Why budgeting apps show wrong historical totals in multi-currency finance
A developer building a multi-currency personal finance app has identified a widespread flaw in how such apps handle historical transactions. The problem occurs when apps apply today's live exchange rate to past transactions, effectively rewriting financial history and producing inaccurate totals. The correct approach is to snapshot the exchange rate at the time of each transaction, freezing it as a historical fact rather than recalculating it dynamically. For current balances, live rates remain appropriate, but past records should rely on the rate that was in effect on the transaction's value date. The developer recommends storing the original currency, amount, date, and historical rate together to ensure accurate reporting and flexibility if a user later changes their base currency.
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