let's talk about money management first. Do you have any idea of what percentage of people in this country maintain some sort of formal money management system? If that percentage is fairly low, why do you think that's the case?

Kevin Hoctor: I don't have any solid numbers on the percentage of people using formal budgeting tools, but I'm quite sure it's low. There are a few reasons for this. Many people think budgeting calls for sacrifice and difficult choices. Add to that the pain of learning and using a computer program and it's easier for many just to ignore the whole process.

It's also hard to stick to a budget if you dedicate hours managing your spending on a computer. Given the choice of surfing the web and chatting on Facebook or staring at financial reports and updating your budget, which would you choose? Fun and easy almost always wins.

AppleMatters: QuickBooks and Quicken are two popular financial management programs. What are some of the significant differences between MoneyWell and the Quicken programs?

Kevin Hoctor: Quickbooks is primarily a business finance application, so it's not really a direct competitor to MoneyWell. The primary difference betweenMoneyWell and Quicken is that MoneyWell lets you manage your finances proactively.

With Quicken, you spend first and then run reports after to see if you have overspent. By that time, it's too late for most people to fix their mistakes so they just try to do better next time without really knowing what "better" means. Quicken can also be overwhelming to many users because of the layers of windows, toolbars, menus, and options. It's challenging to me at times and I'm a software developer.

MoneyWell on the other hand was designed to be very straightforward and even a bit fun. MoneyWell uses the "envelope" budgeting system, which allows you to see what you have to spend before you spend it. You don't need to run a report or click through five layers of a pie chart just to see that you have $200 left to spend on groceries or $50 for entertainment. To keep the process even easier, MoneyWell fits its tools into a single window interface-a less is more philosophy.

Kevin Hoctor: MoneyWell is a fairly intuitive program, what challenges as a developer did you run into creating MoneyWell? Did/does working within a Leopard platform make it easier or harder to create MoneyWell? How so?

The hardest part of creating and improving MoneyWell has been sticking to the original concept of a single window design. It's easy to add features to software if you don't care how confusing or cluttered the interface becomes but adding functionality without adding complexity can be very challenging.

The current version of MoneyWell runs on OS X Tiger but the upcoming 1.5 release requires Leopard. Both Leopard, and the upcoming Snow Leopard, operating system releases from Apple add fantastic technologies that have allowed me to use more Apple frameworks, reduce my custom code base, and improve the speed and stability of MoneyWell in the process.

AppleMatters: MoneyWell includes what's called a Spending Plan feature used for creating budgets for individual categories of spending. For those new to personal financial management and using MoneyWell or a similar program, do you have any general recommendations for maintaining a personal budget?

Kevin Hoctor: My biggest recommendation is to move to a cash-only budget. This means disposing of credit cards and paying off unsecured debt to free yourself from the high cost of credit spending. My wife and I struggled with debt for years and we knew we had to break the cycle of using credit. Personally, I'm horrible at sticking to a budget. After years of using Quicken and failing to control my own spending, I went searching for a better tool. When my search failed, I wrote MoneyWell.

Using proactive money management, I found it was possible for even me to live on a cash basis, I just had to make better choices. I created a spending plan that was pessimistic about my income and built into my plan money for savings and debt repayment. Then I followed the cash flow process in MoneyWell, which asks you to fill your buckets based on the income you make and spend only what money is currently in your buckets. With the leftover money in my expense buckets, I started building an emergency fund in my savings and continued to build it so I had several thousand dollars to fall back on for emergencies instead of reaching for a credit card. At the same time, I made sure that debt repayment was a top priority in my spending plan.

It sounds too simple, but the solution to financial freedom is to either earn more or spend less and never accept debt as an option.

AppleMatters: How easy is it to use MoneyWell? Are there any particular questions or challenges that users of the program write to you about on a regular basis?

Kevin Hoctor: Compared to most other budgeting programs, MoneyWell is very easy because the design is obvious: the money you have to spend is in the lefthand column, your current transactions and a cash flow history graph are in the middle, and transaction details are on the right. Customers coming fromQuicken or Microsoft Money tend to have a harder time than new customers because they are still trying to use the old method of tracking too much useless detail. Once they get the concept of tracking only what affects your cash flow, light bulbs go on and they become some of our best customers.

The most common challenges I hear are related to loss of income or variable income. It's tough to manage a budget when you have to dip into savings-because you're out of work or your paycheck isn't consistent-but it is possible. I tell them to stick to the basic rules and reduce expenses as much as possible so they can avoid debt. The more your income fluctuates, the more important it becomes to set a pessimistic spending plan so you can weather the low tides. Envelope budgeting is incredibly powerful when cash flow is tight.

AppleMatters: Do you plan to create some sort of iPhone application to sync with the desktop version of MoneyWell?

Kevin Hoctor: Yes. MoneyWell for iPhone is currently under development alongside of MoneyWell 1.5 and I'm hoping to have both in beta in the next couple of months. We plan to offer several syncing options with MobileMe being the first that's activated. Our customer base has made it clear that they love MoneyWellbut want the iPhone version and more additions to the desktop. With the innovations we have planned for our future generations of MoneyWell, we hope to keep them happy for a long time to come.

Thank you for taking the time for this interview. Feel free to follow up with more questions or clarifications.