How we plan to use MoneyWell

The question is: Do you see any gotchas in the approach described below?

We've just started working with MoneyWell. I'd like to describe our situation and how we plan to use MoneyWell.

My wife and I are retired and live in Mexico. We are living from our savings.

We do not plan to manage our bank accounts with MoneyWell. In MoneyWell we will use a single virtual account called "Money", or something equivalent. We will manage our real bank and investment accounts using the website of each institution.

We have worked with a financial planner to determine how much money we can withdraw from savings each year. We plan to "deposit" that full amount as Income in our Money account the first day of each budget year. Subsequent allocations to our expense buckets will flow from that initial deposit for the rest of the year.

Because Mexico is a cash economy, and because we do not want to (and probably would not) write down every trip to the market, etc., we are not going to track small cash expenditures. Instead, our Spending Plan will include a large monthly amount in the Cash Expenditure expense bucket. Every time we make an ATM withdrawal, we will count it as an expense against that bucket.

Other than our Cash Expenditure bucket, we are going to create expense buckets for purchases that we pay directly from our bank accounts, e.g., our phone bill, and very large outlays, e.g., our annual car insurance, travel. We'll also have a bucket called "Unexpected" for big surprises such as major car repairs. We will not include any Planned amount for this bucket, but will build enough buffer into our Cash Expenditure bucket to cover (we hope) most Unexpected expenses.

We'll also include a monthly allowance for each of us in the spending plan. We think this is important, because it takes discretionary spending on expensive items out of the household spending plan. If I want a new lens for my camera, I know that I have to save from my allowance until I can afford it.

I realize that what we plan to do is not by the book, especially not tracking small cash purchases. However, we have been doing something similar with Quicken on a PC for a while now, and it has worked well.

I welcome your comments.

Jeff