Money Pattern in Java: Encapsulating Monetary Values with Currency Consistency

Also known as

• Monetary Value Object

Intent of Money Design Pattern

The Money design pattern provides a robust way to encapsulate monetary values and their associated currencies. It ensures precise calculations, currency consistency, and maintainability of financial logic in Java applications.

Detailed Explanation of Money Pattern with Real-World Examples

Real-world example

Imagine an e-commerce platform where customers shop in their local currencies. The platform needs to calculate order totals, taxes, and discounts accurately while handling multiple currencies seamlessly.

In this example:

• Each monetary value (like a product price or tax amount) is encapsulated in a Money object.
• The Money class ensures that only values in the same currency are combined and supports safe currency conversion for global operations.

In plain words

The Money pattern encapsulates both an amount and its currency, ensuring financial operations are precise, consistent, and maintainable.

Wikipedia says

"The Money design pattern encapsulates a monetary value and its currency, allowing for safe arithmetic operations and conversions while preserving accuracy and consistency in financial calculations."

Programmatic Example of Money Pattern in Java

Money Class

/**
 * Represents a monetary value with an associated currency.
 * Provides operations for basic arithmetic (addition, subtraction, multiplication),
 * as well as currency conversion while ensuring proper rounding.
 */
@Getter
public class Money {
  private @Getter double amount;
  private @Getter String currency;

  public Money(double amnt, String curr) {
    this.amount = amnt;
    this.currency = curr;
  }

  private double roundToTwoDecimals(double value) {
    return Math.round(value * 100.0) / 100.0;
  }

  public void addMoney(Money moneyToBeAdded) throws CannotAddTwoCurrienciesException {
    if (!moneyToBeAdded.getCurrency().equals(this.currency)) {
      throw new CannotAddTwoCurrienciesException("You are trying to add two different currencies");
    }
    this.amount = roundToTwoDecimals(this.amount + moneyToBeAdded.getAmount());
  }

  public void subtractMoney(Money moneyToBeSubtracted) throws CannotSubtractException {
    if (!moneyToBeSubtracted.getCurrency().equals(this.currency)) {
      throw new CannotSubtractException("You are trying to subtract two different currencies");
    } else if (moneyToBeSubtracted.getAmount() > this.amount) {
      throw new CannotSubtractException("The amount you are trying to subtract is larger than the amount you have");
    }
    this.amount = roundToTwoDecimals(this.amount - moneyToBeSubtracted.getAmount());
  }

  public void multiply(int factor) {
    if (factor < 0) {
      throw new IllegalArgumentException("Factor must be non-negative");
    }
    this.amount = roundToTwoDecimals(this.amount * factor);
  }

  public void exchangeCurrency(String currencyToChangeTo, double exchangeRate) {
    if (exchangeRate < 0) {
      throw new IllegalArgumentException("Exchange rate must be non-negative");
    }
    this.amount = roundToTwoDecimals(this.amount * exchangeRate);
    this.currency = currencyToChangeTo;
  }
}

## When to Use the Money Pattern

The Money pattern should be used in scenarios where:

1. **Currency-safe arithmetic operations**  
   To ensure that arithmetic operations like addition, subtraction, and multiplication are performed only between amounts in the same currency, preventing inconsistencies or errors in calculations.

2. **Accurate rounding for financial calculations**  
   Precise rounding to two decimal places is critical to maintain accuracy and consistency in financial systems.

3. **Consistent currency conversion**  
   When handling international transactions or displaying monetary values in different currencies, the Money pattern facilitates easy and reliable conversion using exchange rates.

4. **Encapsulation of monetary logic**  
   By encapsulating all monetary operations within a dedicated class, the Money pattern improves maintainability and reduces the likelihood of errors.

5. **Preventing errors in financial operations**  
   Strict validation ensures that operations like subtraction or multiplication are only performed when conditions are met, safeguarding against misuse or logical errors.

6. **Handling diverse scenarios in financial systems**  
   Useful in complex systems like e-commerce, banking, and payroll applications where precise and consistent monetary value handling is crucial.

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## Benefits and Trade-offs of Money Pattern

### Benefits
1. **Precision and Accuracy**  
   The Money pattern ensures precise handling of monetary values, reducing the risk of rounding errors.

2. **Encapsulation of Business Logic**  
   By encapsulating monetary operations, the pattern enhances maintainability and reduces redundancy in financial systems.

3. **Currency Safety**  
   It ensures operations are performed only between amounts of the same currency, avoiding logical errors.

4. **Improved Readability**  
   By abstracting monetary logic into a dedicated class, the code becomes easier to read and maintain.

5. **Ease of Extension**  
   Adding new operations, handling different currencies, or incorporating additional business rules is straightforward.

### Trade-offs
1. **Increased Complexity**  
   Introducing a dedicated `Money` class can add some overhead, especially for small or simple projects.

2. **Potential for Misuse**  
   Without proper validation and handling, incorrect usage of the Money pattern may introduce subtle bugs.

3. **Performance Overhead**  
   Precision and encapsulation might slightly affect performance in systems with extremely high transaction volumes.

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## Related Design Patterns

1. **Value Object**  
   Money is a classic example of the Value Object pattern, where objects are immutable and define equality based on their value.
   Link:https://martinfowler.com/bliki/ValueObject.html
2. **Factory Method**  
   Factories can be employed to handle creation logic, such as applying default exchange rates or rounding rules.
    Link:https://www.geeksforgeeks.org/factory-method-for-designing-pattern/
---

## References and Credits

- [Patterns of Enterprise Application Architecture](https://martinfowler.com/eaaCatalog/money.html) by Martin Fowler  
- [Design Patterns: Elements of Reusable Object-Oriented Software](https://amzn.to/3w0pvKI)